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June16,1999

Chief of New Aerospatiale Matra Gives Mixed Reports on Airbus and the Industry

By Rebecca Rayko, Editor

Le BOURGET - With the state of the European aerospace industry in somewhat of a flux and Aerospatiale Matra still fresh from a recent privatization, many pointed questions were fired at chairman Yves Michot here at the Paris Air Show this week.

Foremost on the minds of media members gathered to hear Michot's comments was the status of the Airbus Industrie single corporate entity integration.

Michot strongly agreed that all partners felt that improved efficiency was sorely needed within Airbus. However, fixing the problems inside the four-member consortium goes far beyond the need to solve the legal status of the company, Michot said.

"You can't just change the legal status of the company and solve the problems of concern," Michot said. "We could do that tomorrow," he said of applying the single corporate entity status label. Rather, the consortium members should be most concerned with practical industrial improvements.

He cited the launch of the Airbus A318 program as an example of the consortium members working efficiently. The A318 launch was the first program to launch with all of the conditions defined, and that this only took one month to do.

"We must continue on in this vein," Michot said.

Michot also downplayed concerns of the DaimlerChrysler/CASA merger, saying this development would have no major affect on Airbus affairs.

"The merger of Dasa and CASA is within the trend of consolidation and won't destabilize the European landscape," said Michot, who similarly praised the British Aerospace-Marconi merger.

But the sense of discord among the European aerospace players was still evident, despite Michot's words to the contrary. Michot said he didn't know why Dasa chief Michael Biscoff chose not to come to Paris at the last minute, saying only that "Biscoff told me to replace him - I can't comment on his actions."

He similarly had no answer as to why the Spanish government chose Dasa over Aerospatiale as a partner, although most are of the opinion that public sector interest in the French aerospace industry are still of concern to the rest of Europe.

When asked whether he foresees consolidation only among European aerospace companies or among companies from both Europe and the US, Michot said cooperation is more natural among fellow European companies, and that a solid basis of common ground must exist before Europe-US merging occurs.

"When we say more US links, we mean programs. US regulations have increased, not decreased, over the last few months, so it's hard for the US and European companies to merge," Michot said. "We are used to merging in Europe."

On a different note, Michot said the development of a regional jet is still a possibility for Aerospatiale. The company is still looking for partners : "We won't launch one today on our own."

Aerospatiale has restructured its turboprop activity for sustainable profit levels, so they don't have to launch a regional jet "at all costs," Michot said.

"We would still like to launch a regional jet," said Michot, "but time will tell."



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