February 15, 2018 / 5:20 PM / 6 days ago

Airbus CEO says still in charge, pledges smooth transition

PARIS (Reuters) - Airbus Chief Executive Tom Enders reminded investors on Thursday that he still holds the reins of Europe’s largest aerospace company, as media and industry speculation swirled over a successor more than a year before he is due to step down.

Enders announced in December he would not seek a new mandate when his term expires in 2019, abandoning previous signs to the contrary, following a succession battle with his no.2 Fabrice Bregier, the 56-year-old planemaking and operational chief who is due to leave when his contract expires next week.

Announcing higher than expected full-year profits, led by demand for passenger jets, Enders sought to address concerns about continuity as a raft of industrial executives prepare to leave or retire.

Enders said he had been entrusted by the board with ensuring a smooth transition to a new generation of leaders and noted Guillaume Faury, 49, was already tackling engine delays as incoming planemaking chief and former Rolls-Royce executive Eric Schulz had “hit the ground running” as sales chief.

But Enders was less willing to be drawn on his own succession, saying only that internal and external candidates would be considered and it was a matter for the board.

When one analyst expressed regret during a conference call that he was leaving, Enders interjected to say, “I am still here”.

The succession battle is expected to be more muted after a December showdown between Enders and Bregier, but refuses to die down completely as the group seeks to regenerate itself.

Frenchman Bregier, 56, had long been expected to replace German-born Enders until the board approved the staggered departure of both executives, whose feud reached boiling point when Enders removed sales from Bregier’s control last summer.

While that settled who would not take over, it left open who would succeed Enders in 2019. Although Airbus officials insist that should not be an issue until later this year, multiple industry sources call it a potential distraction.

INTERNAL CANDIDATES

The main internal candidate is Guillaume Faury, the former helicopter unit chief who steps into Bregier’s shoes next week.

Insiders say he is not the only internal contender, however, with defence boss Dirk Hoke, 48, also in the ascendant, subject to the stability of the delayed A400M military project, which took another 1.3 billion euros of charges in 2017.

Also emerging as a potential candidate, according to two industry sources, is Harald Wilhelm, who has overseen a rise in Airbus shares to record levels since becoming finance chief in 2012.

Wilhelm, 51, is among the few who bridged the rift between Enders and Bregier and worked smoothly with both.

The board is expected to examine fresh blood such as Thales CEO Patrice Caine, two other industry sources said.

Le Figaro newspaper reported on Thursday former Air France-KLM chief Alexandre de Juniac, currently head of the International Air Transport Association, could be a candidate.

None of the individuals cited could be reached for comment.

An Airbus spokesman said: “We don’t engage in any such speculation and have no comment.”

Enders has acknowledged his time is limited but told staff in January he would remain fully focused on strategic initiatives such as digitalisation.

Some analysts warn the year-long transition may however put pressure on Enders to demonstrate he is more than a caretaker, as the group faces industrial and commercial challenges.

“It is a concern; not that he would abandon his duties, but you need someone with the authority to be able to negotiate with politicians, suppliers and customers,” said analyst Richard Aboulafia, a veteran Airbus watcher at U.S.-based Teal Group.

“In this career-sunset phase there are concerns about being a lame duck and that can weaken your position,” he added.

Additional reporting by Sabine Siebold and Andrea Shalal; Editing by David Holmes

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