Michael O'Leary (int'l edition)

Europe's air-travel industry is among the world's most hidebound and overregulated. But Michael O'Leary, 39, is doing his utmost to change that. He calls it ''taking on the rip-off artists.'' The former property developer and tax consultant took over bankrupt Ryanair in 1991. Now, the Dublin carrier boasts one of the industry's best profit margins: In 1999, when most European airlines struggled, Ryanair earned pretax profits of $51.8 million on revenues of $264 million.

O'Leary's formula is deceptively simple: He offers no-frills flights to European destinations, including Malmo, Sweden and Hamburg, Germany, from Luton and Stansted airports in the suburbs north of London. He has also brought fares sharply down. When Ryanair started flying to Venice last year, the lowest round-trip fare available midweek on British Airways PLC was $815. On Ryanair: $147.

O'Leary's goal is to bring air travel within financial reach of more Europeans--and to make money at it. Ryanair, Europe's eighth-largest airline, carried 6 million passengers in 1999. O'Leary plans to double that in five years. ''We can make airline travel affordable for the 50% of Europeans who now can't afford to fly,'' he says.

O'Leary joined Ryanair in 1991 as personal assistant to the company's founder, Tony Ryan. The then-privately owned carrier, which was founded in 1985, was bleeding money. It had gone through nearly all of its startup capital of $30 million. Shortly after joining the company, O'Leary traveled to the U.S. to visit Southwest Airlines Co., the low-frills American carrier. After that trip, O'Leary persuaded the Ryans to overhaul their failing airline's strategy.

O'Leary set about immediately cutting routes, from more than 30 to 6, and eliminating frills. Then, he launched Ryanair's first cut-rate flight--with passengers paying extra for food and drinks--from London to Dublin for a round-trip midweek fare of $90. That compared with $300 on Aer Lingus and British Airways. Since that first flight in 1991, Ryanair has gone further, by cutting sales of peanuts and coffee, to minimize turnaround time on the ground. At 25 minutes, it's the fastest in the business. Meanwhile, by flying to secondary airports such as Luton rather than Heathrow, Ryanair cuts down on landing charges. And the airline controls training costs by flying only Boeing 737s.

The Ryan family rewarded O'Leary by making him CEO in 1994 and giving him a 25% stake in the company. Now, O'Leary calls the shots from his sparsely decorated Dublin office, where he works in jeans and shirtsleeves. That sets the tone for the company's culture. Ryanair's 1,200 employees receive relatively low basic salaries but high productivity bonuses. Employees can also participate in a share-options scheme after a year with the company--an innovative benefit in Ireland.

O'Leary's tough line on costs has stirred some labor trouble. In March, 1998, 35 baggage handlers launched a strike in an effort to get Ryanair to recognize their union. Dublin airport was closed for a day for the first time in its history, and Irish Prime Minister Bertie Ahern harshly criticized O'Leary. Instead of backing down, the Ryanair CEO helped unload baggage himself, along with other employees. Now, O'Leary hires baggage handlers on contracts running less than 12 months, though he says he would recognize a union if the majority of employees demanded one.

COST-CONSCIOUS CUSTOMERS. O'Leary is also always looking to cut airport costs. He's currently battling the Dublin airport over high charges. He is gradually shifting more operations to Britain's smaller airports, where the passenger base is larger than Ireland's. Some 55% of Ryanair's passengers now originate in Britain. While Ryanair has become a fixture for those who want low-cost flights to Spanish or French resorts from North London, about half the airline's passengers are businesspeople trying to keep spending down.

As for O'Leary's personal finances, he's doing just fine. His net worth is estimated at $30 million, thanks mostly to Ryanair's successful initial public offering on the London, Dublin, and Nasdaq exchanges in 1997. That's quite a change from his boyhood beginnings on a farm in the midlands of Ireland.

As a hobby, O'Leary raises Black Angus cattle on a farm he owns. But it's Ryanair that gets most of his attention as he looks for new ways to wring profits from one of Europe's most demanding industries.

Stefan Krook (int'l edition)

Never mind the self-effacing laugh and boyish looks of 27-year-old Stefan Krook. The young CEO of Glocalnet, a Swedish telephone startup, is mounting a challenge to state-controlled telecom giant, Telia.

