Essay About Consortium Of European Aviation Companies And Germanys Deutsche Airbus

Airbus Case Study
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History
Airbus is a consortium of European aviation companies in an attempt to compete
with their larger American counterparts. Airbus wanted to compete with the American
companies such as Boeing, McDonnell Douglas, and Lockheed Martin. In the mid
1960s, tentative discussions started about the possibility of forming a company for the
large European companies to control. Airbus was officially formed in 1970 after
Frances Sud-Aviation agreed to combine with Germanys Deutsche Airbus (which itself
was already a consortium made up of several other Germany aviation companies). The
United Kingdom, who was originally in the mix until they backed out in support of their
own British Airline Company (BAC) but later rejoined Airbus in 1979. In 1974, CASA
of Spain joined the new-formed consortium. The name “Airbus” was chosen because it
was a term used by the airline industry in the 1960s to refer to commercial airplanes and
because this term was acceptable for the French Linguistically (Wikipedia, 2006). In
1972, Airbus made its first maiden voyage with its first production model the A300.
“Initially the success of the consortium was poor but by 1979 there were 81 aircraft in
service” (Wikipedia, 2006). In 1981, Airbus was guaranteed a spot as a major factor in
the aviation production market because of the mass orders Airbus was delivering. Airbus
incorporated itself in 2001 under French law and in 2001 again became a fully integrated
company through a merger of the companies from Spain, France, and Germany getting
80% and The United Kingdoms BAE System getting 20%. The merger formed the
European Aeronautic Defense and Space Company, or EADS (Airbus, 2006). Airbus is
currently classified as a simplified joint stock company that is for the most part private,
yet it does publish its financial statements even though it does not have to under French
law (Hopkins, 2006). Right now, Airbus is owned jointly by EADS (owns 80%) and by
BAE Systems (owns 20%). These two companies are Europes two biggest military
defense contractors. Currently, BAE Systems is selling out and would like EADS to buy
their shares (20%) in the company. The deal will be finalized after BAE Systems shares
are valuated by an investment banker company known as Rothschild.
Airbus is a very large employer in Europe and internationally. Airbus represents
over 85 nationalities and over 20 different languages are spoken with English being the
chosen business language. “Airbus employs over 55,000 people at sixteen sites in four
European countries: Germany, France, The United Kingdom, and Spain” (Airbus, 2006).