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The A380 Program

Speaker: Mario HeinenA380 / Senior Vice-president

Global Investor Forum19th & 20th October 2006

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The Company disclaims any intention or obligation to update these forward-looking statements. Consequently the Company isnot responsible for any consequences from using any of the below statements.

Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and otherforward-looking statements that are based on management‘s beliefs. These statements reflect the Company‘s views and assumptionsas of the date of the statements and involve known and unknown risk and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in such statements.

When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend”, “plan to” and “project” areintended to identify forward-looking statements. Such forward-looking statements include, without limitation, projections forimprovements in process and operations, new business opportunities, revenues and revenues growth, operating margin growth, cashflow, deliveries, launches, compliance with delivery schedules, performance against Company targets, new products, current andfuture markets for the Company products and other trend projections.

This forward looking information is based upon a number of assumptions including without limitation:· Assumption regarding demand· Current and future markets for the Company‘s products and services· Internal performance including the ability to successfully integrate EADS‘ activities to control costs and maintain quality· Customer financing· Customer, supplier and subcontractor performance or contract negotiations· Favourable outcomes of certain pending sales campaigns

Forward looking statements are subject to uncertainty and actual future results and trends may differ materially depending on varietyof factors including without limitation:· General economic and labour conditions, including in particular economic conditions in Europe and North America,· Legal, financial and governmental risk related to international transactions· The Cyclical nature of some of the Company‘s businesses· Volatility of the market for certain products and services· Product performance risks· Collective bargaining labour disputes· Factors that result in significant and prolonged disruption to air travel world-wide· The outcome of political and legal processes, including uncertainty regarding government funding of certain programs· Consolidation among competitors in the aerospace industry· The cost of developing, and the commercial success of new products· Exchange rate and interest rate spread fluctuations between the Euro and the U.S. dollar and other currencies· Legal proceeding and other economic, political and technological risk and uncertainties

Additional information regarding these factors is contained in the Company‘s

Safe Harbor Statement

“registration document” dated 26th April 2006.

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Achievements and 2006 major milestones

– Static tests completed, Fatigue test specimen at 15.790 flight cycles.All test benches in operation

– Both Rolls Royce and Engine Alliance engines certified

– March 26th 2006: MSN 007 Successful Emergency Cabin Evacuation Trial 853 passengers and 20 crew members in 78 seconds!

– 7th May: First Customer Aircraft flown to Hamburg

– Early Long Range flights successfully completed with MSN 2

– Main airports are prepared to receive the A380

2006: Flight testing will be finalised by end of Oct, followed by Type Board Meeting Mid November, and

CERTIFICATION MID DECEMBER

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5EF Wing after test start September 2005

A380 Major Structural Testing

Rear End Test/max VTP bending testJan 05

ES Ultimate Wing Bending test February 2006

Fatigue Test Specimen (EF)Test Purpose: 2.5 times Aircraft life=47500FC

• Oct06: 18,559 FC and C-Inspection• at TC: more than 1 DSG

Major Static Test (ES)All TC tests and all Residual Strength tests

completed

Rear End Test (RET)All tests completed for TCDT testing stopped for

Inspection at 3800 FC

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Successful Evacuation Test26th March 2006, Hamburg

•• 873 occupants873 occupants853 853 passengerspassengers: 538 MD + 315 UD: 538 MD + 315 UD18 18 cabin crewscabin crews and 2 flight and 2 flight crew members crew members

•• EvacuationEvacuationSemi Semi darknessdarkness50% of 50% of doors inoperativedoors inoperative

In 78 SecondsIn 78 Seconds…………..

•• MSN 007 MSN 007 EvacuationEvacuation Test Test witnessedwitnessed by by Airworthiness AuthoritiesAirworthiness Authorities(EASA (EASA withwith FAA participation)FAA participation)

EASA and FAA approved 853 as the maximumpassenger seating capacity for the A380-800.

