S.A.S. better known as simply Airbus, based in Toulouse,
France, is the world's largest commercial aircraft manufacturer.
It was incorporated in 2001 under French law as a simplified joint stock
company or "S.A.S." (Société par Actions Simplifiée). Airbus was formerly known
as Airbus Industrie and is commonly just named Airbus.
Airbus is jointly held by EADS (80%) and BAE Systems (20%), Europe's two
largest military suppliers and manufacturers. As of 2005, its CEO is Gustav
Humbert. Airbus employs around 52,000 people in several European countries.
Final assembly is carried out in Toulouse, France and Hamburg, Germany, although
construction occurs at a number of plants across Europe.The main competitor of Airbus is Boeing, with which it fights an intense
commercial and political war.
Airbus Industrie began as a consortium of European aviation firms to
compete with American companies such as Boeing and McDonnell Douglas. In the
1960s European aircraft manufacturers competed with each other as much as the
American giants. In the mid-1960s tentative negotiations commenced regarding a
European collaborative approach began.
In September 1967 the British, French and German governments signed a
Memorandum of Understanding (MoU) to start development of the 300 seat Airbus
A300. This was the second major joint aircraft programme in Europe, following
the Concorde, for which no ongoing consortium was devised. An earlier
announcement had been made in July 1967 but had been complicated by the British
Aircraft Corporation (BAC). The British government refused to back its proposed
competitor, a development of the BAC 1-11 and instead supported the Airbus
In the months following this agreement both the French and British
governments expressed doubts about the aircraft. Another problem was the
requirement for a new engine (to be developed by Rolls-Royce, the RB207). In
December 1968 the French and British partner companies, Sud Aviation and Hawker
Siddeley proposed a revised configuration, the 250 seat Airbus A250. Renamed the
A300B the aircraft would not require new engines, reducing development costs.
In 1969 the British government shocked its partners by withdrawing from the
project. Given the participation by Hawker Siddeley up to that point, France and
Germany were reluctant to take over their wing design. Thus the British company
was allowed to continue as a major subcontractor.
Airbus Industrie was formally set up in 1970 following an agreement between
Aerospatiale (France) and Deutsche Aerospace (Germany) (joined by CASA of Spain
in 1971). Each company would deliver its sections as fully equipped, ready to
fly items. The name "Airbus" was taken from a non-proprietary term used by the
airline industry in the 1960s to refer to a commercial aircraft of a certain
size and range, for this term was acceptable to the French linguistically.
In 1972 the A300 made its maiden flight and the first production model, the
A300B2 entered service in 1974. Initially the success of the consortium was poor
but by 1979 there were 81 aircraft in service. It was the launch of the A320 in
1981 that guaranteed Airbus as a major player in the aircraft market - the
aircraft had over 400 orders before it first flew, compared to 15 for the A300
It was a fairly loose alliance but that changed in 2000 when DASA,
Aerospatiale and CASA merged to form EADS and in 2001 when BAE and EADS formed
the Airbus Integrated Company to coincide with the development of the new Airbus
A380, which will seat 555 passengers and be the world's largest commercial
passenger jet when it enters service in 2006.
On April 27, 2005, the A380 successfully completed its maiden flight in
Toulouse, France. The flight lasted almost four hours, the plane taking off from
Toulouse Blagnac Airport at 08:29 UTC (10:29 a.m. local time), going west
towards the Atlantic Ocean, turning around above the ocean, flying above the
Pyrenees mountains, and landing at Toulouse Blagnac Airport at 12:23 UTC (2:23
p.m. local time). The crew was made up of French test pilots Jacques Rosay
(captain for the take-off and the initial part of the test flight) and Claude
Lelaie (captain for the second part of the test flight including the landing),
as well as three flight test engineers (Spanish, French, and German), and one
French test flight engineer. With the recent Franco-German controversy over the
leadership of EADS still fresh in mind, Airbus issued a statement to make it
clear that the crew had been chosen not based on nationality, but based on
competence. Test flights are due to continue until mid-2006.
The Airbus product line started with the A300, the world's first twin-aisle,
twin-engined aircraft. A shorter variant of the A300 is known as the A310.
