Big Plane May Give Lift to EADS
Boeing Co. often complains that government subsidies allow its European rival Airbus to compete unfairly. But the biggest financial lift for Airbus in coming years could be from its gargantuan new product: the two-deck A380 superjumbo jetliner, now in production.
If the A380 proves a success in the market, the fat profits Airbus is promising could boost shares in the plane maker's Franco-German parent, European Aeronautic Defence & Space Co., which owns 80% of Airbus.
Hefty challenges remain for the A380, the world's largest passenger jet, which is slated to make its first flight in a few weeks and enter service in the first half of 2006 with Singapore Airlines. The plane still faces safety and certification testing, and Airbus can't afford to have something go wrong. Yesterday's agreement between the U.S. and the European Union to ratchet down a diplomatic dispute over subsidies to Airbus and Boeing, though, appears to mean one less worry for now.
As Airbus prepares a gala unveiling of the first A380 at its Toulouse, France, headquarters on Tuesday, investors are considering the potential upside to EADS from the $12 billion-plus project. Roughly 34% of EADS shares are publicly traded, mainly in Paris and Frankfurt. Nearly 20% of those shares are held by U.S. institutional investors, the company says.
The stock closed yesterday on the Paris exchange at �22.42 ($29.35), up fractionally from �22.29. It rose 13.5% in 2004.
Robert Mazuelos, a portfolio manager at Hansberger Global Investors Inc. in Fort Lauderdale, Fla., who has followed the aerospace industry for many years, is betting that A380 is "going to be wonderful for the company's profits." Hansberger holds more than one million EADS shares. "We're going to be rewarded for holding the stock," Mr. Mazuelos predicts.
Boeing knows what can happen. Its 747 jumbo jet held a monopoly on the top end of the market for nearly three decades as the biggest passenger plane flying. That gave the Chicago-based plane maker outsize profits on 747s that it could use to fund development of other products and cross-subsidize sales of smaller planes that faced competition.
The A380, which seats some 30% more passengers than a 747, "will be what the 747 has been for Boeing," Mike Turner, chief executive of Britain's BAE Systems PLC, predicted in a recent interview. BAE owns 20% of Airbus.
Airbus already has 149 firm or announced orders for the plane, following a decision by United Parcel Service Inc. on Monday to buy 10 of the planes in its freighter version. If all the current A380 customers exercise their options to buy additional planes, sales will top 200 units. Airbus says that once it delivers 250 A380s, its potential downside financial risk from an investment of roughly $5 billion in the project will be covered. Investments by suppliers and European governments cover the rest of the A380's development cost.
Airbus has projected a world-wide market for around 1,500 giant planes in the next 20 years, of which it expects the A380 to capture half. Boeing says the market is far smaller because passengers want to fly direct and avoid the hub connections that many A380 flights would require to reach smaller cities. But Airbus retorts that demand exists and will grow because many airports and routes are getting too congested for smaller planes, while populations and distances -- especially in Asia -- demand a bigger plane.
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Airbus says A380 sales are running ahead of plan. The A380 has a list price now of roughly $280 million, although airlines generally get a discount. As with passenger cars, big jetliners usually command higher profit margins than small ones -- as long as the manufacturer doesn't need to discount too much. Mr. Turner at BAE said the prices Airbus is getting for A380s are "better than the business case we accepted at the beginning of the program" in 2000. EADS and BAE expect an internal rate of return of more than 20% on the A380.
Last month, EADS warned that the A380 could exceed its development budget by as much as �1.45 billion, or around 12%, over coming years. But Airbus managers say such an overrun could be easily absorbed if they get the A380's production costs right.
"The main driver of profitability is the recurring cost" of production, Airbus Chief Executive No?l Forgeard said in a recent interview.
Although the 555-seat jetliner is a far cry from mass-market goods such as televisions or running shoes, the fundamental manufacturing economics are identical: If Airbus can build an A380 for less than its sales price, it makes a profit. Because the A380 is so complex, holding down manufacturing costs poses a major challenge.
Charles Champion , the project's chief engineer, said in a recent interview that the first 10 A380s are coming together "faster than originally planned," although many issues lie ahead. He said it won't be until his team has built around 100 A380s, which should come in 2008, that actual production costs become clear.