EASA and FAA approved 853 as the maximumEASA and FAA approved 853 as the maximumpassenger seating capacity for the A380passenger seating capacity for the A380--800.800.

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MSN002: Early Long Flights (ELF)4 – 8 September 20064 ELF 7 hours

10 hours12 hours (overnight)15 hours

474 passengers on each flightpassengers on each flight

Full cabin serviceFull cabin serviceFacility assessmentsFacility assessmentsQuestionnaires & interviews“Real Life’ systems check

The quietest, roomiest, lightest cabin in the skyThe quietest, roomiest, lightest cabin in the sky

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A380 flight test status A380 flight test status –– October 16th October 16th

MSN 001 First Flight: 27 April 05

Hours flown: 1172 Take-offs: 968

MSN 004First Flight: 18 Oct 05

Hours flown: 757Take-offs: 515

MSN 002First Flight: 03 Nov 05

Hours flown: 230Take-offs: 59

5 flight test Aircraft, 2247 hours, 1564 take5 flight test Aircraft, 2247 hours, 1564 take--offsoffsAs at 22As at 22ndnd September 2006September 2006

MSN 009First Flight: 24 Aug 06

Hours flown: 81 Take-offs: 19

MSN 007(In Hamburg for cabin fit)First Flight: 19th Feb 06

Hours flown: 7Take-offs: 3

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ToulouseToulouse Le Le BourgetBourget Le Le BourgetBourget

Le Le BourgetBourget TarbesTarbes FrankfurtFrankfurt

SingaporeSingapore Kuala LumpurKuala Lumpur Kuala LumpurKuala Lumpur

BrisbaneBrisbane SydneySydney MelbourneMelbourne SydneySydney DubaiDubaiDubaiDubai

DubaiDubai MedellinMedellin IqaluitIqaluit PointePointe--àà--PitrePitre SingaporeSingapore

London LHRLondon LHRSingaporeSingapore London LHRLondon LHR London LHRLondon LHR BerlinBerlin

ToulouseToulouse ToulouseToulouse

FrankfurtFrankfurt FrankfurtFrankfurt

FrankfurtFrankfurt SingaporeSingapore

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A380: What Airline Pilots Say

“Compared to the A320, you do not feel the difference in flight. Although much bigger than the A320, the A380 is easy to taxi.”

“I have been flying all the fly-by-wire types of Airbus. It’s the same situation here with the A380: it’s very easy to fly these aircraft because handling characteristics are extremely similar and it’s a real family.”

“The aircraft is much more responsive than anticipated, it doesnot feel like a big aircraft. Cockpit innovation and new technologies are combined well with Airbus cockpit philosophy. Coming from the A330, you feel at home and the transition is very easy.”

“The aircraft, for its size, is extremely manoeuvrable: very responsive, easy to fly, very stable. Actually, I would like to take this plane home and start flying with it immediately.”

“Please do not change the handling qualities of this a/c!”

“The cockpit and flying characteristics are similar, so it is easy for somebody who has flown an Airbus before to fly this airplane. I thought that because the A380 is bigger there would be a lot more lag in the controls, but to my pleasant surprise it is very lively and very stable - it’s a lovely plane.”

“The aircraft is very stable but also very responsive; more like flying an A320 than an A340.”

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– Huge step in technology successfully implemented

– Outstanding Handling Qualities confirmed by airline pilots

– Excellent take off and landing performance

– Noise levels better than commitments

– Emissions significant lower than current limits

– Cabin comfort (internal noise and vibrations)

· setting new industry standards

· A380 cockpit the quietest in the sky

– Proven airport compatibility

– Turn Around Time comparable to 747

A380 is technically an excellent aircraft

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Industrial ramp up problems over-shadow technical achievements:

– Lower level of section completion versus May 2005 Planning

– Related out of sequence work in FAL has led to delays on “Electrical Power On” – a major milestone in the build process

– Following Jun06 Communication to all customers a thorough “bottom up” and “top down” review completed by end of Sept06

