Airbus Demands Compensation To Acquire Spirit Operations: Report

Author: Shivani Kumaresan | May 03, 2024 07:26am

Airbus SE (OTC:EADSY) has reportedly expressed the need for financial compensation to absorb loss-making operations from Spirit AeroSystems Holdings Inc (NYSE:SPR), creating a hurdle in the discussions with Boeing Co (NYSE:BA). 

This demand, emerging as a key obstacle, is likely to complicate negotiations between the two aerospace giants.

Executives from Spirit and Airbus are engaged in discussions in New York, aiming to resolve issues including financial compensation for Airbus to assume the burden of Spirit’s loss-making operations, reported Reuters. 

The complexity of untangling their ties with Spirit has led both Airbus and Boeing to explore a structured deal to split operations.

Spirit is Boeing’s primary aerostructures supplier responsible for producing fuselages for the 737 MAX.

Boeing’s desire to regain control of Spirit is met with resistance from Airbus, which constitutes a significant portion of Spirit’s revenues. 

Also Read: Boeing’s 737 Saga Dents Q1 Bottomline, CEO Emphasizes Improving Quality & Safety

The negotiation dynamics also involve considerations regarding Spirit’s operations in Belfast, a key point of contention, the report added.

Airbus CEO Guillaume Faury has hinted at the possibility of Airbus assuming control of Spirit’s Belfast and Kinston, North Carolina plants, further complicating the negotiation landscape.

Spirit AeroSystems, a former subsidiary of Boeing, has evolved into a major supplier for both Boeing and Airbus. 

Price Action: EADSY shares closed lower by 0.24% at $41.10 on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Photo via Wikimedia Commons

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