Tom Enders: Airbus 2009 Review and 2010 Outlook

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Below follows Airbus CE Tom Enders’ annual Airbus review and outlook, delivered yesterday in Seville, Spain at the Airbus Military A400M production facility. Enders noted that the A330-based Multi-Role Transport Tanker and the A400M transport will this year dominate the agenda for Airbus Military. For the civil side the same can be said for the A350 extra-wide body (XWB) airliner that is still in development and the A380 “superjumbo”. Editor.

As expected, 2009 has been a very difficult year for the aviation and airline industry. However, all the doomsday-prophets and “experts” who told us a year ago that we had to brace for at least a 20-30% production cut during 2009 have been proven completely wrong. In fact, we managed to produce and deliver almost five hundred commercial aircraft (498), a new Airbus record; plus 16 in our military division.

In December alone we delivered 61 commercial aircraft to our customers, another record. That, dear colleagues, is a tremendous achievement, clearly beyond our hopes twelve months ago, and I’d like to thank all of you for your strong engagement and valuable contributions.

Maybe a good indicator for all the hard work behind the new delivery record is the number of delivery slots or planes that had to be rescheduled, i.e. postponed or advanced, during the last 18 months: roughly 600 planes covering the 2009 – 2011 period!

I’d also like to commend our industrial partners, the financing institutions and especially the European Credit Agencies for their strong support and flexibility.

With 310 new commercial and 22 military orders (including 3 MRTT’s) we also made our order in-take target – the crystal ball John Leahy and I used for forecasting last January obviously worked quite well. And, very important, we achieved this result without compromising pricing!

Other outstanding achievements in 2009 were the integration of MTAD into Airbus (“Airbus Military”), the smooth start and operation of our China FAL in Tianjin, the first flight of the A330 Freighter, the good progress made in A350 XWB development and the revamping and strengthening of the A400M programme, crowned by the first flights of the plane in December.

Last not least, Power8: we have achieved, again, a better result than planned, 2bn€ gross savings. We almost made our 2010-target already in 2009. In the low dollar-environment we’re operating in, this is a very important achievement and I’d like to thank all of you who have contributed. Where would we be without Power8 and the 2bn€ savings we reached so far? Power8+ is not a “nice to have” – it’s a MUST for Airbus!

I will not hide, however, that we had also one notable disappointment last year: the A380, as we did not achieve the 2009 delivery target. Additionally, the operational reliability level for the in-service air-craft is not yet where our customers expect it to be two years after EIS.

True, part of the problem did stem from the cus-tomers’ requests for a rescheduling of deliveries. But, more importantly, we still haven’t come to grips with the complexity of the aircraft and the (over-)complexity of our engineering and production processes, which result in significant additional cost and delays.

After a thorough internal bottom-up review we have decided in December on various, pragmatic im-provement measures that now need to be imple-mented swiftly and vigorously. We will talk more about this in our upcoming “roadshows”. For 2010 we not only plan to deliver, we HAVE to deliver at least 20 aircraft.

On the positive side we are happy to hear from our customers that they – and their passengers – love the A380. And even though the A380 will remain a financial liability for Airbus for still some years to come, for airlines it is a great revenue and profit generator. That is definitely good news and should be encouraging to all of us, particularly for those of you working hard and not without frustrations on the programme. It does suggest that all the efforts and resources we’re pouring into the A380 today will yield good returns in some years from now.

If we look forward into 2010 and the challenges we are going to face, one issue stands out right now: the A400M and the financial solution we urgently need to find together with our government customers.

Let me first of all assure you that the Airbus top management, together with Louis Gallois and EADS, will do everything possible and reasonable to continue the programme. We know from flight testing so far that we have indeed a great plane under development, we have re-organised the pro-gramme efficiently and we have given our custom-ers complete transparency on the technical and financial status. But we cannot carry on with the A400M programme without a significant financial contribution from our customers. Otherwise we would eventually jeopardise the whole of Airbus (and maybe even EADS!), our ability to innovate and modernise our product offering and, hence, our competitiveness.

I can assure you that I will not, under any circumstances, go down this road and I hope for all your understanding, whether you are working in the commercial or military field of our business. If the programme were stopped, this would no doubt be very painful but we would swiftly redeploy resources from A400M, especially engineers, to the A350 XWB and other needy programmes. We have started to draw up contingency plans already in December.

For the A350 XWB programme as well, 2010 will be a decisive year. More than 3000 Airbus engineers are now working on the programme and we need further reinforcements, particularly in the fuselage and wing areas. Important milestones are ahead of us, manufacturing has started already and we have challenges abound: weight, new materials and processes, new technologies, schedule, amongst other areas need strong management at-tention and appropriate resourcing.

We will continue in 2010 with our investments into upgrading the A320 Family. After the “sharklet” decision in 2009 we intend to decide this year on a possible re-engining of the A320. All this to keep our “bread & butter” programme selling and flying well into the next decade.

For our A330, freighter certification and delivery start later this year will be important targets. Whether we will bid for the US tanker is still open and simply depends on whether we get a fair chance in this highly “politicised” contest or not. As importantly, we will see the first A330 MRTT deliveries to our Australian customer in 2010 and the development of the FSTA-tanker for the UK.

In a nutshell, tanker and A400M will dominate the agenda for Airbus Military in 2010.

Undoubtedly, dear colleagues, we have again a tall agenda for 2010. Much depends on the recovery of the economy and our airline customers and our ability to keep production at the level of 2008/09. Significant improvements in the A380 programme – deliveries; lead time; in-service reliability – are vital and so is our ability to keep the A350 XWB development on track, one year before the start of Final Assembly. The agenda for A400M, in case we succeed in our negotiations with our government customers in the next weeks, will be dominated by the flight test programme. MSN2 and MSN3 are on track to take to the skies in the coming months. And, and, and…

All of this is doable if, and only if, we all remain fo-cused and engaged on our tasks and work open-ly, in an integrated way, with our colleagues in oth-er areas and functions. The crisis year 2009 has shown again what we can achieve if we work as “Team Airbus”. You can trust that my col-leagues and I in top management will do what we can to lead and support you – towards our joint success.



I wish you a healthy, happy and successful 2010!