The partners in Airbus Industrie jacked up the competitive pressure on Boeing by turning heir consortium into a corporation and officially starting to sell the A380 superjumbo jet. The announcement by the consortium companies came only hours before three of them launched the initial public offering of their merged company, the European Aeronautic Defence & Space Company (EADS), through which they planned to raise 3.5 billion euros.
Airbus was run by four companies-one French, one Spanish, one German, and one British. The four built planes as allied but independent companies and marketed them through their Airbus Industrie joint venture. Under the new agreement, they combined all their individual Airbus production assets and the joint venture (EADS) into a new French-registered company, the working name of which is Airbus Integrated Company (AIC).
The partners had said that creating the AIC was a prerequisite to launching the 550-seat A380. Developing the jet, which would be the world’s largest passenger plane, will cost $12 billion, and the partners had said that the complex consortium structure was too inefficient to support such a large project.
The A380 has already drawn interest and orders from at least eight airlines, among them Quantas, Singapore Airlines, and Air France. The superjumbo jet will compete with Boeing’s 400+-seat 747 jumbo jets, a major source of profit for the Seattle company because it had a monopoly on building the biggest jets. The consolidation of Aibus should make it more nimble and profitable as well as help it compete against Boeing. The A380 project should break even within 10 years on sales of 250 planes. Airbus already has booked orders for half that number. Are they sleepless in Seattle?
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