BERLIN/PARIS: Airbus Group has unveiled plans to sell half a dozen businesses with combined annual revenues of around $2.6bn, simplifying its Defence and Space division to focus on warplanes, missiles, launchers and satellites.
Announcing the results of a portfolio review, Europe’s largest aerospace group signalled a break with previous efforts to diversify into security activities and a halt to investment in defence electronics, in which it lacks the scale of rivals.
Europe’s defence industry is struggling as cash-strapped governments cut back on military spending. EADS, later renamed Airbus, responded in 2012 by trying to merge with Britain’s BAE Systems, but the deal was blocked by Germany. That, coupled with the stronger-than-expected growth of its jetliner business, led Airbus to drop a previous goal of having broadly balanced revenues from its commercial and defence arms, and launch a reassessment of its defence and space activities.
The group said yesterday it would sell its Professional Mobile Radio secure communications assets and confirmed plans to sell a 49-percent stake in submarine supplier Atlas Elektronik, unwinding two efforts at diversification embarked on nine years ago. It said it would also consider selling other commercial and non-governmental satellite communications activities.
Also up for sale are systems and software company ESG, and three smaller units: US-based environmental systems supplier Fairchild Controls, German cabin simulator maker Rostock System-Technik and AvDef, a small aviation company in southern France that trains fighter pilots.
In early trading, Airbus Group shares were down 0.7 percent, in line with the broader European market. The move comes weeks after a reorganisation of space launcher activities jointly with France’s Safran and leaves Airbus Group’s share of the Eurofighter and MBDA missile consortia, as well its own A400M airlifter, at the centre of a non-jetliner portfolio focused on aeronautics and space.
“We came to the conclusion that our division must focus on the following core businesses: Space, Military Aircraft, Missiles, and related Systems and Services,” Bernhard Gerwert, head of the Defence & Space business, said in a letter to staff.
“These are the key areas in which we will further invest to strengthen our leading position.”
The shake-up is likely to test the group’s prickly relations with the German government, following warnings from group Chief Executive Tom Enders about the impact of Berlin’s stringent export controls on defence jobs and industrial investment.
In an interview, Gerwert played down the row, however. “I want to make clear that this is not just about cutting more jobs or closing more sites, quite the contrary,” he said. “We’re focusing on certain businesses and are looking for someone who’s willing to develop and invest in these businesses.”
Reuters
PARIS: Airbus is conducting the final stage of ground trials as it edges towards the keenly-awaited first flight of its revamped A320neo aircraft, the planemaker said yesterday.
The first test aircraft is on the “final run-in” towards its maiden flight, a spokesman said in answer to a query, but added it was too early to predict an exact date.
Airbus is sticking to its target for a first flight in the third quarter, or by the end of September, the spokesman said.
Maiden flights need good weather and are usually announced just a few days before they are expected to happen.
Industry sources have said the flight was tentatively planned in early September, but had to be pushed back because of a problem with engine testing, raising some concerns that the flight could slip to October.
Airbus and its engine maker Pratt & Whitney have declined to comment on the precise schedule, but analysts are paying close attention because the success of the new fuel-saving version of Airbus’s best-selling A320 jet depends in part on new engine technology to fulfil a backlog of 3,000 orders from airlines.
Another person familiar with the matter said preparations had been disrupted by a problem with a bird strike test.
The test, in which bird carcasses are fired at an engine to test its ability to withstand a potentially dangerous bird strike, is one of several key steps towards certification.
Pratt & Whitney declined to comment on the test.
“We routinely test our engines and we do not share specifics of our test results,” a spokeswoman for the United Technologies subsidiary said.
The first flight of the A320neo is one of several important milestones expected for Airbus this month including the final safety certification of its latest long-haul jet, the A350.
Simultaneous European and US safety approval is expected around the end of the month, allowing Europe’s first mainly carbon-composite jetliner to be delivered to launch customer Qatar Airways in the following weeks, subject to final checks.
The Gulf carrier, which has a reputation for stringent attention to detail, is expected to submit the jet to a rigorous inspection after earlier refusing to take its first A380 superjumbo in a standoff that has lasted more than three months.
Industry sources said last week the airline had agreed to take the first of 10 A380s it has ordered after the two sides resolved a dispute over quality of cabin work.
Qatar Airways has begun taking bookings for A380 services from Doha to London starting from October 10, according to the airline’s website, replacing one of its Airbus A340 jets and adding to expanding superjumbo services at Heathrow, which according to Aviation Week already handles about 15 A380s a day. Reuters
