According to reports, Airbus is expected to sell two of its French factories, in Saint-Nazaire and

Meaulte, along with two in Germany, Nordenham and Varel. The restructuring plan which has been

Power 8 plan, aimed at saving €5 billion (£3.3 billion) by 2010 and €2 billion a year thereafter.

Moreover, moving ahead with the plan will not be easy for Airbus as it still faces turmoil as the

plan is expected to meet stiff union opposition in Germany and France, where the issue is already

being exploited politically. In the meanwhile, the plan has shocked the UK job market as it

announced that about 1,600 jobs are being shed at the UK operations of Airbus over the next four

years amid widespread speculations of a reduction of only 1,000 jobs in Britain.

The 1,600 cuts in the UK will be divided between Broughton, in North Wales, and Filton, near

Bristol, half of the cut expected to be among temporary and contract staff, and the rest directly-

employed workers.

In addition to it, half of all work on future Airbus programs is likely to be outsourced to other

companies as part of a radical restructuring. The recovery plan plans to partial or complete sale of

six of Airbus’s 16 plants.

Power8 prepares way for "New Airbus"

The details of Airbus  Power8 restructuring plan was wednesday presented to the Airbus European
Works Council and announced the creation of a new industrial and operating structure for the
Company.

Power8 will enable Airbus to face the very substantial challenge of the US dollar weakness, increased
competitive pressure, the financial burden related to the
A380 delays as well as meet its other future investment
needs.
Power8 provides for strong cost-cutting measures, aims at transforming the Airbus business model
and the development of a global network of partners. It will allow Airbus to devote its resources to
core activities and eliminate inefficiencies within its current structure.

The programme aims at the full industrial integration of Airbus by establishing a new industrial
organization with transnational Centres of Excellence replacing the existing national structures. This
transformation will happen progressively over several years and includes the further extension of
Airbus' global footprint.

As part of Power8, the Airbus management will implement strong cost reduction and cash
generating efforts leading to EBIT contributions of € 2.1 billion from 2010 onwards and additional € 5
billion of cumulative cash flow from 2007 to 2010.

A large part of the cost savings will be achieved through reducing the total Airbus overhead
workforce (including temporary and on-site supplier workforce) by 10,000. The envisaged measures
to reduce overhead costs, and specifically headcount, require a provision of € 680 million to be
taken in the first quarter of 2007. Airbus has put in place a robust tracking system with tangible
matrix regarding cost and cash impact up to their materialization in the financial statements.

Airbus has the full support of all EADS core shareholders for Power8. The EADS and Airbus
management has reviewed the programme thoroughly and is convinced that the envisaged
measures will deliver on its economic promises.

- The core objective of the programme is to make Airbus more efficient and competitive, so as to
produce the most advanced and profitable products, and to serve its customers better in the
future", the CEOs of EADS Tom Enders and Louis Gallois said.

- We have had an excellent sales and delivery performance in 2006. But our long-term future is at
stake if we don't act now," Mr Gallois, who is also Airbus President and CEO, said.

- We fully appreciate that this transformation must be undertaken jointly and in close consultation
with our social partners". Airbus will report a negative EBIT in 2006 and, following the A380 delays,
faces significant cash needs and deteriorating profits in the future, together with large investments
needed for current and future programmes, in particular the A350 XWB. More fundamentally, the
Dollar weakness alone has led to a 20 percent loss of competitiveness in only six years versus Airbus'
competition.

- We cannot continue to produce at our current Euro costs and sell at Boeing’s dollar prices," he said.

- Without establishing Power8 quickly, profitability will drift significantly short of industry standards
and of reasonable expectations. This is an unsustainable and unacceptable situation. Power8 is
designed to reduce that gap," said EADS and Airbus CFO Hans Peter Ring.

Power8 envisages the following measures:

Lighter and cost efficient management

The objective of a lighter and cost efficient management will be addressed by several Power8
programme modules and in particular by the Reduction of Airbus Overhead costs module.
Reduction of Airbus Overhead Costs: The Airbus management proposes a progressive headcount
reduction of 10,000 overhead positions over four years - thereof in Airbus Deutschland around 3,700
in Airbus France around 3,200, in Airbus UK around 1,600, in Airbus CE around 1,100 and in Airbus
España around 400.

