Euro’s rise weighs on Airbus

written by australianaviation.com.au | September 29, 2009

Airbus CEO Louis Gallois told reporters at a company event that the aircraft maker is worried about the impacts of the strong Euro currency on its business.

“At the current level we are close to the limit. Beyond that it will become difficult,” said Gallois.

The strong Euro, which is now worth approximately US$1.45, has made it difficult for Airbus which sells aircraft in US dollars but pays most of its suppliers in Euros. As a result, the company has been increasingly renegotiated its supplier contracts to be priced in US dollars to relieve the cost pressures on the company.

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While the weakness of the US dollar has been challenging for European manufacturers, there has been some suggestion that it may be a boon for Boeing as its costs become effectively more competitive. However, Airbus remains ahead of Boeing in terms of net orders this year, indicating that the currency is not influencing demand in the short term.

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