Krook's key asset is Internet telephony. Two years ago, when the technology was barely crawling, he set up a system that could provide low-cost, though strange-sounding, phone calls. His company, Glocalnet, sold mostly to African and Turkish immigrants in Sweden--customers who focused more on cost than voice quality. Since then, Krook has persuaded Internet power Cisco Systems Inc. to install and finance a more ambitious system. That allows Glocalnet to offer better service, while giving Cisco a foothold in Europe's telephone business.

Now, Krook has 80,000 customers and racked up $2.4 million in sales in the first quarter. The surest sign Krook is on the right track is that Telia is hurrying into the same technology. So will Telia swat Krook aside? Don't count on it. He's a moving target. Krook is planning to bid on a license for third-generation mobile telephony. The aim: Win the license, build the system, then sell capacity to other phone upstarts--folks just like him, in Sweden and beyond.

Renato Soru (int'l edition)

Two years ago, when Renato Soru told prospective investors that he wanted to challenge Telecom Italia, they smiled politely. The determined Sardinian was forced to finance his rival telecom-and-Internet startup, Tiscali, with $600,000 of his own capital.

Now, the 42-year-old Soru, a former bond trader and real estate developer, is the one who's beaming. He has already grabbed 25% of the Italian market for Net access from Telecom Italia and now is on a shopping spree. Since taking Tiscali public last October, he has snapped up a half-dozen European Net and telecom players for nearly $500 million in stock. Soru also is bidding for a third-generation mobile-phone license in Italy and investing in a fiber-optic network so that Tiscali can offer high-speed media and Internet services across the Continent.

In a country where powerful vested interests have long stifled real competition, entrepreneurs like Soru are a rare breed. The Sardinian dabbled in different businesses before ending up an Internet millionaire. Eager to run his own company, he quit trading bonds and began developing shopping malls across Italy. He headed to Prague in 1995 to build one there, but decided to launch a Web business instead. With only eight phone lines and modems, he built up an online service that quickly snared 70% of the market. Soru eventually cashed out and returned to Italy to launch Tiscali. The experience, he says, ''taught me to do a lot with a little money.''

Now, Soru's goal is to turn his company into Europe's leading Internet access provider. He's doing that by adding new, innovative services as quickly as possible in order to stay one step ahead of bigger rivals. Tiscali was the first in Italy to offer Internet access free of subscriber fees, prompting Telecom Italia to follow suit. Now that the race is on to drop telephone charges, too, Soru is pumping up revenues from advertising. Since January, they have jumped from almost zero to $140 million. Although Tiscali is not yet profitable, its revenues are expected to top $1.5 million this year, up from $32 million in 1999.

Like any Netrepreneur, Soru keeps grueling hours and he is often on the road. But he has kept Tiscali's headquarters in Sardinia, where he can watch pink-orange sunsets and seagulls winging over the dunes--Soru's antidote to the nonstop Net economy.

ONLINE ORIGINAL: "The Internet Isn't a Telecom Tool, It's a New Media"

Renato Soru, 42, and his Sardinian company Tiscali have become Italy's most famous Internet success story. The first to introduce free Internet service in Italy, Soru is expecting sales of $140 million this year, up from $32 million in 1999. Tiscali's initial public offering in October led to a dramatic share run-up that quickly gave the two-year-old startup a $14 billion market capitalization -- bigger than auto maker Fiat. Seizing the moment, Soru quickly expanded across Europe, snapping up more than a half-dozen Internet and telecom companies.

Unlike many Net startups, Tiscali's shares are way above their IPO level. Soru went public at $50 a share in October and is still up 1,050% following a 10-for-1 split. (The shares, which would be $576 pre-split, are now trading at $57.60.) The pre-split share price peaked on Mar. 1 at $1,304 a share.

Soru recently spoke in Milan with Rome Bureau Chief Gail Edmondson about the company's strategy and the upcoming bid for a third-generation mobile license. Here are edited excerpts of their conversation:

Q: A shakeout is under way among Internet startups. What's Tiscali's strategy for remaining a key player?
A: The most important element is the need for scale. In the Net economy you incur costs for the first copy. Reproducing it costs nothing. Given this rule, either you expand or leave the game. There's a window of opportunity now to expand. Our strategy is to gain scale and be as European as possible. We are already ranked the No. 2 Internet service provider in Belgium. We're No. 2 in Switzerland. We have a good position in Germany and France. And we're starting up in Spain. With more than 2 million subscribers, we may well be the No. 2 ISP in Europe. [Germany's] T-Online is adding 200,000 subscribers a month. We are growing faster than that -- around 300,000 per month.

