| Airbus was incorporated in 2001 under | | | | A380. In the wake of the announcement, |
| French law as a simplified joint stock | | | | the value of associated stock plunged by |
| company or S.A.S. (Société par Actions | | | | up to a quarter in a matter of days, |
| Simplifiée). Airbus was formerly known | | | | although it soon recovered somewhat. |
| as Airbus Industrie. | | | | Allegations of insider trading on the |
| Airbus was jointly held by EADS (80%) | | | | part of Noël Forgeard, CEO of EADS, its |
| and BAE Systems (20%), Europe's two | | | | majority corporate parent, promptly |
| largest defence contractors. BAE Systems | | | | followed. The loss of associated value |
| announced its intention to sell its 20% | | | | caused great concern on the part of BAE, |
| share of Airbus in April 2006 and | | | | The Independent describing a "furious |
| exercised its "put option" in June 2006 | | | | row" between BAE and EADS, with BAE |
| to force EADS to buy the share. The put | | | | believing the announcement was designed |
| option appointed investment bank | | | | to depress the value of its share. A |
| Rothschild to establish an independent | | | | French shareholder group filed a class |
| valuation. Rothschild's valuation, | | | | action lawsuit against EADS in a Dutch |
| reported in 2006, was L1.9 billion | | | | court for failing to inform investors of |
| (€2.75 billion), well below the | | | | the financial implications of the A380 |
| expecations of BAE and EADS. Unhappy | | | | delays while airlines to which |
| with the valuation, BAE appointed | | | | deliveries were promised are expected to |
| independent auditors to investigate the | | | | demand compensation. As a result, EADS |
| value of its 20% share. On 6 September | | | | chief Noël Forgeard and Airbus CEO |
| 2006 the BAE board announced it would | | | | Gustav Humbert announced their |
| recommend to shareholders to sell its | | | | resignations on 2 July 2006. Forgeard's |
| share for €2.75bn (L1.87bn or | | | | severance package is expected to include |
| $3.53bn). | | | | three years' of salary plus the 2005 |
| Airbus employs around 57,000 people at | | | | bonus; a total of at least €6 million, |
| sixteen sites in four European | | | | possibly topping €7 million. |
| countries: Germany, France, the United | | | | On July 2nd 2006 Rothschild valued BAE's |
| Kingdom, and Spain. Final assembly | | | | stake at L1.9 billion (€2.75 billion); |
| production occurs at Toulouse (France) | | | | well below the expectation of BAE, |
| and Hamburg (Germany). Airbus also has | | | | analysts and even EADS. On 5 July 2006 |
| three subsidiaries in the USA, Japan and | | | | BAE appointed independent auditors to |
| China. | | | | study why the value of its share of |
| Airbus Industrie was formally set up in | | | | Airbus had fallen from the original |
| 1970 following an agreement between | | | | estimates to the Rothschild valuation. |
| Sud-Aviation (France) and Deutsche | | | | The pushed back any potential sale until |
| Airbus—itself a German aerospace | | | | September at the earliest. [11] On 6 |
| consortium consisting of Bölkow, | | | | September 2006 BAE agreed to sell its |
| Dornier, Flugzeug-Union Süd, HFB, | | | | stake in Airbus to EADS for L1.87 |
| Messerschmitt, TG Siebelwerke, and VFW. | | | | billion (€2.75 billion, $3.53 |
| The grouping was joined by CASA of Spain | | | | billion), pending BAE shareholder |
| in 1971. Each company would deliver its | | | | approval. On 4 October shareholders |
| sections as fully equipped, ready to fly | | | | voted in favour of the sale. |
| items. The name "Airbus" was taken from | | | | On the 9th October 2006 Christian |
| a non-proprietary term used by the | | | | Streiff, Humbert's successor, resigned |
| airline industry in the 1960s to refer | | | | due to differences with parent company |
| to a commercial aircraft of a certain | | | | EADS over the amount of independence he |
| size and range, for this term was | | | | would be granted in implementing his |
| acceptable to the French linguistically. | | | | reorganization plan for Airbus. He will |
| In 1972 the A300 made its maiden flight | | | | be succeeded by EADS co-CEO Louis |
| and the first production model, the | | | | Gallois. This brings Airbus under more |
| A300B2 entered service in 1974. | | | | direct control of its parent company. |
| Initially the success of the consortium | | | | Civilian products |
| was poor but by 1979 there were 81 | | | | The Airbus product line started with the |
| aircraft in service. It was the launch | | | | A300, the world's first twin-aisle, |
| of the A320 in 1981 that guaranteed | | | | twin-engined aircraft. A shorter, |
| Airbus as a major player in the aircraft | | | | re-winged, re-engined variant of the |
| market - the aircraft had over 400 | | | | A300 is known as the A310. Building on |
| orders before it first flew, compared to | | | | its success, Airbus launched the A320 |
| 15 for the A300 in 1972. | | | | with its innovative fly-by-wire control |
| It was a fairly loose alliance but that | | | | system. The A320 has been, and continues |
| changed shortly after major defence | | | | to be, a great commercial success. The |
| mergers in 2000. DaimlerChrysler | | | | A318 and A319 are shorter derivatives |
| Aerospace (successor to Deutsche | | | | with some of the latter under |
| Airbus), Aérospatiale (successor to | | | | construction for the corporate biz-jet |
| Sud-Aviation) and CASA merged to form | | | | market (Airbus Corporate Jet). A |
| EADS. In 2001 BAE Systems (formerly | | | | stretched version is known as the A321 |
| British Aerospace) and EADS formed the | | | | and is proving competitive with later |
| Airbus Integrated Company to coincide | | | | models of the Boeing 737. |
| with the development of the new Airbus | | | | The longer range products, the twin-jet |
| A380 which will seat 555 passengers and | | | | A330 and the four-engine A340, have |
| be the world's largest commercial | | | | efficient wings, enhanced by winglets. |
| passenger jet when it enters service in | | | | The Airbus A340-500 has an operating |
| late 2007 according to the revised | | | | range of 16 700 kilometres (9000 |
| schedule announced in October of 2006. | | | | nautical miles), the second longest |
| BAE sale and A380 controversy | | | | range of any commercial jet after the |
| On April 6th 2006 BBC News reported that | | | | Boeing 777-200LR (range of 17 446 km or |
| BAE Systems was selling its share, then | | | | 9420 nautical miles). The company is |
| "conservatively valued" at €3.5 | | | | particularly proud of its use of |
| billion EUR ($4.17 bn USD). The move | | | | fly-by-wire technologies and the common |
| was seen by many analysts as a move to | | | | cockpit and systems in use throughout |
| make partnerships with U.S. firms more | | | | the aircraft family, which make it much |
| feasible, in both financial and | | | | easier to train crew. |
| political terms. BAE originally sought | | | | Airbus is studying a replacement for the |
| to agree a price with EADS through an | | | | A320 series, tentatively dubbed NSR, for |
| informal process. However due to the | | | | "New Short-Range aircraft." |
| slow pace of negotiations and | | | | In March 2006 Airbus announced the |
| disagreements over price, BAE exercised | | | | closing of the A300/A310 production |
| its put option which saw investment bank | | | | line, ending over 30 years of |
| Rothschild appointed to give an | | | | production. The last delivery will take |
| independent valuation. | | | | place in 2nd quarter 2007. |
| In June, 2006, Airbus became embroiled | | | | Until its retirement in 2003, Airbus |
| in a significant international | | | | supplied replacement parts and service |
| controversy over its announcement of a | | | | for the Concorde. |
| further delay in the delivery of its | | | | |