THE AIRBUS A-380 - REVEALED

UNCLAS SECTION 01 OF 02 PARIS 000372

SIPDIS

SENSITIVE

STATE FOR EUR/WE, EUR/ERA, EB/TPP
STATE PASS TO USTR (VERONEAU, NOVELLI, SANFORD)
COMMERCE FOR ALDONAS
COMMERCE FOR ITA FRED ELLIOTT

E.O. 12958: N/A
TAGS: EAIR ETRD FR WTRO USTR
SUBJECT: THE AIRBUS A-380 - REVEALED

REF: 04 PARIS 9014


1. (SBU) SUMMARY. Airbus hosted a lavish "A-380 Reveal"
ceremony in Toulouse January 18 before 5000 invited guests,
including French President Chirac, British PM Blair, German
Chancellor Schroeder and Spanish Prime Minister Zapatero.
The unveiling of the first fully-functional A380 superjumbo
took place with Olympics-opening fanfare, and constituted a
"celebration" of European industrial policy and innovation.
Chancellor Schroeder made the only clear references to
Boeing/Airbus, admonishing the European Commission to keep
"Europe's interests" in mind when negotiating with the U.S.
-- a seeming reference to Europe's need to preserve its
ability to launch future publicly-funded initiatives such as
Airbus. Airbus highlighted its global company image during
the ceremony, featuring multimedia promotions and foreign
airline testimonials heavy in English. Airbus cites 145
existing orders for the A-380, with 250 needed to break even,
and claims that 700-750 orders are achievable over time. A
major Chinese order is expected imminently. Both the guest
list and reception buffet were international in flavor.
Senior executives from FEDEX (Fred Smith),UPS, Goodrich,
General Electric and a host of other U.S. suppliers and
customers were present. END SUMMARY.


2. (U) Airbus Industries hosted a major event at its
Toulouse, France production site January 18 to showcase the
new A380 superjumbo jet. The event, heralded as the &A380
Reveal8, attracted 5000 guests from around the world,
including French President Chirac, British Prime Minister
Blair, German Chancellor Gerhard Schroeder and Spanish Prime
Minister Juan Luis Zapatero. CEOs of major customer airlines
(Emirates, Singapore Air, Air France, KAL, Fedex, UPS,
Virgin, Malaysian, Thai and others) were featured invitees.
Economic and Commercial Minister-Counselors represented the
Embassy, along with the just-arrived American Presence Post
(APP) Toulouse Consul. Technical level FAA representatives
participated from Washington.


3. (SBU) The well-organized ceremony resembled a combination
of Olympics opening and heavyweight prize fight. The
multimedia show featured an animated Merlinesque figure
lauding man,s capacity to innovate, and cloud-walking
dancers reminiscent of the Athens Olympics opening ceremony.
Airbus President Noel Forgeard led the four heads of
state/government onto the stage like heavyweight
prizefighters. Airbus highlighted its global company image
during the ceremony, featuring multimedia promotions and
foreign airline testimonials heavy in English (including Air
France CEO Spinetta). Both the guest list and reception
buffet were international in flavor.


4. (SBU) Airbus CEO Forgeard and the four European leaders
played up the &celebration8 of European industrial policy,
cooperation and innovation. British PM Blair was careful to
replace &European8 with &British and European8 in his
praise for the various contributions to the A380. Chancellor
Schroeder made the most substantive presentation, noting that
the A380 was indicative of what &Old Europe8 can
accomplish. He took the opportunity to signal his support
for broadening the participation of other European countries,
including possibly Russia, in the ownership of Airbus,
parent company EADS. (Comment. Germany may find attractive
the prospect of diluting French influence in EADS and
Airbus.) Schroeder was also the only speaker to highlight
the Boeing/Airbus dispute, admonishing European Commission
negotiators to keep "Europe's interests" in mind when
negotiating with the U.S. -- a seeming reference to
preserving Europe,s ability to launch future publicly-funded
initiatives such as Airbus.


5. (SBU) The recent tussle over the leadership of EADS (see
reftel) was in evidence. (France has recently announced that
Airbus CEO Forgeard will replace Philippe Camus as French
co-chair of EADS later this year. That decision came after
some resistance from Camus-supporter Arnaud Lagardere, whose
Lagardere group controls 15 percent of EADS.) Both Forgeard
and President Chirac heaped lavish praise on the late Jean
Luc Lagardere, one of the driving forces behind the creation
of Airbus, while paying scant attention to his successor, son
Arnaud. EADS co-chair Philippe Camus was virtually invisible
during the ceremonies and Daimler-Chrysler CEO Jurgen
Schrempp did not even attend, although EADS German co-chair
Manfred Bischoff spoke at the event. (Comment.
Daimler-Chrysler holds 30 percent of EADS and has reportedly
been unhappy with reports that Forgeard and Chirac support
scrapping the EADS French/German co-chair structure for a
single, preferably French, CEO.)


6. (SBU) While the Airbus President and the four European
leaders heralded the A380 project as a European success and
the product of European cooperation, the European Commission
played no visible role in the festivities. The four major
participating countries and their global customers were the
stars of the event.


7. (SBU) With 145 orders in hand, Airbus claims that it is in
sight of the 250 aircraft reportedly needed to make the A380
venture profitable. Airbus executives are increasingly using
a target number of 700-750 aircraft for eventual sales. The
first flight of the A380 should take place in late March or
early April, and officials hope to showcase the aircraft at
the June 2005 Paris Air Show. Singapore Airlines will be the
launch customer, with first commercial flights planned for
early 2006. Reports were circulating in Toulouse yesterday
that a major Chinese A380 order could be announced in the
next week.


8. (SBU) COMMENT. The Airbus A380 superjumbo has yet to take
flight, let alone fire up its (hopefully GE) engines and taxi
out of its hangar. Yet, with 145 orders to date, European
leaders are ready to cite it as a success for European
cooperation and European industrial policy. Airbus is also
at pains to highlight its global company identity, citing its
worldwide customer base, global supply chain, and
85-nationality-strong labor force. Time will tell, however,
how much of a success the A380 will become. Development and
production costs continue to rise, and the eventual market
size for the superjumbo remains undetermined. Nonetheless,
for the moment, European leaders are content to promote the
A380 as the poster child for European industrial cooperation.
END COMMENT.

Wolff