Q: How would you compare your strategy to WorldOnline or Liberty Surf?
A: We have infrastructure. It's an advantage to have the backbone. We can move to broadband and can implement new services because we control the technology. Having the infrastructure is fundamental to us.

Q: How can you win against competitors that have deeper pockets?
A: We can win with better, more innovative services. We want to be first in leading the charge. The Internet isn't a telecommunications tool, it's a new media. The idea is to enlarge the customer base and earn a little money from a huge number of customers. The game will be to earn money from advertising, like television. What you're really selling on the Net is the attention of the customer to industry. The fees for services will go very soon to zero -- in two or three years, or faster. By 2002, advertising and e-commerce will be 50% to 60% of Tiscali's revenues. It's just taking off. We started from nothing this year and in the last two months have seen advertising revenues jump to $1.5 million.

Q: How can Tiscali afford to compete for a third-generation cellular license [UMTS] when the bidding war in Britain has raised the ante in other European countries now to several billion dollars?
A: What is happening in Europe is totally wrong. Governments will change their view in the near future. The license for third-generation is not like the license for GSM [a previous cellular technology]. If access to the Internet had remained in the hands of a couple of oligopolistic companies, it wouldn't exist. The government will eventually be forced to require an open platform and give access to all players. This isn't a market for a few companies. I'm sure in a couple of years all networks will be open.

Q: What happens if Tiscali doesn't win a third-generation cellular license?
A: We will make a deal as a virtual network operator that will allow us to use the Net -- like the deal Virgin did with One-to-One.

Q: Is there a risk that the high cost of third-generation cellular licenses will stunt the market for mobile Internet in Italy?
A: With the cost of licenses so high, Italy will not enjoy the same growth it could have had in mobile Internet. The question is whether it's more important to raise money for state coffers or have a high Internet penetration [for economic growth]. Each point of Internet penetration represents an added percentage point of gross domestic product.

Q: Do you need to raise more capital?
A: We would like to make a capital increase. But we don't have a high burn rate. We lost $1.3 million in 1998 and $7 million in 1999.

Q: How fast is Tiscali growing, and how many subscribers do you forecast Tiscali will have by yearend?
A: Since Jan. 1, subscribers are up by 90%. By yearend we will have more than 4 million Europewide, with between 2.5 million and 3 million in Italy.

Alexander Straub (int'l edition)

Alexander Straub, the 27-year-old co-founder of e-business Mondus.com, squeezes the most out of his summers. The year he turned 20, he honed his competitive edge by sailing for his native Germany in the Barcelona Olympic Games. Later, while he was pursuing advanced degrees at Cornell University and Stanford University, he put in a summer stint at McKinsey & Co. Then, as a Rhodes Scholar at Oxford University, a summer job in London at Goldman Sachs International helped him get a grip on finance. It was while he was at Goldman that he and his Iranian-born classmate Rouzbeh Pirouz drew up plans for Mondus.com.

Just a year-and-a-half later, Straub has a business-to-business phenomenon on his hands. Mondus.com, a global marketplace where customers and suppliers seek one another out, now boasts 80,000 registered users in the U.S. and Europe, with hundreds more signing up every working day. Companies come to Mondus looking for a specific part, and the Web site links them up with a supplier, taking a sliver of the transaction price as a commission. From two graduate students only a year ago, Mondus.com now employs 120 workers.

Unlike their peers in Silicon Valley, Straub and Pirouz needed a break to get investment pouring in. That came in 1999, when they entered and won a Sunday Times of London entrepreneurship contest for their Mondus.com business plan. With their $1.7 million prize--a startup investment from venture-capital company 3I and the newspaper--Straub and Pirouz launched their venture.

But Straub, who handles the strategic side of the company while CEO Pirouz runs it, had his eyes on a bigger market than Europe. Wasn't its name, after all, the globally inspired Mondus? He went to work raising more venture funds. Even as Mondus was shopping for its first office, in Oxford, Straub landed an additional $15 million from Eden Capital and Zouk Ventures. The duo launched Web services in October, 1999, opening offices in Frankfurt, Oxford, Paris, and New York.

These days, Straub spends most of his time in New York. ''If you're going to win, you have to win in America,'' he says. There's an initial public offering on the horizon, says Straub, who has strong ideas about how to launch an IPO. His summer at Goldman Sachs will serve him well.

