From European dream to global giant: Airbus marks half century

The logo of European aircraft manufacturer Airbus outside entrance of the site of Airbus' Wings Campus in Blagnac. (AFP)(File/AFP)
Updated 29 May 2019

From European dream to global giant: Airbus marks half century

  • Its story has been marked by setbacks, political turbulence and production problems but Airbus management believes it can confidently look forward to the next half century
  • The aircraft paved the way for the more fuel efficient A320neo which has become the backbone of the company

PARIS: Fifty years ago at the Paris air show, France’s transport minister and Germany’s economy minister signed an agreement that would change aviation history.
The year was 1969 and Europe needed a smaller, lighter and more cost-effective passenger aircraft than American rivals. Five years later, the A300B2 was born, a short-to-medium range plane with two engines, despite safety concerns in an era when three engines was the standard minimum.
Fast-forward to 2019, Airbus is celebrated as a success of European cooperation, one of two kings of global civil aviation along with Boeing. Around the world, an Airbus takes off or lands every two seconds.
It now produces passenger planes ranging in size up to the A380 jumbo jet, helicopters, fighter jets and is even involved in space exploration.
Its story has been marked by setbacks, political turbulence and production problems but Airbus management believes it can confidently look forward to the next half century.
“Airbus produces half of the world’s large commercial aircraft and has thriving helicopter, defense and space businesses,” said CEO Guillaume Faury, who in April replaced Tom Enders who served five years at the helm.
“We employ 130,000 highly-skilled people globally and are a powerful engine of productivity, exports and innovation for Europe.”
The firm delivered its last thousand planes in just 30 months. But in the early days, it took nearly twenty years to produce a thousand aircrafts.
It faced criticism for developments like fly-by-wire controls, which improve handling, and flight envelope protection, which stop the plane performing maneuvers outside its performance limits.
Apart from technological advances, cracking America was a key ingredient in creating the global giant. The A300 made a strong impression on Frank Borman, the former Apollo astronaut who headed Eastern Air Lines and championed the idea of buying more economical planes.
In 1984, Airbus launched the A320, a single-aisle, medium-haul aircraft to challenge Boeing, which until then had dominated the largest segment in the civil aviation market.
The aircraft paved the way for the more fuel efficient A320neo which has become the backbone of the company, strengthening its hold on the key market segment after Boeing’s 737 MAX planes were grounded after two deadly crashes in March and October.
Despite a failed deal with British defense firm BAE Systems in 2012, Airbus’ partnership with Canadian Bombadier’s C Series program in 2018 enhanced its position as a global force.
France and Germany still hold 11 percent stakes in Airbus through holding companies with a smaller 4 percent stake held by the Spanish government. The rest of the shares are traded on the stock exchange.
But production hasn’t always run smoothly. The firm announced in January it would scrap production of its A380 passenger giant by 2021 due to lack of orders.
The double decker jet earned plaudits from passengers but failed to win over enough airlines to justify its massive costs.
Key clients have also hit trouble as some airlines hit financial difficulty with Europe’s third biggest low-cost airline Norwegian saying it was further delaying deliveries of Airbus and Boeing 737 MAX planes it had ordered.
The company in April reported a slump in first quarter net profits which fell 86 percent from the same period in 2018 at 40 million euros ($45 million).
Airbus is also under investigation in France, Britain and the United States after disclosing transaction irregularities in 2016, while US President Donald Trump has threatened the European Union with new tariffs if it does not end subsidies to Airbus.
But 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 series plane after two recent deadly crashes involving the popular new airliner.
Airbus’s boss Guillaume Faury said the firm aims to continue being a leader in aviation innovation.
“The aerospace industry stands on the cusp of a technological revolution to match anything in its history,” he said.
“European aerospace should aspire to lead this coming revolution in innovation and the transition to a more sustainable aviation sector.”


Russia vows cooperation with OPEC to keep oil market balanced

Updated 21 November 2019

Russia vows cooperation with OPEC to keep oil market balanced

  • Moscow not aiming to be world’s No.1 crude producer, Putin tells annual investment forum

MOSCOW: President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries (OPEC) have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal.

OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

“Our (common with OPEC) goal is for the market to be balanced, acceptable for producers and consumers and the most important — and I want to underline this — predictable,” Putin told a forum on Wednesday.

In October, Russia cut its oil output to 11.23 million barrels per day (bpd) from 11.25 million bpd in September but it was still higher than a 11.17-11.18 million bpd cap set for Moscow under the existing global deal. Putin told the forum that Russia’s oil production was growing slightly despite the supply curbs deal but Moscow was not aiming to be the world’s No. 1 crude producer. Currently, the US is the world’s top oil producer.

“Russia has a serious impact on the global energy market but the most impact we achieve (is) when working along with other key producers,” he said. “There was a moment not that long ago when Russia was the world’s top oil producer — this is not our goal.”

Russia plans to produce between 556 million and 560 million tons of oil this year (11.17-11.25 million bpd), Energy Minister Alexander Novak said separately on Wednesday, depending on the volume of gas condensate produced during cold months.

Russia will aim to stick to its commitments under the deal in November, Novak told reporters.

Russia includes gas condensate — a side product also known as a “light oil” produced when companies extract natural gas — into its overall oil production statistics, which some other oil producing countries do not do.

As Russia is gradually increasing liquefied natural gas production (LNG), the share of gas condensate it is producing is also growing. Gas condensate now accounts for around 6 percent of Russian oil production.

Novak told reporters that in winter, Russia traditionally produces more gas condensate as it is launching new gas fields in the freezing temperatures.

“We believe that gas condensate should not be taken into account (of overall oil production statistics), as this is an absolutely different area related to gas production and gas supplies,” he said.

Three sources told Reuters on Tuesday that Russia is unlikely to agree to deepen cuts in oil output at a meeting with fellow exporters next month, but could commit to extend existing curbs to support Saudi Arabia.

On Wednesday, Novak declined to say that Russia’s position would be at upcoming OPEC+ meeting. Reuters uses a conversion rate of 7.33 barrels per ton of oil.