5,000 of these positions are temporary or on-site subcontractors, where reductions will begin
immediately. The other 5,000 overhead positions affected will be direct Airbus employees. Priority is
given to achieve reductions through negotiated voluntary severance processes and schemes in each
country concerned. The respective national processes, including negotiations in each country of
voluntary severance schemes, will be launched immediately. Airbus' total workforce consists of
57,000 direct employees plus 30,000 subcontractors.

At this stage, the Airbus management proposes no forced redundancies. Should these schemes not
generate the expected level of reductions within the next 12 to 18 months, other measures will have
to be considered to fully achieve the cost saving targets.

- We will manage the social impact of these measures properly and in close dialogue with our
employee representatives," Mr. Gallois stressed.

- The burden will be spread in a fair and equitable manner across Airbus. The balance of the Airbus
founding nations will be preserved."

Airbus will launch a strong training initiative, to identify the skills required by the "New Airbus" and
to deliver the relevant training programmes.

Other substantial cost cutting and strict budget control measures are already underway. They
include a temporary hiring freeze, an executive salary freeze for 2007, as well as significant cuts in
general expenses. As part of the overall cost cutting, Airbus and EADS will work together to
implement the strategy of shared services and sourcing.

Further Power8 modules aimed at streamlining Airbus' processes and supporting the transition to
the "New Airbus" are:

Develop Faster: This module aims at the reduction of cycle time of new aircraft development from
7.5 to 6 years, while establishing robust development processes with risk-sharing partners to secure
these cycle time reductions, as well as the required aircraft maturity at entry into service. It also aims
at improving the productivity of the company's engineering activities by 15 per cent.

Lean Manufacturing: It is meant to further integrate manufacturing and associated engineering, and
ensure the deployment of consistent lean production principles across all plants. A productivity
increase by 16 per cent is targeted by 2010.

Smart Buying: This module aims at the reduction of the Airbus supply cost base. It will also
contribute to the reshaping and consolidation of our supply base, and the building of a network of
strong Risk Sharing Partners to Tier 1 suppliers, while streamlining the logistics organization (from 80
to 8 logistic centres).

Maximise Cash: This module targets the reduction of financial working capital and the tight control
of cash in all operations.
The Customer First Module will ensure the interests of customers to always come first. "Delivering
and even improving on our commitments, serving our customers even better, with even higher
levels of services, more reliability and reactivity, and further improved quality is our prime objective
in all this", explains Mr Gallois.

Focus on core business

In the future, Airbus will focus on "core business" activities that are critical for the integrity and
safety of the aircraft, or vital for technological and commercial differentiation, for the operability and
reliability of the aircraft and its maturity at entry into service. These activities include overall aircraft
and cabin architecture, systems integration, as well as the design, assembly, installation, equipping,
customization and testing of major and complex components or manufacturing of new technology
parts.

"This shift is essential for Airbus' future. Many industries face similar challenges, but we have to
establish our own way with specific solutions. We must retain the competencies that are essential to
design, develop, produce, deliver and support the best and most efficient products for our
customers," Mr. Gallois said. "If we move carefully, pragmatically and quickly, we will leverage our
position as a leading global player in the civil airliner market."

This "core" activity focus will be implemented in the "make or buy" strategy adopted for the A350
XWB. About 50 per cent of aerostructure work will be outsourced to risk-sharing partners (€ 1.8
billion non recurring costs and € 600 million associated CAPEX). This is proportionally about twice as
much as in earlier programmes.

The workshare responsibility for the development of the A350 XWB will be split equitably among the
founding nations with about 35 percent for Germany and France, 20 per cent for the UK and 10 per
cent for Spain.

Long-term global partnership network

Airbus will restructure its industrial set up and establish in the coming years a long-term oriented
network with strong partners. This will allow Airbus to share development costs as well as
engineering resources.