The company's recent track record bodes well, observers say. "Airbus has been very focused in all its programs on driving through efficiencies in manufacturing," says Ian Massey, who served as chief financial officer of Airbus for 10 years until 2001 and is now an executive vice president of Republic Financial Corp., an investment company in Denver.
Still, the challenges for Airbus and EADS could temper interest in EADS shares. The 2004 rise in the stock, listed in Paris, Frankfurt and Madrid, compared with a 22.9% jump for Boeing and a 17.7% rise in the Dow Jones World Aerospace Index.
Sasha Kemper, a senior fixed-income analyst at Principal Financial Group in Des Moines, Iowa, questions whether sufficient A380 demand exists for Airbus to sell enough to make its projected return targets -- not just break even.
The A380's size could add so many seats to the market that it hurts airline profits, Chris Logan and Hugo Scott-Gall, equity analysts at Goldman Sachs in London, warned in a recent report. They say the A380 "represents a risk to pricing" power among airlines, especially on lucrative Asian routes. If the A380 swamps airline profits, demand for the plane could drop quickly, some analysts say.
More immediately, Airbus "is going to be facing major currency head winds" over the next few years from the strengthening euro, says Kevin Lilley, a senior fund manager of European equities at Royal London Asset Management Ltd. in London. Airbus is moving to protect itself from the euro's strength by buying more components priced in dollars.
Mr. Lilley says that because of EADS's exposure to dollar-euro fluctuations, his fund one year ago sold off its $10 million position in the company's shares, at a significant profit. But while he is cautious about EADS's currency issues, Mr. Lilley says the A380 should be "a major strategic win" for the company and could be its "trump card" against Boeing.
巨无霸新客机引领EADS展翅高飞
波音公司(BOEING CO.)经常抱怨说，政府补贴使得其欧洲竞争对手空中客车(Airbus)获得了有失公允的竞争优势。但是，未来几年对空中客车最大的财政支持或许来自空中客车自己的巨无霸级新产品──A380双层超大型喷气式客机。目前，这种飞机已投入生产。
如果A380能在市场上获得成功，那么空中客车所承诺的丰厚利润前景或许能提振其母公司、法德合资的European Aeronautic Defence & Space Co.(EADS)的股价。后者持有空中客车80%的股份。
作为世界上最大型的喷气式客机，A380还面临著很多严峻的考验。几周后，A380就将作第一次试飞，2006年上半年，新加坡航空(Singapore Airlines)将率先把它投入商业飞行。
