Airbus is spending tens of millions on Brexit preparations, CEO says

Key Points
  • Airbus reported stronger-than-anticipated fourth-quarter earnings on Thursday.
  • Shares rose sharply as the firm also projected higher aircraft deliveries and profits in 2019.
  • Earnings were overshadowed by confirmation that the A380 superjumbo program will end in 2021.
Brexit costs in the double-digit millions and rising, Airbus CEO says
Brexit costs in the double-digit millions and rising, Airbus CEO says

The outgoing CEO of European plane maker Airbus has said the firm is continuing to spend millions to prepare for the effects of Britain's exit from the European Union.

Airbus shares are soaring after the aerospace firm revealed stronger-than-anticipated fourth-quarter earnings on Thursday, projected higher profits for 2019 and announced it will end production of its A380 jet after years of poor sales.

Every wing on Airbus commercial aircraft is designed and manufactured in the UK. The wider firm generates £6 billion ($7.7 billion) of turnover in the UK and has more than 14,000 employees.

Speaking to CNBC on Thursday Tom Enders, CEO of Airbus refused to divulge the exact cost of Brexit preparations but admitted it was in the tens of millions.

"It is a significant double-digit million amount of money and certainly rising, so this not peanuts," Enders said.

Airbus has previously said it spends in excess of £5 billion across more than 4,000 U.K. suppliers. Enders told CNBC on Thursday that the firm was upping its inventory to get past any Brexit "turmoil."

The CEO added that while it didn't make current economic sense to relocate out of the U.K., Brexit could impact future operations.

"The questions is as we launch new programs down the road, would we find that the UK is still the right place?"

End of the A380 

Ending A380 production a ‘painful’ decision that had to be made, Airbus CEO says
Ending A380 production a ‘painful’ decision that had to be made, Airbus CEO says

On Thursday, the European plane maker Airbus announced an end to its A380 superjumbo program, just 12 years after it first took to the skies.

Enders described the move as a "painful decision that we had to take" adding it was clear that the superjumbo was not able to make money in the current aviation market.

The CEO said the organization would continue to innovate and that there could be a boost to new programs from the shift in resources.

In April this year, Enders is set to be replaced as Airbus CEO by the president of the company's commercial aircraft business, Guillaume Faury.

Airbus reported full year sales of 63.7 billion euros ($71.8) for 2018, a 7.7 percent year-on-year rise.

In 2018, net commercial aircraft orders totaled 747, sharply down from the 1,109 aircraft booked in 2017

At year-end, Airbus's order backlog stood at a record 7,577 commercial aircraft