Building on its success, Airbus launched the A320 with its innovative
fly-by-wire control system. The A320 was a great commercial success. The A318
and A319 are shorter derivatives with some of the latter under construction for
the corporate biz-jet market (Airbus Corporate Jet). A stretched version
is known as the A321 and is proving competitive with later models of the Boeing
The longer range products, the twin-jet A330 and the four-jet A340, have
efficient wings, enhanced by winglets. The Airbus A340-500 has an operating
range of 13,921 kilometres (8,650 miles), the second longest range of any
commercial jet after the Boeing 777-200LR (range of 17,446 km or 9420 nautical
miles). These are competing strongly with the equivalent Boeing products and may
partly explain the cessation of airliner production at Lockheed in 1983 and the
take-over of McDonnell Douglas by the surviving US builder of long-distance
airliners, Boeing, in 1996-1997. The company is particularly proud of its use of
fly-by-wire technologies and the common cockpit and systems in use throughout
the aircraft family, which make it much easier to train crew.
Product list and details (date information from Airbus)
||2 engine, twin aisle,
||2 engine, twin aisle, modified A300
||2 engine, single aisle, shortened 6.17m from A320
||2 engine, single aisle, shortened 3.77m from A320
||2 engine, single aisle
||2 engine, single aisle, lengthened 6.94m from A320
||2 engine, twin aisle
||4 engine, twin aisle
||2 engine, twin aisle
||4 engine, twin aisle, double deck
||Apr 27, 2005
In January 1999 Airbus established a separate company, Airbus Military S.A.S.,
to undertake development and production of a turboprop powered military
transport aircraft (the Airbus Military A400M.) The A400M is being developed by
several NATO members, Belgium, France, Germany, Luxembourg, Spain, Turkey, and
the UK, as an alternative to the C-130 Hercules. Expansion in the military
aircraft market will reduce, but not negate, Airbus' exposure to the effects of
cyclical downturns in civil aviation.
- Airbus A400M
- A310 MRTT (Multi Role Tanker Transport)
- A330 MRTT
Competition with Boeing
In 2003, for the first time in its 33-year history, Airbus delivered more
jet-powered airliners than Boeing. Boeing states that the Boeing 777 has outsold
its Airbus counterparts, which include the A340 family as well as the A330-300.
The smaller A330-200 competes with the 767, outselling its Boeing counterpart,
but it is speculated that the introduction of the 787 may improve Boeing's
market share in this segment. The A380 is anticipated to further reduce sales of
the Boeing 747, gaining Airbus a share of the market in very large aircraft.
Currently there are around 3,800 Airbus aircraft in service, with Airbus
winning more than 50 per cent of aircraft orders in recent years. But Airbus
products are still outnumbered 6 to 1 by in-service Boeings (there are over
4,000 Boeing 737s alone in service, for example). This however is indicative of
historical success - Airbus made a late entry into the modern jet airliner
market (1972 vs. 1958 for Boeing). Airbus won a greater share of orders and
delivered more aircraft in 2003 and 2004.
At the aircraft show in Le Bourget in June 2005, Airbus outperformed Boeing
in aeroplane sales. Airbus has contracted for the sale of 280 airliners with a
contract price of 34 billion dollars, whereas Boeing received orders for 146
aeroplanes priced in total with 15 billion dollars.
Boeing has continually protested over "launch aid" for Airbus from the
governments of the partner nations, while Airbus has argued that Boeing receives
illegal subsidies through military and research contracts and tax breaks.
In July 2004. Harry Stonecipher (Boeing CEO) accused Airbus of abusing a 1992
non-binding agreement covering launch aid. Airbus is given launch aid from
European governments with the money being paid back with interest, but only if
the plane is a commercial success, and contends that this is fully compliant
with the 1992 agreement and WTO rules. The agreement allows up to 33 per cent of
the programme cost to be met through government loans which are to be fully
repaid within 17 years with interest and royalties. These loans are held at a
minimum interest rate equal to the cost of government borrowing plus 0.25%,
which would be below market rates available to Airbus without government
support. Airbus claims that since the signature of the EU-U.S. Agreement in
1992, it has repaid European governments more than U.S.$6.7 billion and that
this is 40% more than it has received.