A380还将面对安全性和认证方面的考验，这容不得空中客车有任何闪失。不过，美国和欧盟昨天签署了一份协议，旨在缓和围绕空中客车补贴问题的外交纠纷，这似乎意味著这个问题眼下不必太担心。
就在空中客车在其总部所在地法国图卢兹为推出首架A380准备庆祝活动的时候，投资者则在考虑EADS的股价从这项投入了120多亿美元巨资的项目里所能获得的升值潜力。
空中客车透露，EADS大约有34%的股票在市场上流通，主要是在巴黎和法兰克福市场。约有20%的公众流通股在美国机构投资者手中。
该股周二在巴黎股市收于22.42欧元（合29.35美元），略高于前收盘的22.29欧元。2004年，该股上涨了13.5%。
美国Hansberger Global Investors Inc.投资组合经理、多年来一直跟踪航空类股的马祖洛斯(Robert Mazuelos)预计，A380将显著提升空中客车的盈利水平。Hansberger持有100多万股EADS的股票。马祖洛斯相信，这些股票将给他们带来可观的回报。
面对A380的横空出世，波音当然知道接下来会发生什么。其波音747宽体客机曾经作为最大型的客机垄断世界高端民航市场近30年。这让波音赚取了丰厚的利润，它可以用这些利润开发其他的产品，并用于贴补其承受激烈竞争的小型客机。
A380客机的座位数比波音747多30%；英国BAE Systems PLC首席执行长特纳(Mike Turner)最近在接受采访时说，它对于空中客车就和747对于波音一样具有重要意义。BAE持有空中客车20%的股份。
目前，空中客车握有149架已确定或已宣布的A380订单，最近一笔订单是美国联合包裹公司(United Parcel Service Inc.)周一宣布的10架A380型货机订单。如果算上客户拥有的追加采购选择权，A380的总订单数将超过200架。
空中客车说，如果有朝一日A380的交货量达到250架，那么它自己在该项目上的大约50亿美元投资隐含的财务风险将被消化。A380项目的其他开发资金来自供应商和欧洲国家政府的投入。
空中客车预计，未来20年，全球市场对巨型飞机的需求将达到1,500架；而A380将拿下半壁江山。波音预计的市场规模要小得多，它认为乘客都希望能一站直达，尽量避免转机，而要达到一些小城市，乘A380航班肯定难以直达。但空中客车反驳说，巨型飞机的需求确实存在，并且还将扩大，因为许多机场和航线上充斥了太多的小飞机，从搭载人数和飞行距离这两个角度考虑都需要更大型的飞机，特别是在亚洲地区更是如此。
空中客车称，A380的销售好于计划。目前，A380的产品报价大约为2.80亿美元，但航空公司通常能获得一定折扣。只要制造商无需打太多折扣，大型喷气式飞机的利润率通常高于小飞机。BAE的特纳表示，A380现在的售价好于2000年初研制计划刚启动时的情形。EADS和BAE预计A380的内部回报率超过20%。
上个月，EADS警告称，未来几年A380的开发预算可能超支14.5亿欧元，超支幅度12%左右。但空中客车的管理层称，如果A380的生产成本没有问题，这样的超支不难消化。
“盈利的主要推动力是经常性生产成本，”空中客车首席执行长诺尔?佛盖尔德(Noel Forgeard)在最近接受采访时表示。
虽然555个座位的大型喷气式飞机绝非电视机或跑步鞋等大众市场商品，但基本的制造经济规律是相似的：如果空中客车的A380生产成本低于销售价格，就能盈利。由于A380的生产非常复杂，降低制造成本是一个很大的挑战。
该项目的首席工程师查尔斯?钱比恩(Charles Champion)在最近接受采访时表示，第一批10架A380飞机的生产快于原定计划，但仍有很多问题有待解决。他说，至少要在完成100架A380的生产后，实际生产成本才能浮出水面，估计这个时间应该在2008年。
“空中客车在所有项目中都非常注重提高制造效率，”2001年前曾担任空中客车首席财务长达十年之久的伊恩?麦斯(Ian Massey)表示。麦斯目前是投资公司Republic Financial Corp.的执行副总裁。
不过，空中客车和EADS面临的挑战可能会打击投资者对EADS股票的兴趣。在巴黎、法兰克福和马德里上市的该股2004年上涨13.5%，涨幅低于波音的22.9%和道琼斯全球航天分类指数的17.7%。
艾奥瓦州Principal Financial Group的高级固定收益分析师萨沙?堪姆普(Sasha Kemper)对A380能否获得足够的订单以确保空中客车实现预期的回报率目标、而不仅仅只是做到盈亏平衡感到怀疑。
A380庞大的运载能力可能会损害航空公司的利润，高盛驻伦敦的股票分析师克里斯?罗根(Chris Logan)和胡果?斯考特-盖尔(Hugo Scott-Gall)在最近的报告中警告称。他们说，A380将威胁到航空公司的定价力，特别是在利润丰厚的亚洲航线上。如果A380损及航空公司的利润，此种飞机的市场需求自然会锐减。
更为近在眼前的风险是，空中客车未来几年将承受欧元升值带来的巨大压力，Royal London Asset Management Ltd.驻伦敦的欧洲股市高级基金经理凯文?利莱(Kevin Lilley)表示。空中客车正在通过增加购买美元计价的零部件，减轻欧元升值的压力。
利莱表示，由于EADS承受欧元兑美元汇率的风险，他的基金一年前都抛售了价值1,000万美元的EADS股票，并有相当的盈利。他虽然对EADS承受的汇率风险感到担忧，但仍然相信A380是空中客车具有战略意义的一次重大胜利，将成为对抗波音的一张王牌。
