Cost overruns and delays in deliveries outdid record aircraft orders as European plane manufacturer Airbus reported an operating loss for the second year in a row, thereby sending parent company EADS's results into the red.
European plane maker Airbus made an operating loss of more than a billion dollars last year despite record orders for its aircraft, forcing parent company EADS into the red, company results showed Tuesday.
Airbus, struggling with cost overruns on its star A380 superjumbo project and delays with its A400M military plane, made an operating loss of 881 million euros (1.4 billion dollars), worse than the loss of 572 million euros in 2006.
The 2006 results were the first time the company had made a loss in its history.
EADS reported a net loss of 446 million euros for 2007, following a collapse in its profits in 2006, but the giant aerospace and defence group forecast a return to form this year.
Operating profits as represented by earnings before interest and taxes (EBIT) were forecast to be 1.8 billion euros against just 52 million in 2007.
Sales are expected to rise to "above 40 billion euros" against 39.1 billion euros in 2007.
As well as the operational difficulties with the A380 and A400M -- a programme for the midsized A350 plane was also relaunched -- Airbus and EADS struggled with the strong euro in 2007, which makes their exports less competitive on international markets and reduces margins.
Nevertheless, Airbus won 1,341 firm orders in 2007, slightly fewer than arch US rival Boeing, but higher than the European company's previous record set in 2005 of 1,055.
Airbus delivered 453 planes to customers, including the first of its A380s to launch client Singapore Airlines -- albeit about 18 months late.
The combined orders of Boeing and Airbus, which dominate the world market for passenger jets, were the highest in the history of the industry in 2007.
Late last month the US Pentagon defence department awarded an aerial refuelling tanker contract worth 35 billion dollars to EADS and the US group Northrop Grumman, instead of to US group Boeing, which has said it may protest the decision.
It was a stunning upset for Boeing, until now the sole supplier of air refueling planes to the US military.
Date created : 2008-03-11