Airbus Maker EADS Returns to Profit in 2008

CEO says company made significant headway in reshaping itself

European aerospace group EADS, maker of Airbus planes said on March 10 it was ready to deal with the crisis faced by client airlines despite a mixed outlook for 2009, after reporting a 2008 net profit of 1.57 billion euros (US$1.99 billion).

"We made significant headway in reshaping the company," EADS chief executive Louis Gallois said. In 2007, the problem-plagued group posted a loss of 446 million euros. EADS is now "in a good position to face the crisis" that has slammed the air transport industry even though it had "a low level of visibility for the second half of 2009 and beyond" as the economic slump cuts demand.

EADS also acknowledged difficulties with its A400M military transport plane but Gallois said: "Even if the A400M program required enormous attention, the group has regained stability in 2008 and is proving to be resilient in the face of the turbulent global economic environment." The A400M has been hit by delays and its first flight was postponed to an undetermined date because of problems with its engines. The program "could lead to a significant charge" on core earnings this year, the statement said. The project is running more than three years late and cut just over 700 million euros from EADS earnings in 2008.

But the group expects Airbus to win 300-400 new orders this year despite deteriorating economic conditions and falling airline traffic.

Last year, Airbus delivered a record 483 aircraft to customers, including 12 A380 super jumbos, the world's biggest passenger jet, while the Eurocopter unit reported record deliveries of 588 helicopters. The A380, however, has suffered numerous technical problems, forcing delays for customers and extra costs for Airbus.

EADS said it "is carefully monitoring the market, its customer base and its suppliers," many of whom are struggling to obtain financing.

Gallois said "2009 will be a very challenging year" but pointed to EADS's wide range of products and added that thanks to a "large and well diversified order book, 2009 deliveries should remain at high levels."

In addition to Airbus and Eurocopter, EADS makes rockets, satellites and defence communications systems. Sales climbed 11% to 43.3 billion euros despite the airline industry slump.

EADS said operating profit would likely decrease this year but still be "significantly positive."

In late February, EADS decided to fold its military transport unit into Airbus and create Airbus Military to take charge of all military transport programs. The group has named Spanish engineer Domingo Urena-Raso, a former head of industrial strategy at Airbus, to lead the new unit.

Copyright Agence France-Presse, 2009

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