Monday, September 19, 2016

Airbus could be making some serious changes to its business

Airbus Group is in the midst of a period of financial uncertainty.

In July, the European aviation giant announced $1.5 billion in charges due to setbacks in the company's A350 airliner and A400M military transport programs.

In response, Airbus Group CEO Tom Enders will announce a major restructuring and cost cutting plan next month, the FT's Peggy Hollinger reported.

According to the FT, the plan will see Enders take tighter control over the Airbus' civil aviation subsidiary, which accounts for the majority of the group's income.

Further, Hollinger reported that Enders plans to streamline duplicate positions that exist within the mother company and its subsidiaries.

Airbus has struggled to ramp up development and production of its next generation A350 airliner. Even though the company remains committed to a goal of producing 10 of the wide-body jets per month by 2018, Airbus delivered just 12 A350s to customers over the first half of the year.

At the same time, the A400M military transport has beset by a series of technical issues and development delays. In June, the German government grounded two of its three A400Ms due to issues with the aircraft's drivetrain.

According to Bloomberg, the A400M is more than four years late and $5.6 billion over budget.

In addition to the charges, Airbus will also slow down production of the A380 superjumbo from 27 planes a year to 12 a year in 2018 to buy the sales team more time to secure orders.

Airbus representatives were not immediately available for comment.

(Benjamin Zhang - Business Insider)

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