Airbus chief executive officer Fabrice Bregier has told staff their jobs will not be affected by a proposed merger between parent company European Aeronautic, Defence and Space Co and Britain's BAE Systems.
"An EADS and BAE Systems combination is not expected to affect Airbus and its employees in daily operations," Mr Bregier said in an internal communication.
"Airbus's organization, product plans, engineering, manufacturing and strategies for the future should continue as is."
Airbus has a "traditional and long-standing relationship with BAE," which once owned 20 per cent of the company, he said.
EADS stock slumped as much as 10 per cent in Paris, while BAE declined as much as 9.2 per cent in London on concern that a combined company will struggle to achieve savings and penetrate the US defence market.
EADS, the parent of Airbus SAS, would control 60 per cent of the new entity, with London-based BAE owning the rest, the companies said yesterday.
"This will be a very complex organisation and there is a risk of synergies coming only much later," said Yan Derocles, an analyst at Oddo Securities in Paris.
"Airbus is big growth story and will be heavily diluted in the new company. And there's also the problem of significant constraints on the defence business in the US."
A merger would revive plans for a single European aerospace business that were abandoned more than a decade ago when the formation of EADS and BAE split the industry in the region along civil and defence lines.
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Bloomberg