A380 Industrial Situation : The Facts

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A380 Industrial Situation: Findings

A crucial element, the 3D Digital Mock-up Unit (DMU) used for the installation of the physical routing and packaging of electrical harnesses is not at the required level of robustness and finish for the fuselage sections 13-18 unlike those of the other fuselage sections (11-12 & 15-21) due to:

– to continuous changes of functionality and geometry

– lack of strict control and management of changes

– the combination of the complexity, the amount of the electrical systems and equipment and the specificities of the A380 space allocationconstraints

– inefficiencies of the processes and tools used

– higher degree of offered customisation compared to previous programs

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Complexity of A380 Electrics

Define electrical function

Group wires to harnesses

Place harness in DMU

Install in aircraft

1,150 electrical functions

98, 000 wires with 40,000 connectors

508,000 items in the DMU

530 km wires in every A380!

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15Main Electric/Electronic Bay

The Volume Factor - Nose Fuselage S11-12

Main electronic Bay below flight deck

Emergency Electronic Bay

• Number of wires 100 000 • 530 km of wires bundled into 350 km of cables

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Electrical Systems Installation

Forward fuselage

Electrical Installation

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17Install wire bundles

Design of Electrical Harness InstallationDefine electrical function

Based on final routing model:- Launch manufacturing of

physical wire bundles - Structural support parts

installation- Wiring installation drawings

Changes from development process and customisation

Continuously update the

digital model for electrical

installation

Allocate wires to bundles

Define geometry of harnesses in DMU. Place harnesses into digital aircraft & cabin model.Design routing

Not brought to latest

definition

- Number of changes,- Insufficient Tool

Performance - Early Learning Curve

Installation Conflicts

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A380 Industrial Situation: The Consequences

– Inefficient tools and processes lead to a high number of time consuming changes

– Creating Out of sequence work and Increase in outstanding work

– Imposing slow down of industrial flow to increase level of completion

– Present process clearly limits ramp up capability

– Additional delay of 1 year

Quality and Safety are in no way compromised

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Finalization of electrical

installation is the key in order

to start the station properly

Station 37Station 37HTP Preparation

Station 41/40Station 41/40Structural Station

Station 45Station 45Wing Movables Instal.

Station 31/30Station 31/30Structural CompletionEqt & Powerplant install.SystemsTesting

Station 18Station 18Outside Tests

Station 15Station 15Production Flights

Station 23Station 23A/C Handling

& Defueling

Station 20Station 20Aircraft

Furnishing

Station 12Station 12Aircraft Painting

Station 11Station 11CabinProduction Flights

Station 07Station 07Customer Delivery

(EUR & M/E)

Station 14Station 14A/C Preparation

Ferr

y Fl

ight

Ferr

y Fl

ight

TLS

TLS

HA

MH

AM

Ferry FlightFerry FlightHAM HAM TTLSLS

Station 36Station 36VTP Preparation

Station 13Station 13Customer Delivery

(Rest of World)

Stations 50/51/52/53 Stations 50/51/52/53 Fus. MCA

Preparation

Stations 16 Stations 16 VTP Painting Recovery points for harness integration

Final Assembly Line – The Bottle Neck

4 aircraft

13 aircraft

Harness installations start here

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A380 Industrial Situation : Decisions– Tools & Processes successfully used and proven on other sections will

be applied on front and rear fuselage

– Dedicated trans-national team in Toulouse will re-design and adapt the new DMU tool to sections 13 and 18

This will provide the solid and robust basis for a proper ramping up of series production.

– New Process oriented Organisation Structure implemented in Hamburg:- Transversal integration fuselages-cabin-systems- Integrated teams collocated at aircraft- International electric design plateau

– New Program Organisation structure with dedicated skills and resources

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New Organisation : Airbus-Germany

CFSIWave 1

Cabin & CargoWave 1

FAF Section Engineering

Wave 1

ElectricWave 1

SystemsWave 1

Functional

Integration

Geometrical

Integration

Zone 1-Zone n

EYV LNL

CFSIWave 2

Cabin & CargoWave 2

FAF Section Engineering

Wave 2

ElectricWave 2

SystemsWave 2

Customer

Definition

Cabin Architect

Realizer

Freighter

Quality

BFE / SFE Mngt.

