EADS has posted a robust set of third-quarter financials, with its Airbus, Eurocopter and Astrium divisions more than offsetting the lagging Cassidian military unit. Most encouragingly, profitability is continuing an upswing that should carry it from woefully poor to acceptable, if not eventually good, especially given projections for strong civil market growth.
But while the overall picture is bright, there are some dark shadows to exercise management minds.
As the results were being given their final once-over, German prosecutors raided EADS offices for evidence of alleged bribery related to the sale of Eurofighter Typhoons to Austria. Such may be the hazards of trading in weapons and nothing may come of the investigation, but coming only weeks after a plan to merge with BAE Systems was scrapped it highlights EADS's challenge in defence. EADS says there will be no major acquisitions or mergers soon and dismissed talk of a strategic review, but there is simply no cause to expect that Cassidian as it is will grow to become a serious defence player.
EADS could, of course, abandon its vision of creating a strong defence business, and rely on Airbus to carry the company. But as is also shown by the latest numbers - including a ferocious rate of cash burn to fuel airliner programmes - aerospace is a volatile and expensive business. Anybody who assumes the civil side will always carry the day is dreaming.
(This first appeared as a leader in 13 November Flight International)
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