ONLINE ORIGINAL: "If You're Going to Survive, You Have to Be Strong in America"

Alexander Straub, 27, is co-founder of Mondus.com. The business-to-business online marketplace, founded just a year ago, has raised $87 million in venture financing. With offices in Paris, Frankfurt, Oxford, and New York, Mondus now employs 120 people. Business Week Paris Correspondent Stephen Baker recently spoke with Straub. Here are edited excerpts of their conversation:

Q: How did you start this company?
A: We [he and CEO Rouzbeh Pirouz] were two students at Oxford. We had this idea for a business-to-business marketplace, and when the [London] Sunday Times had a Technology Catapault Competition, we won. That was in spring of 1999, and it got us $1.7 million in startup financing.

Q: What's the idea of the business?
A: We get small and midsize businesses coming on the site looking for suppliers or customers. We help them find them and take a commission. We have 80,000 businesses already registered as users, and 600 a day are joining. Take a printer in Cologne. He could sell in Berlin, but he doesn't know about marketing costs, sales, and distribution there. When you ask him today, it's something he doesn't even think about. We have to educate, educate, educate.

Q: Educate in Europe, and in the U.S.?
A: For our space, in small businesses, Europe is not behind. The growth curves on business-to-business e-commerce are the same as in America.

Q: You're German, but you're living in New York. Why's that?
A: Actually, I jet back and forth all the time. But if you're going to survive in this market, you have to be strong in America.

Q: Who's your competition?
A: In Europe, we don't have any competition yet. In America, it's Onvia.com. Then there are companies like Ariba. But they're actually quite different. They have 100 fairly big businesses. We have 80,000 smaller ones. Our business is absolutely free. The only way we make money is that we charge the vendor on a successful transaction.

Q: Is there anything like Silicon Valley in Europe?
A: No. In Silicon Valley people work in killer teams, and new companies grow out of the bloodstream of the not-yet-mature companies. There are generations and generations in the Valley. There's also a difference in venture capital. In Europe, the VCs give money but don't add value. They've taken too many companies, and they're keen for an exit to build their record.

Q: How about cultural differences between Europe and the U.S?
A: Europe uses mobile phones, Americans use laptops. Try to find a power plug in a European airport. They don't have them. In Europe, I'll be the only person working on a laptop in the plane. That's not the case in America.

Martin Velasco (int'l edition)

Europe's New Economy has spawned hundreds of serious investors in technology startups where there once were none. But Spaniard Martin Velasco is way ahead of most of them. Since 1995 he has put money into more than 20 companies, including Spanish star Terra Networks, which now boasts a market cap of $15 billion. So far, he counts an average gain of 50% on his investments.

Velasco is one of Europe's leading business angels--guardian angels of sorts, who give seed capital and strategic advice to entrepreneurs in return for a stake in their companies. He's a big believer in Europe's ability to challenge the U.S. in technology. ''The Internet has no barriers to entry,'' he says. Europe has ''the creativity, energy, and know-how'' to create global winners in an information-driven economy, he adds.

No stranger to bits and bytes, Velasco studied electronics and computer science in Lausanne, and earned an MBA from Fontainbleau-based INSEAD. After eight years as a partner with McKinsey & Co. building its worldwide telecommunications practice, he launched his own consultancy focused on telecoms, and advised such companies as Telefnica. Three years ago, he shut that down to focus full time on investing. Now he circles the globe four times a year to keep abreast of fast-moving technologies and competition.

But Velasco, 45, is more than a hard-nosed investor. He spends a third of his time on civic and philanthropic interests. He's helping to develop global rules for e-commerce and has sponsored conferences to highlight tech startups in Spain. Through such efforts, Velasco is doing his part to foster a New Economy in his native country as well.

Karl Matthäus Schmidt (int'l edition)

Germany used to be a financial desert as far as private investors were concerned. People wanting to trade stocks had to pay their brokers a full 1% of the transaction value. The clearing and settlement system was slow, and stock market information was in pitifully short supply.

Then Karl Matthäus Schmidt had a brainstorm. Having just completed business studies at Nuremberg University, he looked across the Atlantic to discount brokers such as Charles Schwab Corp. Why couldn't he combine Internet technology with high-quality stock market information to give investors a cheap, reliable way of trading securities? In 1994, Schmidt set up ConSors Discount-Broker in Nuremberg with $5 million in capital provided by SchmidtBank, the family bank his father runs. Germans flocked to the new system, especially after a popular equity culture began to develop following the privatization of Deutsche Telekom in 1997. ''ConSors made direct brokerage popular in Germany,'' says Ralf Dibbern, banking analyst with M.M. Warburg & Co., the Hamburg private bank.

