Aerospace giant EADS falls to earth

Nov 17 2009 by Iain Laing, The Journal

AIRBUS parent EADS has plunged to its first loss in two years amid lingering uncertainty over major aircraft programmes.

The aerospace giant lost £78m between July and September, compared with profits of £609m a year earlier.

The firm is being squeezed by a weaker dollar because its aircraft orders are in dollars, but most of its costs are in euros.

EADS said ongoing uncertainty over its A380 super jumbo and A400M military carrier aircraft programme left it unable to forecast the extent of the damage to full-year results.

The company expects to make underlying earnings of around £1.79bn this year but has already racked up £2.15bn in charges on the A400M project so far.

The scheme has been delayed by rising costs and technical problems, prompting the South African government to cancel its order for eight aircraft earlier this month.

The firm said it was in the difficult last phase of negotiations with its other customers for the aircraft, and added: “The full financial consequences of the delays will only be known once the negotiations are finalised.” EADS said the much-delayed A380 programme was also still a matter of concern. The company employs almost 6,200 staff in Broughton, Flintshire, to make the wings of the aircraft, as well as a further 3,600 at Filton near Bristol.