[Quest:] Airbus has warned that its A350 program is challenging, and there's no room left in the schedule for further problems. The Airbus owners, of course, are EADS, and the parent company took a charge of more than $680 million. Two problems that they had to fix. Firstly, the A380 wings, and secondly, the development of the 350. It was the black mark on an otherwise strong earnings report: profits up 19 percent, revenue's gained 15 percent. I asked EADS chief exec Tom Enders if the lack of wiggle room on the 350 was now posing a risk to those numbers.
[Enders:] It's our policy that we are very transparent with risks in the company. Investors this is why we were very blunt about the 350 program. But this is not meant to ring any alarm bell, it's just stating the obvious, where a program of that size, of that magnitude, the technological challenges that we have in this program is inherently risky, and that is what the statement is about.
[Quest:] Fabrice Bregier told me that he was virtually personally overseeing the 350 project, at least from a to make sure it stays on track and doesn't become another fiasco a flight fiasco. I assume you're overseeing Fabrice Bregier to make sure that at some point you don't have to start answering questions about it.
[Enders:] Yes, Fabrice has been overseeing that program, has been very close to that program, since its very start in 2007. And I have to commend him on what he has achieved in terms of risk mitigation on that program, and I have every confidence in him knowing how to steer a program. We're on a good path here.
[Quest:] Look, we've got to talk about the Dreamliner. It's not your plane, of course. You've decided you I love the phrase that you were quite open and honest about you decided to go for Plan B with nickel cadmium. But you must now be also looking very closely at the certification process, because the FAA is questioning how the certification process of the 787 took place. You are about to go through the same process with the 350. It's going to be tougher.
[Enders:] Yes. You're absolutely right. The certification authorities will be more nervous about the certification also of our 350 after what they went through on the 787. So, there is no such thing as schadenfreude on our side. We watch very closely what's happening at Boeing, and we are lucky enough that on that program, we are a good two years behind Boeing so that we have the chance to activate our Plan B, which is simply to protect the entry into service. We spoke about risk just a minute ago. There are plenty of risks if you introduce a new aircraft, but those risks that you can master, that you can mitigate, I think you should, and this is exactly what we've done with our battery decision.
[Quest:] As the CEO now of the parent group, EADS I looked at the numbers. Airbus commercial revenues are twice as much as everything else combined. If you the numbers are it's what? $38 billion, and the rest comes to barely $16 billion. So, if you take that as a starting point, how much is it your priority to rebalance EADS in the future, if you can?
[Enders:] Well, I'll tell you Richard, right now I'm pretty happy with the balance or the ratio that we have. I take note that our dear competitor in Chicago nowadays is advertising its growing dependence on commercial and is playing down the defense side. So, the defense business in North America and Europe has fled. The commercial business is growing quite significantly. Not a bad position to be in, and then again, there's nothing magical about a 5050 balance of something like that. The good thing is, our defense business is rather stable. We have $12 billion revenues. That, by the way, makes us probably the second-largest if not the largest in terms of operations in Europe, European defense company. So, not a small piece of business. We have a well-sorted portfolio in areas that matches the mission requirements of our customers. I'm not unhappy about the situation we're in.
[Quest:] Tom Enders who is the chief executive of EADS. Staying in the air, the European Commission has rejected Ryanair's bid for Aer Lingus. It's the second time this has happened. The competition commissioner, Joaquin Almunia, said he had no choice. In his words, the deal would have directly harmed passengers who would have had to pay higher results as a result, in his words. Ryanair has made three bids for Aer Lingus and says the decision is manifestly unjust, describing it as politically inspired, pandering to the vested interests of the Irish government. Ryanair says it will appeal against the EU's decision. And this is the problem as it relates to Ryanair and Aer Lingus: put simply, Aer Lingus is scratching around for a market, and Ryanair is the largest passenger airline in Europe. It is becoming increasingly more difficult for Aer Lingus to fight off other than by legal means and the protection of the Irish government and, of course, the European Commission. But the Irish government wants out of Aer Lingus. Ryanair knows it only has to wait out and see its time, and Air Lingus is running short of friends. You might be tempted to say it's inevitable that Aer Lingus will eventually fall to Ryanair. Inevitable, perhaps not, but frankly, from whichever way you sit, and whichever way you look, most people in the industry say it's pretty likely. Now to tonight's Currency Conundrum. There's at least one place in the world that still uses coins made from stone for certain transactions. Is it Turkmenistan, the Federated States of Micronesia, or Cameroon. Ooh, I like thins one. The answer later in the program. Italy's bond sale boosted the euro, rising against the dollar. The yen's also higher. The pound flat. Those are the rates, this is the break.