Airbus warns over super-jumbo sales

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The Independent Online

EADS, the parent company of Airbus, warned yesterday that sales of its new super-jumbo, the A380, would have to be 20 per cent higher than initially forecast in order for the programme to break even at current exchange rates.

EADS, the parent company of Airbus, warned yesterday that sales of its new super-jumbo, the A380, would have to be 20 per cent higher than initially forecast in order for the programme to break even at current exchange rates.

Airbus had said it would need to sell 250 of the 555-seat aircraft to cover costs. With the dollar, the currency in which commercial aircraft are sold, trading at $1.30 (67p) to the euro, the break-even sales figure is now above 300 planes. Orders for the A380 stand at 154.

It is the latest setback for the A380 following the disclosure last year that the cost of developing it could be $1.5bn higher than budgeted - bringing the final bill to $12bn.

Phillipe Camus, the co-chief executive of EADS who will leave the group in May, made the warning as the aerospace giant reported a 60 per cent rise in net profits to €1bn.

Airbus puts the total market for the super-jumbo at around 1,600 jets, including freighter versions, and believes the A380 will generate more than $175bn in sales in the first 15 years of production after it enters service in 2006. But Airbus's arch rival Boeing says demand for aircraft with more than 450 seats will not exceed 500.

EADS owns 80 per cent of Airbus while BAE Systems holds the remaining 20 per cent. The sharp rise in EADS's profits last year was largely down to Airbus where profits before interest and tax surged to €1.9bn as the European aircraft maker outperformed Boeing in sales and deliveries.

EADS said it expected Airbus to increase its lead over Boeing this year, but expects the weakness of the dollar to hold back revenue and profit growth with sales forecast to increase by 4 per cent to €33bn and earnings before tax and interest to rise 6 per cent to €2.6bn.

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