Airbus is the product of several historical forces: the desire of European governments to create an aerospace and defence manufacturer large enough to compete with major American firms; the consolidation of the sector following the dissolution of the Soviet Union and the ensuing "peace dividend", which raised concerns that companies could be acquired by non-European firms; and efforts to privatise state-owned companies.
The company traces its origins to the formation of the Airbus Industrie GIE, a consortium of European aerospace companies established in 1970 to produce a wide-body aircraft to compete with American-built airliners. France's state-owned Aérospatiale owned 37.9% of Airbus Industrie, West Germany's Deutsche Airbus also owned 37.9%, British Aerospace held 20%, and Spain's largely state-owned CASA owned 4.2%.
In 2000, the European Aeronautic Defence and Space Company (EADS) was established through the merger of Aérospatiale and Matra of France, DASA (the successor to Deutsche Airbus) of Germany, and CASA. EADS held 100% of Eurocopter S.A., established in 1992 and later renamed Airbus Helicopters, along with 80% of Airbus Industrie GIE, which was quickly reorganised as Airbus S.A.S., a simplified joint-stock company. In 2006, EADS acquired the remaining 20% of Airbus S.A.S. from BAE Systems (the successor of British Aerospace). EADS was renamed Airbus Group N.V. in 2014 and Airbus Group S.E. in 2015.
Airbus S.A.S. and Airbus Group S.E. were merged in January 2017, and in April 2017 the combined entity adopted the name Airbus SE. Since then, Airbus SE has owned the commercial aircraft manufacturing operations while also serving as the parent company of the other two divisions, Airbus Defence and Space and Airbus Helicopters.
1970–2000: Airbus Industrie GIE
Airbus Industrie originated from a collaborative effort among European aviation firms to compete with American manufacturers such as Boeing, McDonnell Douglas, and Lockheed.
Although many European aircraft were technically innovative, even the most successful models had relatively small production runs. Several factors favoured the dominance of American manufacturers, including the large domestic market in the United States—which made air transport commercially viable on a broad scale—a 1942 Anglo-American agreement assigning transport aircraft production to the U.S., and the postwar legacy of "a profitable, vigorous, powerful and structured aeronautical industry" in America.
By the mid-1960s, several European aircraft manufacturers had proposed designs for large-capacity jetliners, but none had proceeded to production due to the financial risks involved. European governments and aerospace firms increasingly recognised that collaboration would be essential to compete with American manufacturers. The Airbus program formally took shape in 1965, when France and West Germany began discussions on a joint effort to develop a high-capacity, short-haul transport. At that year's Paris Air Show, major European airlines outlined their requirements for a new "Airbus" capable of carrying 100 or more passengers over short to medium ranges at low cost. The word airbus at this point was a generic aviation term for a larger commercial aircraft, and was considered acceptable in multiple languages, including French.Senguttuvan, P. S. Fundamentals of Air Transport Management. "Excel Books India", 2006. . pp. 33–34.
Later that year, Hawker Siddeley—encouraged by the British government—teamed with Breguet Aviation and Nord Aviation of France to study potential designs, producing the HBN 100 concept, a wide-body, twin-engine, 260-seat aircraft that became the foundation of the project. In 1966, officials announced that Sud Aviation of France, Arge Airbus (a group of West German aerospace firms), and Hawker Siddeley would jointly study the development of a 300-seat airliner for the short-haul sector. Rolls-Royce of the UK would be tasked with developing the engines. The partners submitted a joint funding request in October 1966, and on 25 July 1967, the three governments agreed to proceed with design studies. Following this agreement, Roger Béteille was appointed technical director for the project.
The initial 300-seat concept, dubbed the Airbus A300, attracted only limited airline interest, in large part because the Rolls-Royce RB207 engine intended for the aircraft was still in early development and represented a major risk. The RB207 had already suffered difficulties and delays, since Rolls-Royce was concentrating its efforts on the development of the RB211 for the Lockheed L-1011. Further exacerbating problems, Rolls-Royce entered bankruptcy in 1971.
To make the project more viable, the partners scaled the design down to a 250-seat version initially called the A250, later becoming the A300B, an airliner which could use existing engines like the RB211, General Electric CF6 or Pratt & Whitney JT9D. This dramatically reduced development costs, as development of the RB207 represented a large proportion of the costs.
The memorandum of understanding between the three governments required that 75 orders be secured by 31 July 1968, but only 15 would be sold by the aircraft's first flight, raising serious doubts among the partners. The French government considered withdrawing over concerns about financing the A300 alongside the Concorde and Dassault Mercure, but was persuaded by Béteille and Henri Ziegler in 1969 to remain committed. The British government, meanwhile, questioned the project's viability, feared it would not recover its investment, and was frustrated by the abandonment of the RB207 engine; it formally withdrew on 10 April 1969.Simons, Graham. The Airbus A380: A History. "Pen and Sword", 2014. , pp. 37–40.
