Paris Air Show

Enders stirs up subsidy row again

 - June 16, 2009, 11:49 AM

Calling Boeing’s 787 “probably the most subsidized airplane ever,” Airbus CEO Thomas Enders nevertheless feels comfortable with the €11 billion ($15 billion) that, on his own admission, European governments have committed to launching the A350XWB.

“We want to level the playing field; that’s the purpose here,” said Enders in response to questions about the level of government support available to Airbus. “And, in addition to that, the rules that we are still following…are from 1992. By the way, it might be interesting to see that our competitor immediately raised its hand in protesting last night; I didn’t expect otherwise. It’s probably a bit of hypocrisy, if I dare say so.”

Enders said that Airbus has repaid 40 percent more money than it has actually received since the 1992 agreement that allows for development aid amounting to 33 percent of a project’s total cost.

Airbus COO customers John Leahy was no more conciliatory at yesterday’s press conference. He said that Boeing’s studies into a new wing for the 777 speaks well of the A350XWB’s potential to overtake the 787 commercially.

“I think this is further confirmation of what we have in the A350XWB,” said Leahy. “They clearly see a need to do something.”  

Overall, Enders struck a positive tone yesterday, essentially echoing Boeing Commercial Airplanes CEO Scott Carson’s earlier predictions for an economic rebound by the end of this year or by at least the middle of next.

Enders also stressed the importance of the so-called “green” challenge and the fact that Airbus’s “eco-efficient” approach “is no less important this year than it was last year…There will be a replacement need for 5,000 to 6,000 aging aircraft [over the next 20 years], raising the stakes yet higher for the need for the so-called eco-efficiency Enders espouses.

Meanwhile, demand from emerging markets–particularly from low-cost carriers–has made Airbus’s challenge in overcoming the ravages of the global recession less onerous than perceptions might otherwise indicate. “It’s not all gloom and doom all over the world and with every airline,” said Enders.

The Airbus CEO also expressed confidence in his projections for deliveries this year, which calls for some 480 airplanes–the same number it shipped last year–including 14 A380s. “I remember the situation a year ago when people questioned how realistic was 12?” he said. “There’s absolutely no reason to believe that we can’t deliver on our target.”

Turning to the vital issue of financing availability, Enders said European export credit agencies would back at least 40 percent of this year’s deliveries–a figure he said he believes more or less reflects Boeing’s reliance on the U.S. ExIm bank. Enders estimated that Airbus would have to use “not more than ?1 billion [$1.4 billion] of its own capital to help finance deliveries this year.”