"We will turn Airbus into an extended enterprise. The A350 XWB will draw on this new business
model, as we assign large work packages to Tier 1 suppliers in return for a better distribution of
future investment, risks and opportunities, with a consolidated supply base," Mr. Gallois said.

Airbus is considering industrial partnerships at its plants in Filton, Meaulte and Nordenham, in order
to facilitate their development from metallic to composite design and manufacturing technology.
The company has already received unsolicited proposals by potential industrial partners ready to
invest in these sites and to possibly take partially or fully the control of them in the framework of the
extended enterprise concept.

Airbus is determined to pragmatically attain the optimum scope of industrial activities and to
optimize resource allocation and enhance capital efficiency. "This is the right time to consider such a
partnership approach," Mr. Gallois said. "Our order book translates into more than five years of
production, and customer demand continues to be very high for our aircraft. We are ramping up our
production everywhere and have just launched the A350 XWB. We are ready to share attractive
business opportunities with strong partners."

The sites in Laupheim, St. Nazaire-Ville and Varel will continue to perform long-term substantial
workloads on the current Airbus aircraft programmes, such as the A380, the A320, the A330/A340
families, and the A400M. Airbus is committed to seeking viable future opportunities for these sites,
this includes options to sell sites to key suppliers, management buy out or combination with nearby
sites. This will of course be done in close consultation with the social partners.

"We will prepare the future of each and every one of our sites in the overall interest of Airbus, to
strengthen industrial partners and suppliers, and to ensure long-term local business and
employment continuity," said Mr. Gallois.

Streamline the final assembly lines

A number of measures are also being implemented to further increase the efficiency of the final
assembly lines (FALs).

The A350 XWB will be assembled and receive its interior furnishing in Toulouse, in the same facilities
as the current A330/A340, enabling a capacity enhancement of this FAL.

A third A320 Family FAL will be set up in Hamburg immediately to cope with the steep production
ramp-up currently under way. This FAL will be established in already existing facilities and will have
full type flexibility when demand for A320s exceeds rate 14 per month. The A320 will continue to be
assembled in Toulouse up to rate 14. Hamburg will also perform final assembly of the future New
Single Aisle family.

Furthermore, in order to allow parts to be fitted in the most logical place to optimize the overall
cycle time, some upstream preparatory A320 and A380 cabin installation work will be transferred
from Hamburg to Toulouse. Cabin installation will remain in Hamburg. A380 deliveries will still be
made from both Hamburg and Toulouse.

Fully integrated and transnational organisation

Airbus will introduce a fully integrated and transnational organisation to support the
implementation of Power8 and the establishment of the new business model.

This new organisation will enable cost savings and strengthen leadership through clearer
accountability, faster decision-making and simpler interfaces.

- Integration means strengthening the accountability of those responsible. It is not an invitation for
centralisation or doing everything in-house. On the contrary, we demand an empowerment of those
in charge," Mr. Gallois explained.

The new industrial organisation will force process streamlining through the establishment of four
truly transnational "centres of excellence" led by the Head of Operations: Fuselage & Cabin, Wing &
Pylon, Rear, and Aerostructure, the latter being in charge of fuselage subassembly and interior
furnishing activities. This will replace the current organization of eight nationally structured centres
of excellence.

Further organisational changes include completing the integration of support functions such as
Finance and HR as well as reinforcing the authority of core functions such as Engineering,
Procurement and Programmes.

The national entity leaders will assume a strong representative role, acting as Airbus ambassadors.
They will be accountable for all aspects connected to national regulations (legal, social etc.) but will
not have any operational responsibility. They will report to the Airbus CEO office and act on its
behalf.

Sharing services with EADS corporate functions where clear benefits arise, will be another lever to
improve the efficiency of the support processes, optimize resources and reduce overhead costs.

Concluding his comments, Louis Gallois said:

- None of these changes will be easy, but they are essential to securing the future of Airbus as a
world-leading aircraft manufacturer for the long-term, and a business of which all its stakeholders
can be rightly proud."

Airbus operates in a growth market of 22,000 new aircraft in the next 20 years. The order backlog
represents about five years of future production, and the company continues to deliver record levels
of aircraft.

Airbus is an EADS company.