Indeed, banks such as Commerzbank and Deutsche Bank hurried to set up their own discount brokers. But even now, ConSors handles more trades than any other online broker in Europe. Only Commerzbank's Comdirect has more customers. ConSors' first quarter pretax profit of $8 million was well above the $5 million posted in the same period last year.

Schmidt, 31, comes from a line of bankers stretching back six generations. He took ConSors public last year, selling 25% of its stock on the Neuer Markt. The $360 million in proceeds funded expansion at home and abroad. ''We also wanted the publicity in order to establish our brand name,'' says Schmidt. On the day of the IPO, he rigged up black flags at half mast in mourning for the big German banks. Meanwhile, scantily dressed models riding on ''cyber surfers'' brought Frankfurt traffic to a halt.

With a market cap of almost $4 billion, ConSors is Germany's fifth-largest private bank. ''Being first is a big strategic advantage when it comes to the Internet,'' Schmidt says. Now, he's trying to build on that lead by competing in online insurance--perhaps more good news for European consumers.

ONLINE ORIGINAL: "Germany Used to Be a Desert for Private Investors"

Life used to be tough for private investors in Germany. People wanting to trade stocks had to pay their brokers a full 1% of the transaction value. The cleraing and settlement system was slowm and stock market information was in pitifully short supply.

Then along came Karl Matthäus Schmidt with a brilliant idea. By combining Internet technology with high-quality stock market information he could give investors a cheap, reliable way of trading securities. In 1994, Schmidt set up ConSors Discount Broker in Nuremburg. Germans flocked to the new system and ConSors grew rapidly. It is now moving into France, Spain, and Italy, and has already become the leading online brokerage in terms of trades handled in Europe. Business Week Frankfurt Correspondent David Fairlamb recently spoke Schmidt. Here are edited excerpts of their conversation:

Q: What inspired you to set up ConSors?
A: Germany used to be a desert for private investors. They had to pay the established banks a lot of money for a poor, slow service. I discovered this firsthand when I was at University here in Nuremberg. I was a member of an investment club and used to think, "Why should we have to pay so much to process a transaction?" I decided there was a gap in the market, and that's where the idea for ConSors came from.

Q: Setting up in competition with big, established banks must have been difficult. Where did you get the money from?
A: Well, I belong to a family of bankers that goes back six generations. I was able to persuade my father who is chief executive of Schmidt Bank, the family private bank, that my idea was sound. They backed me with about $5 million.

Q: It seems odd for the scion of an old private bank to be setting up an ultramodern Internet-based bank.
A: Private banks have to adapt with the times. That explains their success. Schmidt Bank saw that ConSors could be very successful and they were right. It was a very good investment for them.

Q: How quickly did ConSors get established?
A: We founded the bank in 1994 and quickly attracted a lot of customers. But it was after the German stock market took off and a popular equity culture began to develop that we really made it big. You can date that to 1997 and the privatisation of Deutsche Telekom, which really caught people's imagination. Since then, of course, the stock market has risen dramatically, and there has been an upsurge of interest in investing among Germans.

Q: But are you able to cope with the demand? I understand you have recently had some technical problems because volumes are too big for your system.
A: We haven't had problems on the trading front. Trading is done over the Internet, and there are no volume problems there. We did have some problems setting up new accounts last year. We had so many new customers that our system was overwhelemed. We've straightened them out now.

Q: Tell me about your flotation.
A: We took ConSors public last year when we listed 25% of the stock on the Neuer Markt. It was a great success, with lots of demand for our stock. The timing was just right. I'm glad we didn't leave it until this year when things might have been tougher. We didn't do the flotation just as a way of raising money. It also helped us establish our brand name and bring in more customers.

Q: What did you use the money from the flotation for?
A: We've been expanding in France, Spain, and Switzerland, and we have plans to move into Italy through a joint venture later this year. So we've used much of the money to finance that.

Q: How is the move abroad going?
A: Good so far. We're already the fourth-largest online broker in France after just six months. We are the biggest online broker in Europe, with 376,000 customers. We handled 4.4 million orders in the first quarter.

