As Airbus’s chief executive Louis Gallois prepares to reveal the first details of the Power8 cost-cutting programme that aims to cut 2 billion of costs a year, there is growing optimism among industry experts that it will achieve the necessary results. Analysts are encouraged by the momentum displayed by the programme launched by Christian Streiff immediately before his sudden departure in October.
The plan was greeted with a certain degree of scepticism at the time, in part because of the disappointing results of Airbus’s previous cost-cutting programme, Route06, which did not live up to the estimated 1.5 billion in cost-savings.
It is not just the effects of the devastating delays to the A380 programme that Airbus needs to offset. It is still facing the challenge of a weak US dollar, an issue unlikely to trouble its US-based competitor.
But analysts are now confident that the company is making a major step in the right direction by focusing on the important initial stages of Power8: winning the support of the unions, which is not likely to be easy, given the nervous reaction of suppliers to the possibility of changes in production strategy, and sorting out the complex split of assembly work between Hamburg and Toulouse.
One analyst points out that the issue of site closures, which will be inevitable if Airbus is to get back on track, will have to be dealt with later on because of the political sensitivities involved.
The new year is sure to bring plenty of hurdles for Airbus, but the news that Power8 is moving forward may be a sign that things are looking up, even if its implementation is likely to be traumatic.