Airbus core earnings up despite €1bn military aircraft charge

Update:

The chief executive Tom Enders, who has previously described the A400M as “mission impossible,” said on Wednesday that the model remains a major concern given steep penalties for late deliveries and fresh issues with meeting promised performance specifications. That means Airbus has no choice but to go back to the aircraft’s purchasers and plead for “mitigation”, he said.

“Customers must help stop the bleeding,” Mr Enders said, adding that capping risk and strengthening the A400M are key priorities this year.

While the model entered service five years late in 2013, it has continued to endure setbacks. One aircraft crashed on departing the factory in 2015 after three engines experienced power freezes, killing four people, while last year saw the discovery of cracks and issues with the plane’s propeller gearbox that Airbus has addressed with an interim fix.

Further concerns have emerged regarding the military capabilities of Europe’s biggest ongoing defense programme, so that the withholding of payments will weigh on the programme into 2018, the company warned.

The European aerospace group Airbus took a new €1 billion (Dh3.86bn) charge for its troubled A400M military aircraft programme as it posted higher than expected core earnings and revenues for 2016.

The company, reporting for the first time as Airbus and with a new financial format after ditching the Airbus Group brand in a revamp that recognises the dominance of its civil business, said “adjusted” operating income fell 4 per cent to €3.95bn on revenues which rose 3 per cent to 66.58bn.

Its results had been buoyed by a last-minute surge in civil jetliner deliveries.

Analysts were on average expecting a 7.3 per cent drop in full-year operating earnings before one-offs to €3.83bn on sales up 0.7 per cent to €64.91bn.

* Reuters

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