Q: What about Britain?
A: Well, we'd like to go in there, probably through an acquisition. But it is a very expensive market, and there is nothing that justifies the price around at present.

Q: There's a lot more competition around now than there used to be. A lot of the old banks have set up online broking services. Commerzbank subsidiary comdirect now has more customers than you, though you handle more trades. Can you still maintain your edge?
A: I certainly think so. There is a big strategic advantage that comes from being the first into the market and having an established name. We are also putting a lot of resources into marketing. On top of that we are moving into a number of other areas in order to build up a broad online financial-services company. For example, we have moved into online insurance. We think we are smart enough to stay ahead.

Philippe Camus (int'l edition)

It may have an ungainly name, but when the European Aeronautic Defense & Space Co. takes flight this July in a multibillion-dollar initial public offering, the Old World will finally have a player able to deal as an equal with the likes of U.S. aerospace giants Boeing Co. or Lockheed Martin Corp. Combining France's Aerospatiale-Matra, Germany's DaimlerChrysler Aerospace (DASA), and Spain's CASA in the largest cross-border industrial merger in Europe's history, EADS will have $21 billion in sales. ''The whole sense of EADS is to carry the same weight as the American groups,'' says co-CEO Philippe Camus. ''It's more and more of a global market.''

EADS represents a personal triumph for the mild-mannered but intense Camus, who will run the company with DASA CEO Rainer Hertrich. Camus, 52, was instrumental in the on-again, off-again secret talks with DaimlerChrysler and the French government late last year, which led to the EADS merger. But Camus, a key figure in French aerospace since joining the Matra missile group in 1982, never lost faith that a deal could be hammered out.

The jewel in the crown of EADS will be its 80% stake in Airbus Industrie, which will now switch from a marketing consortium to a real corporation. That should help Airbus, already neck-and-neck with Boeing in the race for new jet orders, to further boost its competitiveness, Camus says. You can be sure that Europe's Mr. Aerospace will be leading the charge.

ONLINE ORIGINAL: "It's a Lot Easier to Pull Off a Merger...When Things Are Going Well"

Philippe Camus, the CEO of France's mighty aerospace group Aerospatiale-Matra, is about to move on to even greater things when the European Aeronautic Defense & Space Co. becomes a reality in July. EADS, a merger of Aerospatiale-Matra, Germany's DaimlerChrysler Aerospace, and Spain's Casa, gives Europe its first shot at challenging the giant American aerospace groups like Boeing and Lockheed Martin. EADS will control not only 80% of Airbus but also have leading positions in missiles, helicopters, and military transporters. Camus, the designated co-CEO of EADS, spoke in Paris to Business Week European Regional Manager John Rossant. Here are edited excerpts of their conversation:


Q. The experience of the big aerospace mergers in the U.S. -- Boeing and McDonnell Douglas, Lockheed with Martin Marietta -- has been somewhat disappointing, suggesting that big may not always be beautiful. Should this set off alarm bells in France and Germany?
A: There is an important difference between the U.S. and Europeans. In civilian aerospace, Boeing and McDonnell Douglas competed frontally. So they had two completely developed research and development units. It meant very heavy costs. Airbus was then able to take the market share of McDonnell Douglas. It was spectacular. At Airbus, the principle has always been that partners specialize, so there was much less overlap. Furthermore, unlike the period when Boeing and McDonnell Douglas merged, Airbus is in very good form. It's a lot easier to integrate your activities and pull off a merger when things are going well.

Q: Some say that the next step for EADS could involve an agreement or even merger with a leading U.S. group, like Lockheed.
A: I don't at all believe in a merger. American public opinion is not ready for defense cooperation. But we do have various areas of possible cooperation with Lockheed, and there are joint working groups. Now that EADS exists we can finally have balanced cooperation between U.S. and European groups, which wasn't possible in the past. Cooperation can be by sector or by program, but neither side is ready for a merger.

Q: Isn't the EADS setup of co-chairmen and co-CEOs clumsy and unworkable in the long run?
A: No. The duality is only at the top, between [DASA CEO Rainer] Hertrich and me. Below it doesn't exist. There's one head of marketing, one CFO, etc. The idea is that Hertrich and I meet or speak twice a week, and we've introduced a system in which German top managers report to me and French top managers report to Hertrich. Then the Spanish as the third party bring a kind of stabilizing influence on the thing.