EADS and Airbus sales rocket

Demand for Airbus planes has boosted EADS sales

European aerospace giant EADS has reported sales up 33% to 14.4bn euros ($12.8bn; £9bn) in the first half of the year, fuelled by demand for aircraft built by its Airbus subsidiary.

European Aeronautic Defence & Space (EADS) repeated its full year sales forecast of 20% growth, issued on Tuesday because of its falling share price, and said it expected a 15% rise in operating income.

The company added that it might exceed the forecasts if the US dollar stays at current levels for the rest of the year, assisting it in competing with its main rival Boeing of the US.

EADS shares jumped about 2% in early trade, after falling earlier this week when Airbus revised downward its 2003 delivery targets.

By late afternoon in Paris, the shares were at 21.36 euros, up 0.26 euros on the day.

Airbus takes off

New orders during the first six months reached 42.8bn euros, bringing the group's total backlog to 185bn euros at the end of June, a 56% rise since June 2000.

Airbus had first-half sales of 9.98bn euros compared with 6.82bn euros last year, an increase of 46%. It delivered 162 aircraft, up from 145 last time.

Orders for 67 A380 super-jumbos have been received and Airbus expects that to rise to 100 by the end of the year.

The commercial aircraft business has benefited in recent years from the explosion of international travel, bringing a wave of replacement orders from airlines.

Slowdown?

Now, though, some fear the global economic slowdown will expose overcapacity at the two main manufacturers, Boeing and EADS.

EADS chief executive Rainer Hertrich accepted that airlines are looking to cut costs, which could impact his company.

But he told the BBC's World Business Report that the company had a strong order book of about 300 planes, with Boeing on about 150.

That should safeguard the timetable for the A380, he said.

"Especially in these times where cost savings are asked and demanded by the airlines the A380 will be the right offer, so we stick to our time schedule," he said.

"The first flight will be 2004, with the first deliveries entering into service in 2006."

EADS reports profits for the first half of this year on 20 September.