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Airbus parent posts loss of $1.01 billion

March 10, 2007|From the Associated Press

MUNICH, GERMANY — Major delays to Airbus' A380 super-jumbo jet that led to a $1.01-billion fourth-quarter loss made 2006 the worst year in European plane builder EADS' history, its co-chief executive said Friday.

"It is clear ... it was the worst year for Airbus in its life," Louis Gallois said at European Aeronautic Defense & Space Co.'s annual news conference in southern Germany.

The comment came after Amsterdam-based EADS said a weaker dollar and major delays at its Airbus unit dragged down annual profit.

"We had big problems, as everyone knows," co-CEO Tom Enders said. "This company needs more innovation, more focused innovation."

But he said the problems at Airbus would continue to be felt through 2007 and warned that the company would post another substantial loss this year.

EADS lost 768 million euros ($1.01 billion) in the fourth quarter, compared with a profit of 405 million euros a year earlier. Sales during the quarter, however, were up 11% to 11.96 billion euros ($15.73 billion).

"We do not think these results are OK," ABN Amro, a Dutch financial services firm, said in a research note to investors.

EADS said the effects of a series of management and financial crises, including a two-year delay to the double-decker A380 super-jumbo jet, and charges at its A350 XWB program had hurt fourth-quarter profit. Adding to that were higher research and development costs, EADS said.

Officially launched in December, the A350 XWB program promises better fuel-efficiency and greater use of composites than the earlier version of the plane, but with later availability.

Finnair has agreed to order nine of the planes, and Airbus is in talks with other airlines about converting 93 outstanding A350 orders for the wide-body model.

But the new Airbus jet is five years behind its rival, Boeing Co.'s 787 Dreamliner. Chicago-based Boeing already has notched up 464 firm orders as it prepares to begin building the plane in the second quarter, with the first flight scheduled for August.

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