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Airbus owner hit by drop in plane orders

AIRBUS parent company EADS yesterday said its first half profits had tumbled as orders for its aircraft slumped.<br /><br />The firm said profits in the period were down 23 per cent to &euro;888m (&pound;766m) and warned it might have to pay penalties because of delays to its A400M military aircraft.<br /><br />The company said its net cash position of &euro;8.1bn was a &ldquo;strong asset&rdquo;, but wrote down the value of its A400M military aircraft project by &euro;191m, after it missed a deadline to get the planes flying by 31 March.<br /><br />Airbus has said that if the seven countries which are backing the project pull out, it will cost EADS &euro;5.7bn. The countries, which include the UK, said last week they will continue to provide financing, but will impose fines for missing the deadline at the end of the year.<br /><br />&ldquo;Due to the continuing high level of uncertainty on the programme, EADS retained the early stage accounting treatment of this programme,&rdquo; the company said. <br /><br />&ldquo;Substantial negative income statement impacts may still have to be booked in future periods depending on the progress of the development and the outcome of the negotiations on the A400M programme.&rdquo;<br /><br />Orders for its commercial aircraft were down to &euro;17.2bn from &euro;51.2bn a year earlier.<br /><br />Airbus delivered 254 aircraft in the first half, up from 245 a year ago. Last year, the company delivered 483 aircraft &ndash; a record figure which beat its main rival Boeing.<br /><br />EADS said its order book was &ldquo;overbooked in the coming years&rdquo;, but it has only had 90 orders so far in 2009.<br /><br />But it stuck to its order forecast for the year, saying it expects up to 300 new Airbus orders in 2009, although it conceded said the goal would be &ldquo;challenging&rdquo; in the downturn.