New Airbus Boss Sends Mixed Signals

Louis Gallois tried hard to please everybody Tuesday on his first day on the job as the latest executive to head the European aircraft maker Airbus.

Jean-Luc Moudenc, the mayor of Toulouse, also said he had been reassured by Gallois' comments when they discussed the potential job cuts earlier Tuesday.

Doubts have been growing over the $10 billion A350 XWB program announced by Streiff in July as a competitor to Boeing's 787 and 777 jets. Tom Enders, the German co-CEO of EADS, said last week that the group would have to decide whether it had "the financial and engineering resources" to build the plane at all.

But Gallois said he favors pressing ahead with the program. "I believe that Airbus has to be present across the whole market, and the A350 is the middle of the market," he said in his radio interview, adding that the A350's mid-size category accounts for "40 percent of the market" by value.

EADS is facing a financial crunch as a result of the A380 program's soaring costs and a weaker U.S. dollar, which affects revenue in euros because plane sales are denominated in dollar.

Gallois, who remains co-chief executive of EADS, said Tuesday that the dollar had fallen 41 percent against the euro since the A380's launch and was now "the main handicap to Airbus' competitiveness against Boeing."

But EADS has yet to feel most of the impact because of currency hedging positions, which will progressively expire in coming months and years.


Associated Press Writer Johanna Decorse in Toulouse contributed to this report.

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