If your revenue falls in the medium term by -15% in every year due to the fall of the currency your product is priced in, and your costs are predominantly in the Eurozone, then you have the recipe for some very serious corporate challenges.
This is true for anyone organisation operating under these conditions, not just Airbus.
However:
1. Airbus civil aircraft have no significant revenues outside USD
2. As the USD falls, Boeing aircraft get cheaper reducing Airbus revenue still further
3. Solutions such as outsourcing to dollarzone companies are medium and long term solutions, not short term lifelines
4. The weak USD is not likely to recover in the short term - we believe it is likely to weaken even further in 2008.
5. The USD slide has been happening for some time, but has accelerated dramatically since the first week of August 2007.
6. Airbus' EUR USD hedgeing begins to fall out in early 2008 - their transition will be sudden and painful - or possibly 'beyond the painzone'.
Airbus' turniver in 2006 was EUR26 billion . The USD slide against the EUR just this year simplistically, if unhedged, reduces revenue by around EUR4 billion. At the same time there is a short term revenue shortfall on the A380 and huge (cost) investment in the A350.
However, as noted above Airbus is currently at least partially hedged.
At the end of 2008, Airbus' primarilly unhedged EUR USD full year effect will be seen.
Last edited by flying brain; 25th Nov 2007 at 19:26.