EUROPEAN Aeronautic, Defence and Space Company (EADS) is the rather cumbersome name of the largest shareholder in the aircraft maker Airbus. It was formed in 2000 through the merger of France’s Aerospatiale, Casa of Spain and the German company Daimler-Chrysler Aerospace. It is the world’s second largest aerospace company, Boeing being the biggest.

Apart from an 80% shareholding in Airbus, the company also owns the helicopter manufacturer Eurocopter, satellite company Astrium and has a 37.5% stake in MBDA, a missile manufacturer.

In the true spirit of European collaboration, EADS has co-chief executives, one of whom, Noel Forgeard, resigned in June following the announcement of delays in delivery of the new Airbus A380. The Airbus chief executive, Gustav Humbert, also stood down. Airbus has annual revenues of €34.2 billion and employs 113,000.

The experts below have been selected for their skills in a number of investment area. They, or the funds they manage, may hold shares in the companies or sectors discussed.

Kevin McConnell, head of equities, Bloxham

EADS has been the worst performing stock on the FTSE Eurotop 100 Index this year, losing more than 30% of its market value amid delays in the delivery of its A380 superjumbo.

Last month, EADS announced that production of the Airbus A380 would be delayed for a further six to seven months. The delays, forecast to reduce earnings by €2 billion through 2010, have led to a management restructuring, including the appointment of Christian Streiff, former deputy chief executive of Saint-Gobain, as the chief executive of Airbus.

Interim results released last week were dogged by operational issues associated with the A380 delivery schedule. Although overall results were robust, with revenues increasing across all divisions by 18% to €19 billion, the group indicated the review of the A380 may lead to the recognition of further expenses.

Aside from production challenges in its Airbus subsidiary, additional risks include the weakening US dollar, delays in deliveries and changes in the ownership structure.

As aircraft are sold in dollars, EADS uses hedging to counter currency volatility, but most of its hedges unwound in the first half of this year. Consequently the company has added $10.7 billion (€8.4 billion) of new hedges at a rate that is 17% less favourable than its previous hedge.

So far this year, rival Boeing has won four times as many aircraft orders as Airbus and it looks certain to surpass Airbus’s annual order book for the first time since 2000.

Although growth in the emerging and replacement markets will continue to support aircraft demand, we believe we are nearing the peak in the cycle and margins may begin to moderate.

()Elsewhere, defence revenues are growing as key programmes near production. EADS subsidiary Eurocopter was recently awarded a valuable contract to supply helicopters to the US army, potentially transforming EADS into a purer defence company and reducing its exposure to Airbus, which accounts for more than 60% of revenues.