Alexandra West
13 April 2017 · 3 min read

Airbus CEO says “he is not close to retirement”

Succession planning is proof that Airbus is a changed company

In a Reuters interview after the Airbus AGM yesterday CEO Tom Enders said he has no intention of retiring when his current term ends in 2019 and that “it is up to the board and shareholders to decide” if they want him to stay. Mr Enders’ comments yesterday are the first insight to what is likely to be fascinating succession planning at Airbus. It is interesting for two reasons; firstly the company’s history of the management team being chosen by the French and German governments and secondly what the future holds for Fabrice Bregier who currently runs Airbus Commercial Aircraft and has recently been appointed Chief Operating Officer of the newly integrated Airbus SE.

Airbus was previously known as EADS (European Aeronautic Defence and Space Company) and as the name suggests it was a company created by the French, German and Spanish governments. Up until 2012, the European Governments were the majority shareholders, with their share interest reducing progressively throughout the years down to 45% from an initial 70%. As of December 2011, Daimler held most of Germany’s 22.4% share, and French media giant Lagardère shared the French 22.4% with the French Government. Spain then owned a 5.5% stake with approximately 50% of shares in free float. This intricate balance of shareholdings was mirrored by EADS’ unorthodox French-German management structure, which demanded French and German co-chairmen and co-CEOs.

Mr Enders’ appointment as CEO heralded the end of this unusual arrangement. Instead the power sharing was brokered unofficially. With a German at the helm, who brought with him his German CFO, the French were placated by the appointment of Fabrice Bregier as Head of Airbus Commercial and by a French Chairman, Denis Ranque. Mr Enders then began the process of restructuring EADS’ shareholder register so that today 74% of the company is in free float, and shortly after the company was named Airbus.

Today, Airbus’ French-German parentage feels as if it is part of its heritage, rather than its driving philosophy. It undoubtedly remains a European company at its core, but is a truly global and market leading aerospace company, and its current management team is first class. So what will the board decide when faced whether to renew Mr Enders’ contract in 2019. My instinct is that they will make the decision that is in the best interests of the company, and in the middle of its largest ever production ramp up it seems to me that continuity would be the correct answer.

If Mr Enders stays though it raises the interesting question of where that leaves Fabrice Bregier. His recent promotion was seen by many in the media as confirmation that he is the ‘heir apparent’ to Mr Enders, with the assumption that he would take over in 2019, at the age of 57. However, if Mr Enders serves a further term (which would be three years since the implementation of the staggering principle in 2016) then Mr Bregier would be 61 by the time the CEO role is vacant. This is clearly not too late for him to take over, but the question is whether by 2022 an alternative successor may have emerged from the within business.

On balance though, the Airbus board and shareholders are faced with a wealth of talent when deciding who should run the company from 2019, so this is a nice problem to have. This situation is a far cry from the bureaucratic practices the EADS of old was renowned for, and I have every confidence that Airbus can flourish led by Mr Enders, Mr Bregier or even a yet to emerge contender.

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