Airbus 2015 Annual Report Download - page 44

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 12 l
Risk Factors
2 Business-Related Risks
Tax Issues
As a multinational group with operations and sales in
various jurisdictions, the Company is subject to a number of
different tax laws. It is the Company’s objective to adhere to
the relevant tax regulations in the different countries and to
ensure tax compliance while structuring its operations and
transactions in a tax-efficient manner. The structure of the
Company’s organisation and of the transactions it enters into
are based on its own interpretations of applicable tax laws and
regulations, generally relying on opinions received from internal
or independent tax counsel, and, to the extent necessary, on
rulings or specific guidance from competent tax authorities.
There can be no assurance that the tax authorities will not seek
to challenge such interpretations, in which case the Company or
its affiliates could become subject to tax claims. Moreover, the
tax laws and regulations that apply to the Company’s business
may be amended by the tax authorities, which could affect the
overall tax efficiency of the Company.
2. Business-Related Risks
Commercial Aircraft Market Factors
Historically, order intake for commercial aircraft has shown
cyclical trends, due in part to changes in passenger demand
for air travel and cargo activity, which are in turn primarily
influenced by economic or gross domestic product (“GDP”)
growth. Other factors, however, play an important role in
determining the market for commercial aircraft, such as (i)the
average age and technical obsolescence of the fleet relative to
new aircraft, (ii)the number and characteristics of aircraft taken
out of service and parked pending potential return into service,
(iii)passenger and freight load factors, (iv)airline pricing policies,
(v)airline financial health and the availability of outside financing
for aircraft purchases, (vi)evolution of fuel price, (vii)deregulation
and (viii)environmental constraints imposed upon aircraft
operations. The market for commercial aircraft could continue
to be cyclical, and downturns in broad economic trends may
have a negative effect on its future results of operation and
financial condition.
The commercial helicopter market could also be influenced
by a number of factors listed above and in particular with the
significant drop of the price of oil in 2015, the Company is
impacted by a postponement of investments in the acquisition
of new platforms by offshore helicopter players and a reduction
of flight hours. The uncertainty on the lead time of the market
recovery and the low oil price may have an impact on Airbus
Helicopters financial results and could lead to cancellations or
loss of bookings.
Pension Commitments
The Company participates in several pension plans for
both executive as well as non-executive employees, some
of which are underfunded. For information related to these
plans, please refer to the “Notes to the IFRS Consolidated
Financial Statements — Note29.1: Post-employment benefits
— Provisions for retirement plans”. Although the Company has
recorded a provision in its balance sheet for its share of the
underfunding based on current estimates, there can be no
assurance that these estimates will not be revised upward in
the future, leading the Company to record additional provisions
in respect of such plans.
Necessary adjustments of such provisions are driven by (i)the
discount factor (dependent in part on interest rates) and the
inflation rate applied to calculate the net present value of the
pension liabilities, (ii)the performance of the asset classes
which are represented in the pension assets, and (iii)additional
cash injections contributed by the Company from time to time
to the pension assets. The Company has taken measures to
reduce potential losses on the pension assets and to better
match the characteristics of the pension liabilities with those of
the pension assets as a long-term objective. Nevertheless, any
required additional provisions would have a negative effect on
the Company’s total equity (net of deferred taxes), which could
in turn have a negative effect on its future financial condition.
Financial Statements 2015
11 22 33 44 55
QRegistration Document 2015
Annual Report 2015 Financial Statements 2015