EADS chief says Airbus may cut output again in late 2010

2009/11/16

European aircraft maker Airbus may cut production further in the second half of next year, Louis Gallois, chief executive of parent company EADS, said in Dubai on Monday.

“We may have to adjust output. We cannot rule it out. For the moment, we do not have the information on which to base such a decision,” he told reporters at the Dubai Airshow. Gallois also said he hopes talks with European partner countries on the delayed A400M military transport plan will be completed by the end of the year.

EADS (the European Aeronautic Defence and Space Company) might consider acquisitions in the United States, though they would only be of modest scale, he said. Visibility is good on aircraft deliveries scheduled for the first half of next year but it is weaker for the second half, the chief executive said.

If the aircraft maker wants to adjust production it has to make a decision four months ahead for the A320 family of short-haul planes and six months ahead for the A330 and A340 long-haul models. “But we try to make it as quickly as possible (to help) our suppliers,” Gallois said.

In October, Airbus cut the production schedule of A320s to 34 from 36 a month and froze output of A330 and A340 jets at 8.5 a month. Initially, it had planned to step up production of the long-haul planes to 10 a month by the start of 2010.

Asked about how many aircraft Airbus expects to deliver next year, Gallois said that “at the moment” he “does not expect a reduction.” This year Airbus forecasts it will deliver 490 planes.

The A400M is three years behind schedule and Gallois said: “We want negotiations to finish by the end of December. This period of uncertainty makes it difficult for management.” In July defence ministers from the seven partner countries — Germany, France, Spain, UK, Turkey, Belgium and Luxembourg — decided to give the A400M project a fresh chance and to open new talks with EADS.

First deliveries should have taken place this year but engineering and management problems have hindered development. “We do not rule out modest-sized acquisitions. Targets in the United States are better because of the weak dollar, it gives us a bit of scope,” Gallois told journalists.

He said the companies EADS might go for might cost a bit more than PlantCML, a Californian emergency communications specialist which the European group bought for 350 million dollars last year.

EADS on Monday announced that in the three months to September it made a quarterly net loss for the first time in two years. It said it cannot forecast the level of full year operating profit because of persistent problems with its spearhead projects. -- AFP