Just as Airbus hoped to start selling its oft-delayed superjumbo as a success story, a report of "massive insider trading" at parent company EADS leaked to the media -- raising the question of whether the beleaguered company can ever get ahead of its problems.
The preliminary report by the stock market regulator, suggesting that EADS executives sold shares and exercised stock options after learning about significant delays with the A380, came less than two weeks before a glitzy ceremony marking the delivery of the first superjumbo to Singapore Airlines.
EADS CEO Louis Gallois, likening the planemaker to a recovering patient, tried to downplay the findings, which judicial officials said Wednesday had been delivered to the prosecutor's office.
Gallois said his job is to ensure that managers aren't distracted by the negative publicity and get on with the job of competing with U.S. rival Boeing and selling planes.
"We are entering the period of convalescence," he said Wednesday in a timely debate on relations behind the Franco-German consortium that runs European Aeronautic Defense & Space Co. NV. "I would prefer that they talked about us for other subjects ... but it is not me who makes the news."
EADS said in a statement it is "most surprised" by the leaked reports, which it considers "an unlawful violation of the confidentiality of the current investigations and of the principle of the presumption of innocence."
The Financial Markets Authority, or AMF, has been investigating how much executives and board members knew about profit-damaging delays with the A380 superjumbo when they sold shares or exercised stock options worth several million euros between November 2005 and March 2006.
French daily Le Figaro, which claimed to have seen the AMF's preliminary report, said the problems linked to the A380 and the mid-range A350 were raised in an EADS board meeting as early as July 2005.
The public announcement came in June 2006, sending EADS shares crashing 26 percent in one day.
Gallois, who was appointed to head Airbus after the suspected problems and who did not sell shares at the time, refused to comment on the contents of the AMF report, noting only that it is preliminary. He took over as sole EADS CEO in August in a management overhaul designed to end national rivalries.
Airbus and EADS have been seriously shaken over the past year and a half by management strife, the insider trading accusations and the strong euro, which hurts revenue from plane sales as they are priced in dollars.
Airbus' position as the world's dominant planemaker has slipped behind Boeing, and the Toulouse, France-based company is undergoing an ambitious restructuring plan that foresees thousands of job losses and sensitive factory closures.
Botched management of the flagship superjumbo program dashed Airbus' hopes of dominating the market. The world's largest plane is two years late due to wiring difficulties and communication failures between Airbus plants in Germany and France.
The first delivery of the 525-seat plane is scheduled for Oct. 15 to Singapore Airlines, the first of 14 customers who have ordered the A380.
A sneak preview is being trailed on Airbus Web site under the headline "A380 WOW!!!," with features including a virtual tour around the cabin.
Singapore Airlines CEO Chew Choon Seng will travel to Toulouse for a handover ceremony beginning with a "sound and light show," reminiscent of the triumphal 2005 ceremony when the A380 was unveiled.
The audience, which included then-French, German and British leaders Jacques Chirac, Gerhard Schroeder and Tony Blair, admired the plane's exterior but was not allowed inside, where problems lurked.
The AMF's preliminary report says the host of that ceremony, Airbus' then-head Noel Forgeard, and other top executives sold shares and exercised stock options in November 2005 and March 2006 prompted by their knowledge of the A380's difficulties, according to Le Figaro.
Forgeard and his children exercised stock options in the company at a profit of 2.5 million euros ($3.2 million) in March 2006, according to AMF filings. Forgeard has denied wrongdoing.
The AMF also says the decision by EADS shareholders Lagardere and DaimlerChrysler in March 2006 to sell stock must have been prompted by expectations it would fall, Le Figaro reported.
The news pushed shares of Lagardere down almost 6 percent to close at ??58.45 (US$82.79) in Paris and prompted Lagardere to say it will take legal action over the "unfounded accusations."