Weaker dollar hits Airbus owner

Production costs for the delayed A380 are over budget

European aerospace giant EADS, the owner of Airbus, lost 87m euros ($130m; £78m) in the third quarter of 2009 as the weak US dollar hit its results.

The loss compared with a 679m euro profit it made in the July-September quarter a year ago.

EADS has also seen orders for its aircraft fall in the economic downturn.

Most of the firm's costs are paid in euros but most of its aircraft are paid for in dollars, so a weak dollar against the euro eats into its profits.

"The long-term dollar level is an important driver for EADS' earnings power over the coming years," the company said.

Reviews underway

The firm also warned that its fourth quarter earnings could be hurt by charges relating to its delayed A400M and A380 programmes.

Earlier this month, South Africa cancelled a multi-billion dollar contract for eight A400M military aircraft, citing escalating costs and delivery delays.

The A400M had been due to fly for the first time in March this year, but has suffered technical problems.

"New programmes require our utmost attention," said Louis Gallois, EADS chief executive.

"Regarding A400M, we are working with our customers to reach an acceptable solution for all parties and to put this programme on a solid long-term footing. Additionally, the A380 programme is still a matter of concern; industrial and financial reviews are underway."

Talk of recovery

EADS maintained its estimate of up to 300 gross aircraft orders in 2009 and said it expected to deliver about 490 aircraft this year.

Meanwhile, at the Dubai Airshow, both Airbus and Boeing forecast a recovery in demand next year.

Airbus's chief operating officer, John Leahy, said the market was showing signs of improving, adding there was no longer talk of cancellations and deferrals.

Boeing's Randy Tinseth, marketing chief for commercial planes, said 2010 would be a year of recovery and airlines would return to profitability in 2011