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Airbus SA Parent EADS in 'Major Crisis'

Posted on: Friday, 16 June 2006, 12:00 CDT

French stock market regulators launched twin investigations of European Aeronautic Defence & Space Co., parent of Airbus SA.

Meanwhile, an executive of that parent blamed a top Airbus official for the aeronautical giant's recent production delay, the Financial Times reported Friday.

France's Autorites des marches financiers, or AMF, is evaluating EADS share sales by several directors, including Noel Forgeard, the joint chief executive who pocketed $3.2 million just weeks before the board learned of critical production delays of the A380 superjumbo. Besides Forgeard, three of his children also sold EADS shares for $1.75 million.

Meanwhile, the Financial Times said, Arnaud Lagardere and Manfred Bischoff, the joint EADS chairmen who represent French and German shareholder interests, launched an inquiry into the failure to alert the board earlier to the delays.

Lagardere said EADS was in a major crisis, the Financial Times report said.

That crisis erupted earlier this week when Airbus stunned its global A380 customers with word of a 6- or 7-month delivery delay of the superjumbo.

Besides more than $3 billion in estimated lost revenues, canceled orders and a 26-percent drop Wednesday in share price, Airbus faces calls for hundreds of millions in penalties plus demands for loaner aircraft from airlines that have not abandoned Airbus.

Source: United Press International

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