Airbus posted stronger-than-expected nine-month earnings yesterday, muted by a resurgence of potentially costly delays for Europe's A400M troop carrier.
Europe’s largest aerospace group said nine-month operating earnings before one-off items rose 12 per cent to €2.6 billion, sending its shares up more than 3 per cent initially.
Finance director Harald Wilhelm said the civil aerospace industry continued to weather economic uncertainty as airlines order more efficient new jets, bringing in a slew of deposits that contributed to surprisingly strong cashflow.
“We are not concerned about the market, as was very much talked about earlier this year,” he said. “There is a very healthy booking situation and very healthy backlog.”
Airbus reaffirmed forecasts for the year but introduced a caveat over the possible impact of new production and delivery delays on Europe’s largest defence project, the A400M.
It cost €20 billion to develop the manoeuvrable cargo and troop carrier for seven European nations but delays and cost overruns led to a €3.5 billion public bailout in 2010.
The A400M has been deployed by French forces in Mali, but Airbus said there had been delays in adding advanced tactical features and refuelling on later aircraft, some of which will have to be retrofitted.
“Given our past history on it, the objective remains to avoid any incremental charge, but we are on the way to assessing it. If you ask me whether I can exclude it, I cannot say that this is the case, so it’s work in progress.”
Airbus has taken a total of €4.2 billion of provisions over the life of the stormy programme.
Airbus said the delays had triggered a clause allowing buyers to cancel from November 1st, but called this “highly unlikely” as it would need the support of all core A400M nations – Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.– Reuters