£5bn Airbus bills made BAE sell up

Because of recent problems and over-spending, BAE Systems have decided to withdraw their 20% stake in Airbus's new projects. Additional costs have been linked to research and development for the Airbus and for extra spending on a new military transporter. BAE's decision came last week along with the announcement that Singapore Airlines, the world's 2nd-biggest carrier, will be redesigning one of their planes to compete with Boeing's 787. The article states that BAE calculated the future financial performance of Airbus and as a result came their decision to "get out."

According to class discussion, the money BAE has already put into the Airbus should be initially ignored. What this article lacks is the estimated total benefit the Airbus will create in regard to the total costs it will incur. BAE would be justified in their withdrawl from this project if the marginal cost of funding this plane were greater than the expected benefits. Without such information I find it hard to fully justify BAE's decision to cut it's funding.