Installation

3D/2D

Harnesses &

Kits

Change

Control

HoE

Primary

Structure

Longitudinal

Structure

Mech.Sys.Inst.

Secondary

Structure

MAP

FAL 1

ElectricLNAL

U. Fresenborg

CFS IntegratorLNAI

H. Warnecke (i.PU)

Systems

A. Janke (i. PU)

Cabin & CargoBCN

S. Scholz

BC

Progr. Mngt.Wave 2LNA2

G. Falk

Progr. Mngt.Wave 1LNA1

H. Lütjens

LNE

CE Wave 1

CEWave 2

Chief EngineerLNER

H. Warnecke

Chief

Engineering

MAP Arbitration

A380 HAM PlantLNAM

G. Mecke

TBD

A380 Programme GermanyLNA

R. Fuchs

ES

FAF Sec.E.LNAE

K. Kalmer

HRLNAH

J. Kutzim (i. PU)

PLNAP

R. Hoppe

FLNAFN.N.

QLNAQ

H.G. Schrader

Processes & ToolsLNAA

A. Carcasses (i. PU)

FAL1OSW

FAL2OSW

St.-O.-Ltg.TLS

MCA

SNZOSW

= Reinforcement from other Programmes

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The Revised Programme Ramp up

•This has led to the following programme:

New Planning June062006 - 0 22007 - 1 252008 - 13 372009 - 25 452010 - 45 50

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Thank youThank you

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A380 financial update

Andreas SperlAirbus Chief Financial Officer

Global Investor Forum19th & 20th October 2006

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The Company disclaims any intention or obligation to update these forward-looking statements. Consequently the Company isnot responsible for any consequences from using any of the below statements.

Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and otherforward-looking statements that are based on management‘s beliefs. These statements reflect the Company‘s views and assumptionsas of the date of the statements and involve known and unknown risk and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in such statements.

When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend”, “plan to” and “project” areintended to identify forward-looking statements. Such forward-looking statements include, without limitation, projections forimprovements in process and operations, new business opportunities, revenues and revenues growth, operating margin growth, cashflow, deliveries, launches, compliance with delivery schedules, performance against Company targets, new products, current andfuture markets for the Company products and other trend projections.

This forward looking information is based upon a number of assumptions including without limitation:· Assumption regarding demand· Current and future markets for the Company‘s products and services· Internal performance including the ability to successfully integrate EADS‘ activities to control costs and maintain quality· Customer financing· Customer, supplier and subcontractor performance or contract negotiations· Favourable outcomes of certain pending sales campaigns

Forward looking statements are subject to uncertainty and actual future results and trends may differ materially depending on varietyof factors including without limitation:· General economic and labour conditions, including in particular economic conditions in Europe and North America,· Legal, financial and governmental risk related to international transactions· The Cyclical nature of some of the Company‘s businesses· Volatility of the market for certain products and services· Product performance risks· Collective bargaining labour disputes· Factors that result in significant and prolonged disruption to air travel world-wide· The outcome of political and legal processes, including uncertainty regarding government funding of certain programs· Consolidation among competitors in the aerospace industry· The cost of developing, and the commercial success of new products· Exchange rate and interest rate spread fluctuations between the Euro and the U.S. dollar and other currencies· Legal proceeding and other economic, political and technological risk and uncertainties

Additional information regarding these factors is contained in the Company‘s

Safe Harbor Statement

“registration document” dated 26th April 2006.