In response, West Germany offered to contribute up to 50% of the project's costs if France matched the contribution, which it did."Trouble and strife (1968–1969)." Airbus, Retrieved: 28 February 2016. Hawker Siddeley's managing director, Arnold Alexander Hall, decided the company would remain involved as a preferred sub-contractor, ultimately investing £35 million of its own funds, along with an additional £35 million loan from the West German government.
Airbus Industrie was formally established as a groupement d'intérêt économique (GIE; ) on 18 December 1970. The consortium, founded under French law, pooled the resources of the partner companies while allowing them to retain commercial independence. It was founded as a 50-50 partnership between West Germany's Deutsche Airbus—a joint venture in which MBB held a 65% stake and VFW-Fokker 35%—and France's state-owned Aérospatiale—formed from the merger of Nord and Sud Aviation. In October 1971, Spain's Construcciones Aeronáuticas S.A. (CASA) joined the consortium with a 4.2% share, reducing the holdings of Aérospatiale and Deutsche Airbus to 47.9% each. In January 1979, British Aerospace, which had absorbed Hawker Siddeley in 1977, joined Airbus Industrie as a full partner with a 20% share. The majority shareholders each reduced their stakes to 37.9%, while CASA retained its 4.2%.
Béteille devised a division of labour that would define Airbus production for decades: Aérospatiale would build the cockpit, flight controls, and lower centre fuselage; Hawker Siddeley—whose Trident aircraft had impressed Béteille—would produce the wings; MBB would construct the fuselage sections; VFW-Fokker would manufacture the flaps and spoilers in the Netherlands, and CASA would make the horizontal tailplane. Each firm was responsible for delivering its sections as fully equipped, ready-to-fly components.
The Airbus A300 made its maiden flight in 1972, and the first production model, the A300B2, entered service with Air France in 1974. Its debut was overshadowed by the contemporaneous launch of the supersonic Concorde, and initial sales were slow, with most orders coming from European flag carriers—such as Air France and Lufthansa—that were expected to support domestic industry.Bowen, John T. The Economic Geography of Air Transportation: Space, Time, and the Freedom of the Sky. "Business & Economics", 2010. , pp. 49–53."Champagne ... and drought (1973–1977)." Airbus, Retrieved: 28 February 2016.
Under chief executive Bernard Lathière, Airbus adopted a more aggressive sales strategy aimed at airlines in the United States and Asia. However, between December 1975 and May 1977 no new orders were placed, several completed aircraft remained unsold in Toulouse, and production slowed to half an aircraft per month. At the time, some government officials even proposed ending the program.
The A300's initial market appeal was limited: it was too large for most short-haul routes yet restricted from long-haul operations because twin-engine aircraft were not then permitted to fly extended over-water routes. The situation changed with the introduction of Extended-range Twin-engine Operations Performance Standards (ETOPS). In 1976, the International Civil Aviation Organization authorised the A300 to fly routes up to 90 minutes from a diversion airport on one engine, enabling operations across the North Atlantic, the Bay of Bengal, and the Indian Ocean. In 1985, the U.S. Federal Aviation Administration extended this limit to 120 minutes.
These regulatory changes transformed the A300 into a lighter and more economical alternative to three-engined wide-body jets, leading to renewed airline interest and a sharp rise in sales.
In 1977, US carrier Eastern Air Lines leased four A300s as an in-service trial. CEO Frank Borman was impressed that the A300 consumed 30% less fuel, even less than expected, than Eastern's fleet of L-1011s. Borman proceeded to order 23 A300s to replace the airline's aging DC-9s and 727-100s, becoming the first U.S. customer for the type. The Eastern Air Lines breakthrough was shortly followed by an order from Pan Am. From then on, the A300 family sold well, eventually reaching a total of 561 delivered aircraft.
In 1978, Airbus launched the A310, a shrink of the A300 that also added new technologies. The introduction of the A320 in 1987 established Airbus as a major global manufacturer, with more than 400 orders before its first flight.
In June 1997, John Weston, managing director of the defence division of British Aerospace (BAe), commented, "Europe ... is supporting three times the number of contractors on less than half the budget of the U.S." That reality prompted European governments to seek the merger of their defence manufacturers into a single entity.
As early as 1995, DaimlerChrysler Aerospace (DASA), which had already consolidated most of Germany's aerospace and defence companies, and BAe, were reportedly eager to create a transnational company. The two companies also envisioned including the French company Aérospatiale—the other major European aerospace company—but only after its privatisation. One of the sticking points for the merger was the perceived need to transform Airbus Industrie from a consortium into a standalone company. Aérospatiale was vehemently opposed to this move, as a combined BAe/DASA would hold 57.9% of the new company, giving it effective control.