Strikes May Harm Airbus' 2007 Delivery Targets

Airbus is at risk of missing 2007 aircraft deliveries if strikes at production facilities mainly in Germany and France continue.

So far, the strike actions in response to threatened job cuts haven't caused the aircraft maker to back off its 440- to 450-unit output target, but Hans Peter Ring, the EADS and Airbus CFO, warns that continuation of the labor turmoil could cause some deliveries to slip into next year. "We are on the critical path and close to being on the very critical path," he told analysts in commenting on EADS first-quarter financial results.

Strikes have already resulted in the loss of several work days, he notes. Plans to ramp up production of the single-aisle and long-haul lines should not be affected, though, he adds. First-quarter deliveries stood at 115 aircraft, compared with 101 for the same period last year (through April, deliveries stood at 153 aircraft and order intake at 158).

Restructuring costs of EUR688 million associated with the Power8 program have thrown Airbus's first-quarter earnings before interest and taxes (EBIT) into the red, at EUR69 million (US$93 million), compared with a positive EUR684 million result last year. For EADS as a whole, this year's first three-month EBIT was a positive EUR89 million (US$120 million), compared with EUR791 million the year before.

Other challenges loom for Airbus and its EADS parent in the rest of the fiscal year.