Airbus secured fewer orders for new planes last year than its rival Boeing for the first time since 2000.
The troubled planemaker said it won 824 new orders last year, down from 1,111 in 2005, and below Boeing's 1,050 haul.
Delays to its flagship A380 plane - which have left the project two years behind schedule - are set to push Airbus to an annual loss for 2006.
Airbus boss Louis Gallois said the delays had been a "major shock and disappointment" to shareholders.
Mr Gallois, who is also co-chief executive of EADS - Airbus' parent firm - said it was doing everything it could to rebuild confidence in its position among customers and investors.
Orders for all categories of plane fell, with the number of single-aisle planes ordered down from 918 to 673.
The number of orders for A380s fell from 20 to 17.
Delays to the A380 have already cost the firm more than $6bn (£3.3bn) and Airbus warned there could be additional charges to come.
Despite being overtaken in terms of orders, Airbus delivered more aircraft than Boeing last year.
It delivered 434 planes to customers, 36 more than its rival.
The figure, the firm's second best annual performance in its history, was described as "excellent" by Mr Gallois.
But EADS shares were down 2.8% in early afternoon trade on the Paris market as investors focused on the slump in orders and the possibility of further cost-overruns on the A380.
EADS said "additional A380 charges not originally envisaged" were one factor likely to push Airbus into the red for the past financial year.
In addition, it said costs relating to settlements with customers and the reduced value of assets were likely to be included on its balance sheet in 2006 rather than next year.
Several leading airlines have warned that they might cancel orders for the giant A380 plane as a result of production delays.
The first A380 will now be delivered to Singapore Airlines in October, 20 months after the carrier had intended to start services.
AIRBUS ORDERS AGAINST 2005
Single aisle planes: 673 (918)
A330/340/350: 134 (166)
A380: 17 (20)
Mr Gallois said the recent decision by US and EU regulators to certify the A380's airworthiness was testimony to its "technical integrity".
But, he added that Airbus was now embarking on a major efficiency drive to become "leaner and productive", a process which is expected to result in significant job losses.
"2006 was clearly a turning point for us. 2007 will be the year for Airbus to face reality and for it to implement all the measures necessary," he said.
"What we want above all is to restore confidence with our customers and our suppliers by delivering on promises."