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Monday, June 19, 2006

Airbus chiefs dumped shares before stock crash

EUObserver: Noel Forgeard, the French co-president of the European aerospace giant EADS, is fighting for his job after it emerged he and other directors sold shares worth millions months before share prices fell on news the Airbus A 380 jumbo jet will be delayed.

Shares in the airspace group plunged 26 per cent on Wednesday (14 June) after the company announced a six-month delay in delivering the A 380 aircraft and an estimated drop in earnings of €2 billion.

French daily Liberation writes that the EADS leaders sold their stocks in the Franco-German aerospace group already in March. Mr Forgeard's three children also sold shares.

Arnaud Lagardere, the leading French private sector shareholder in EADS, has also admitted that his group sold 7.5 per cent of the capital of EADS in April. He denied, however, that this amounted to insider trading.

He had asked Airbus boss Gustav Humbert last month whether new A 380 delays were expected and was told there was no reason to expect any problems, according to media reports.

The news has upset other main stockholders such as DaimlerChrysler however.

French former prime minister Laurent Fabius and leading MPs have demanded "immediate clarification" of "a possible insider crime" and the president of the organisation for minor share owners has also called for an inquiry.

It was a big moment for Europe when the world's biggest passenger plane, Airbus' A 380 double-decker jumbo, successfully completed its first test-flight in April.

But the current chaos has raised questions about the European company's management and its general strategy of producing super jumbos while rival US company Boeing bets heavily on smaller and more fuel-efficient aircraft.

Singapore Airlines, one of the biggest A 380 clients, said it was unhappy with the delays and has demanded compensation. It also announced it would buy 20 aircraft from Boeing while taking options on another 20 planes.

EADS is the major partner in the Eurofighter consortium, the prime contractor for the Ariane launcher, develops the A 400M military transport aircraft and is the largest industrial partner for the European satellite navigation system Galileo.
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