Airbus Cooked
By Ambrose Evans- Pritchard
The Telegraph, London Monday, November 27, 2006 http://www.gata.org/node/4538 "..................My hunch is that Airbus will bring matters to a head. I was told by an Airbus official last year that if the euro exchange rate went above $1.30 for long, the company was "cooked". He said the chances of this happening were almost nil. Well, "nil" may be here. While Airbus has an order backlog of 2,177 aircraft worth $220.3bn, these delivery contracts are in dollars while costs are in euros. "This is the nub of the problem," said Louis Gallois, the Airbus chief. In 2004, the group was shielded by currency hedges at an average rate of $0.98. This year the rate is $1.12, and the hedges are expiring fast. Soon Airbus will face the full violence of the spot market. The aerospace champion is so deeply tied up with Europe's sense of industrial self-worth that it will not be sacrificed lightly on the altar of free currency flows. When the French premier vowed to do whatever it takes to save Airbus" The Euro is currently trading at around 1.33 USD. |
Frankly, they are idiots for not entering currency hedges at the same time that the orders had been placed.
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probably the real reason for the a380 delay ........
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Originally Posted by Re-Heat
(Post 3007038)
Frankly, they are idiots for not entering currency hedges at the same time that the orders had been placed.
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