On the other hand Airbus argues that the pork barrel military contracts
awarded to Boeing (the second largest U.S. defence contractor) are in effect a
form of subsidy (see the Boeing KC-767 military contracting controversy). The
significant U.S. government support of technology development via NASA also
provides significant support to Boeing, as does the large tax breaks offered to
Boeing which some claim are in violation of the 1992 agreement and WTO rules. In
its recent products such as the 787, Boeing has also been offered substantial
support from local and state governments.
In January 2005 the European Union and United States trade representatives,
Peter Mandelson and Robert Zoellick (since replaced by Robert Portman)
respectively, agreed to talks aimed at resolving the increasing tensions. These
talks were not successful with the dispute becoming more acrimonious rather than
approaching a settlement.
On May 31, 2005 the United States filed a case against the European Union for
providing allegedly illegal subsidies to Airbus. 24 hours later the European
Union filed a complaint against the United States protesting support for Boeing.
Portman and Mandelson issued a joint statement stating: "We remain united
in our determination that this dispute shall not affect our cooperation on wider
bilateral and multilateral trade issues. We have worked together well so far,
and intend to continue to do so."
Tensions increased by the support for the Airbus A380 have erupted into a
potential trade war due to the upcoming launch of the Airbus A350. The A350
programme is to be launched with state aid and has the potential to spoil
Boeing's most successful project in recent years, the 787 Dreamliner. However,
if Airbus cannot obtain state aid, then their chances of spoiling Boeing's
success will diminish greatly. Also, if state aid is removed, Airbus will find
it very difficult to compete against Boeing, since Airbus will have to fund
everything on its own.
EU trade officials are questioning the funding provided by the Japanese
Government and Japanese companies for the launch of the 787.
Competition in Japan
The two large Japanese airlines, Japan Airlines and All Nippon Airways, are
traditionally loyal Boeing customers, the manufacturer's products accounting for
about 90% of their fleets. Both airlines have some Airbus products (A300 for
JAL, not ordered by JAL but in the fleet because of the takeover of Japan Air
System, and A320/A321 for All Nippon Airways).
However, ANA have started the transition to an all-Boeing fleet after the
entry into service of 787 and 737 NG. Significantly, no orders have been taken
for the A380 from Japanese airlines, despite the large 747 fleets operated in
the country. Airbus has established a branch office in Japan in order to
increase the sales efforts. In 2005, a success for Airbus is Sagawa Express'
firm order of 1 A300-600F aircraft and 1 option of the same type.
International manufacturing presence
The two assembly plants of Airbus are in Toulouse, France and Hamburg,
Airbus, however, has a number of other plants in different European
countries, reflecting its foundation as a consortium. An original solution to
the problem of moving aircraft parts between the different factories and the
assembly plants is the use of "Beluga" specially enlarged jets, capable of
carrying entire sections of fuselage of Airbus aircraft. This solution is also
being investigated by Boeing, who are considering producing an enlarged version
of their 747 aircraft to transport the components of the 7E7. An exception to
this scheme is the A380, whose fuselage and wings are too large for sections to
be carried by the Beluga. Large A380 parts are brought by ship to Bordeaux, and
then transported to the Toulouse assembly plant by a specially enlarged road.
North America is an important region to Airbus in terms of both aircraft
sales and suppliers. 2,000 of the total of approximately 5,300 Airbus jetliners
sold by Airbus around the world, representing every aircraft in its product line
from the 107-seat A318 to the 565-passenger A380, are ordered by North American
customers. US contractors supporting an estimated 120,000 jobs earned estimated
$5.5 billion (2003) worth of business. For example, the A380 has 51% American
content in terms of work share value.
Workforce by countries
|| Airbus direct employees
|| Employed by suppliers
||to be added
||to be added
||to be added
||to be added
|People's Republic of China
||to be added
(Data as of December 31, 2003)
Workforce by sites
| Airbus site ¹
(Saint-Martin-du-Touch, Colomiers, Blagnac)
(Finkenwerder, Stade, Buxtehude)
|Madrid (Getafe, Illescas)
|Cadiz (Puerto Real)
|Washington, D.C. (Herndon, Ashburn)
|Miami (Miami Springs)
(Data as of December 31, 2003)
¹ Name of the urban/metropolitan area appears first, then in
parenthesis are the exact locations of the plants