Airbus flies into new era with change of CEO

Guillaume Faury succeeds Tom Enders as the CEO of Airbus. (File/AFP)
Updated 10 April 2019

Airbus flies into new era with change of CEO

  • Faury will inherit a financially sound, highly profitable business with an order book of 7,350 passenger planes
  • Analysts see Airbus as having an opportunity to profit from the booming airline market, particularly in Asia

PARIS: Frenchman Guillaume Faury takes over as CEO of European aerospace giant Airbus on Wednesday, looking to benefit from the current troubles of rival Boeing and limit potential disruption from Brexit and Donald Trump’s trade threats.
The 51-year-old will replace Tom Enders, who is stepping down after five years leading the France-based group whose 129,000 employees manufacture airliners, helicopters and satellites.
Enders oversaw further expansion of the group, but his rein was clouded by a recent decision to scrap the loss-making A380 super-jumbo range of Airbus planes as well as multiple probes into suspect payments.
The German’s retirement package — worth 37 million euros ($41 million) including pension and stocks — has sparked controversy in France and a pledge from the government that it will legislate to limit huge corporate payoffs.
Faury will inherit a financially sound, highly profitable business with an order book of 7,350 passenger planes, which would be enough to keep factories running for a decade at current production rates.
Analysts see Airbus as having an opportunity to profit from the booming airline market, particularly in Asia, and from the global grounding of Boeing’s 737 MAX plane after two recent deadly crashes involving the popular new airliner.
“They simply need to use this window of Boeing weakness to hoover up orders in Asia, if they can,” said aerospace analyst Neil Wilson at Markets.com, an online financial trading platform.
According to industry body IATA, Asia will account for most of growth in the industry over the next 20 years, with more than half of the new passenger traffic coming from the region.

But Faury will also have several tricky issues in his inbox, including handling the fall-out from Britain’s decision to leave the European Union, which threatens to disrupt the company’s long and complicated supply chains.
“Brexit could well mean a complete rethink of long-term manufacturing strategy for Airbus and brave decisions may need to be made unless a satisfactory outcome can be agreed by UK and Brussels,” independent aviation analyst Howard Wheeldon told AFP.
Enders branded the British government’s handling of Brexit a “disgrace” in January and warned that a “no deal” exit would led to “very harmful decisions” affecting the production of airline wings in southwest England.
The US is another source of worry for the group after US President Trump lashed out again at the EU this week, vowing to impose fresh tariffs over subsidies to Airbus.
For more than a decade, Washington and Brussels have accused each other of unfairly subsidising Boeing and Airbus respectively and have fought repeated battles at the World Trade Organization, which polices global trade rules.

Faury will also be wary of multiple investigations in France, Britain and the United States into possible bribes paid to win contracts between 2008 and 2013 that could cause more embarrassment — and lead to costly fines or prosecutions.
The inquiries stem from Airbus’s own disclosure in early 2016 of undisclosed payments to middlemen in securing several contracts, in particular in Asia.
If convicted in the US, it would effectively be shut out of defense and civil aviation contracts for years — which would be a boon for Boeing.
Faury, a married father of three, will take over after a board meeting in Amsterdam on Wednesday.
He has spent most of his career in the aerospace industry, specializing in helicopters.
He started his career in the French defense ministry before joining Airbus’ helicopter division in 1998.
In 2009, he left for a four-year stint in research and development at French car group Peugeot before rejoining Airbus.
In February 2018, he became head of the civil aviation division, the company’s biggest and most high-profile, which is considered the launching pad for the groups’ top job.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: