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Highlights from Airbus Press Conference at Farnborough

21 July 2004

Speaking to a packed audience of international media, Noel Forgeard, President and Chief Operating Officer of Airbus, gave a snapshot of the current situation of Airbus and insights of his plans for the future.

“Two years ago, the industry was in recession, our customers were suffering badly and the outlook was generally bleak. Today, we see the end of the tunnel and growth is at last resuming.

Over the last year, traffic growth reached seven per cent and will reach 10 per cent if the trend continues. Even more importantly, airlines have begun to increase their fares and the yields have started to improve,” said Noel Forgeard.

In the first half of this year, Airbus booked 104 new orders and received four cancellations, giving it a market share of 58 per cent, generating a revenue of some USD 7.1 billion and representing a 55 per cent market share in terms of value.

The A320 Family remains the leading product in its category with a 61 per cent market share and a strong presence among the low cost operators. “The A320 Family has now become the leading product for this market segment,” said Noel Forgeard, who invited the audience to watch out for announcements during the show.

The Airbus long-range family is also in the lead with 12 orders representing 80 per cent of their market since the beginning of the year. The A340-500 has opened up new horizons with its non-stop flights Singapore-New York and back.

Noel Forgeard emphasised its unequalled level of operational commonality and reliability. “In three months, not a single engine diversion has been registered for the A340 Family whereas our competitor suffered six of them,” he said.

He also stressed his confidence that Airbus would gain another A380 customer before the end of the year.

In the first six months of 2004, Airbus has delivered 161 aircraft including 117 single-aisle and 44 long-range aircraft. ""This is the highest half-year rate of delivery we have ever had for the wide-body long-range family,"" said Noel Forgeard.

“Airlines are now keen to take delivery of ordered planes and some even want earlier deliveries. So I can confirm that we plan to deliver more aircraft this year than last year and more than we initially planned,” he stated.

“We are planning higher deliveries for next year and increasing our production rates accordingly. Single-aisle deliveries will go from rate 20 to 30 in the first half of 2006 and the A330/A340 production line will go from six to eight by the spring of next year,” said Noel Forgeard.

Airbus’ technological staying power is what makes the company so successful, its sustained and tireless effort to investigate, prove and introduce the latest technologies that deliver solid benefits to customers. “Our progress is continuous and quiet but effective and reliable,” explained Noel Forgeard, inviting the audience to discover Airbus’ use of technology in a series of briefings taking place in the chalet.

On the A380 programme, Noel Forgeard said that “we are on schedule for a first flight early next year. The business case is fully on track. We are on target to meet our guarantees to customers and to put an end to dubious figures floating around, I confirm that the maximum weight empty of the A380 is less than two per cent above our internal target, less than one per cent of the maximum take off weight”. Later he clarified that this was only 0.1 to 0.2 different from our computerised predictions.

“We spend more on R and D than any other manufacturer. Over the past years, in addition to the development costs of the A380, we have spent some 200 million euros in research and development. We do this because we know we owe our success on the market to our technological staying power,” said Noel Forgeard.

“Three drivers, A380 deliveries, 1.5 billion euros cost savings and our hedging portfolio make us look at the future with great confidence,” said Noel Forgeard.

In addition, the increased volume of deliveries opens room for more financial ease and the ramping down of engineering resources dedicated to the A380 will free such resources or other purposes. “We feel no market pressure but we stay vigilant and ready to act pragmatically to take advantage of any market opportunity,” stated Noel Forgeard.

Later in response to questions about Airbus’ answer to the 7E7, he explained that the A330 was firmly established as the leader in that category and that the 7E7 was simply Boeing’s reaction to its success. “And we don’t need to react to a reaction,” he concluded.