Airbus takes new hit on military aircraft

Airbus

Airbus has taken a €1.3 billion (£1.2 bn) charge on its troubled A400M military transport aircraft, bringing the total of charges in the project to more than €8bn.

The A400M has had setbacks over the years, more seriously in an accident during a test flight in Spain in 2015, which led to the death of the four members of the crew.

The aerospace group reported better than expected 2017 profit of €4.3 billion, against €3.9 million in 2016.

The shares of the company rose by about 8% after the results were published.

Revenues were “stable” at €66.8 million to € 66.6 million euros.

In its statement, Airbus said deliveries of aircraft had been “offset by a reduction in income of around €2 billion from the perimeter of the changes”.

Last week, Airbus reached a provisional agreement with seven European NATO buyer countries over delays in deliveries of the A400M.

Airbus chief executive Tom Ender, said in a conference: “We have been in permanent crisis management of the last two or three years.”

He said in the results statement: “On the A400M, we have made progress in the industrial and the capabilities of front and agreed to return to bottom-line with the government customer that will significantly lower the rest of the program risks. This is reflected in a substantial part of a charge.”

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Airbus said it expects to deliver around 800 commercial aircraft in 2018 if the engine manufacturers live up to their commitments.

If you do not hit the targets of delivery, said that he was going to see profits increase by about 20% this year.

Last month Emirates airline announced an order of up to 36 Airbus A380.

The $16bn (£11.5 bn) deal was effectively a reprieve for the A380 after Airbus threatened to stop making the jet if it could reach an agreement with Emirates.

In his statement of the results of Airbus, said Emirates, the Airline of the final order that “the increasing visibility in the A380 program for the coming years.”

Analysis: Theo Leggett, reporter of business

The A400M was intended to be the flagship of Airbus military of the fleet, but the program has been dogged by seemimgly endless delays, technical problems and what the chief executive, Tom Enders, has been described as an “imperfect contract the installation program”.

As a result, the great tower has ended up being a financial dead weight in the company. The new scripture of € 1.3 bn, taking the total so far to more than €8bn.

That is not the only issue that causes concern. The company is the subject of ongoing corruption investigations in the united kingdom and France, through its use of intermediaries in the main planes of offers; now it seems that the us authorities are taking an interest.

With the chief operating officer, Fabrice Bregier, step-by-step down and the upper part of the salesman, John Leahy to retire, the company is already in a state of flow management and Tom Enders, is also about to come out next year.

But, on the positive side, Airbus ‘ order book is still full to bursting. It has even succeeded in registering a new order for the problem of the highest potential A380 – enough to keep the line of production for another decade. And the benefits are growing. So it’s not all bad news, far from it.