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.


S&P downgrades trio of Dubai developers as pandemic hits property and retail

Updated 11 min 34 sec ago

S&P downgrades trio of Dubai developers as pandemic hits property and retail

  • Gulf states are being hit hard by the coronavirus pandemic that has come at a time of weak oil prices

RIYADH: The credit ratings of three Dubai property companies were downgraded by S&P as the coronavirus pandemic hits confidence in the retail and real estate sectors.
S&P Global Ratings reduced the credit ratings for the real estate developer Emaar Properties as well as Emaar Malls to +BB from -BBB with a negative forward outlook, adding that it sees a “weakening across all its business segments” in 2020. S&P also cut its rating for DIFC Investments to +BB from -BBB, while keeping a stable outlook.
Gulf states are being hit hard by the coronavirus pandemic that has come at a time of weak oil prices, heaping pressure on governments, companies and employees.
The ratings agency expects the emirate’s economy to shrink by 11 percent this year
“The supply-demand imbalance in the realty sector appears to have been exacerbated by the pandemic. We now expect to see international demand for Dubai’s property to be subdued, and the fall in residential prices to be steeper than we had expected, lingering well into 2021” S&P reported.
Despite easing restrictions and the opening of the economy, S&P said that overall macroeconomic conditions remained challenging.
Global travel restrictions and social distancing constraints “significantly weigh on Dubai’s tourism and hospitality sectors” the rating agency reported.
Still, Dubai’s tourism chief was upbeat on the emirate’s prospects when international tourism resumes.
“Once we do get to the other side, as we start to talk about next year and later on, we see very much a quick uptick. Because once things normalize, people will go back to travel again,” Helal Al-Marri, director general of Dubai’s Department of Tourism and Commerce Marketing told AFP in an interview.