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A380 backlog & market remain robust• 159 firm orders & no cancellations as of today• Strong market demand for long term capacity • Competitive economics compared with competition,

reinforced by high fuel prices

A380 will be a very efficient aircraft• Product performances confirmed through flight tests• Certification on track for end 2006

A380 profitability • Long term profitability to be viewed over full programme life• Ramp-up disruptions will mainly impact next 5 years

A380 Financial UpdateIntroduction

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• 84 aircraft to be delivered for period 2006 to 2010 vs 159 deliveries planned in the original business plan

75 deliveries postponed beyond 2010

• Huge negative impact on EBIT & Cash from 2006 to 2010

A380 New Deliveries Profile

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50

1

13

45

25

45

25

0

10

20

30

40

50

60

2006 2007 2008 2009 2010

OriginalBusiness PlanSept.2006

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Overall shortfall of €4.8bn for the years 2006 to 2010 compared to the original Business Plan

• Delivery volume shortfall: €2.0bn postponed beyond 2010

• Gross margin deterioration on 2006/2010 deliveries: €2.8bnThis amount assumes:

A large deterioration of unit costs during the ramp-up phaseContractual obligations with our customers

• Provisions for A380 loss-making contracts booked in 2006

Mitigation measures undertaken through power8

EBIT Impact of A380 Delivery Delays

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2006 EBIT and Hedging A380 negative impact of €1.1bn on 2006 Airbus EBIT:• Loss making contracts : - €0.6bn current estimate

Unit cost deterioration + liquidated damages allocated to contracts €/$ Assumption ~ 1.3

• Inefficiency on early aircraft : - €0.5bn Out of sequence workModifications to electrical harnessesLearning curve postponed to wave 2 aircraft

Hedging:• Hedging instruments maturing in 2007/2008 will be used for $

exposure on other Programmes ( SA ramp-up )• New hedges are still implemented according to EADS/AIRBUS

hedging policy for 2009 and beyond

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Cash Impact of A380 Delivery DelaysOverall shortfall of €6.3bn for the years 2006 to 2010

compared to the original business plan

• Gross margin shortfall: €4.8bn

• Net working capital deterioration: €1.5bnThis amount assumes:– postponement of pre-delivery payments linked with delivery delays– working capital requirements linked to additional aircraft production

lead-time

• Peak A380 negative net working capital in 2009 : - €3bn

Mitigation measures undertaken through Power8

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0

0,5

1

1,5

2

2,5

2001 2002 2003 2004 2005 e2006 e2007 e2008

A380 R&D + Capex in € bn

A380 R&D and Capex Ramp-down confirmed from 2006 onwards

Note: intangible assets (IAS 38) included for €0.7bn

R&D / Capex (Airbus Share)€11.7bn (cec)

(all variants at completion)

completedby end 2006

> 80%

• > 80% of (R&D + Capex) completed by end 2006 vs 60% end 2004

• Additional R&D effort in 2006/07 mainly on electrical design : €0.2bn/0.3bn

• Ramp-down closely monitored for maturity at Entry In Service in 2007

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A380 Business Case Sensitivity Analysis

2005 updated Business Case:• IRR outlook: 19%• Breakeven point: 270 a/c• Expected deliveries: 751 a/c• Long term €/$ rate : 1.12

2006 updated Business Case: • IRR outlook : 13%• Breakeven outlook: 420 a/c• Expected deliveries: 751 a/c• Long term €/$ rate : 1.12 ( outlook )

The main parameters of A380 Business Case have changed significantly

Strong deterioration of IRR reflects the impact of delayed deliveries (-4%) and cost overruns linked to major disruptions in the ramp-up phase (-2%)

With starting reference 2007 notional A380 breakeven is 150 a/c

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Conclusion

• A380 delays have a significant impact on 2006/2010 profitability

• Measures undertaken through Power8 to mitigate financial impacts

But:• More than 80% of (A380 R&D + Capex) will be spent at end of 2006

• The A380 program remains strongly profitable beyond 2010

• A380 will generate €9bn NPV from 2007 till 2021

• A380 customers are still on board and new customers will come

Key objectives:Protect A380 Backlog – All customers treated in a fair manner

Restore confidence with our customers

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THANK

YOU