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Last Updated: Wednesday, 8 November 2006, 09:33 GMT
Airbus woes hit parent firm EADS
Airbus A380
The giant Airbus A380 has been a drag on EADS's profits
Airbus-owner EADS has reported a net loss for the July to September period after it was hit by problems with its giant A380 passenger jet.

EADS reported a net loss of 195m euros ($250m; 131m) during the third quarter, against net income of 279m euros in the same period last year.

The Franco-German defence and aerospace firm said charges relating to delays with the A380 had cost it 1bn euros.

On Tuesday, Fedex ditched an order for the plane in favour of rival Boeing.

The US logistics firm said it was cancelling its order for 10 Airbus A380-800F superjumbo freighters because of delivery delays, and was ordering 15 Boeing 777 freighters instead.

EADS said it was awaiting decisions from two other Airbus A380 freighter customers, UPS and International Lease Finance Corporation, on whether they intended to go ahead with their orders.

'Drastic measures'

"The struggle to reverse the A380 problems imposes a severe burden on our financial performance," said EADS co-chief executives Tom Enders and Louis Gallois in a joint statement.

"This, together with the dollar devaluation, requires drastic measures to remain competitive," they added.

"Therefore the Power8 (cost-cutting) programme in Airbus and structural streamlining of the group has top priority."

On a nine-month basis, pre-tax earnings before exceptional items fell to 1.39bn euros ($1.78bn; 933.5m), down from 2.1bn euros during the same period in 2005.

Despite the problems at Airbus, EADS said its sales had increased by 17% to 27.5bn euros during the nine month period.

"Based on the expectation of 430 Airbus aircraft deliveries in 2006 and strong contributions from its helicopters, defence and space businesses EADS is set to achieve revenues of well above 37bn euros for the full year," the company said.




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