PARIS (Reuters) - Airbus parent EADS
took a charge of 158 million euros for the cost of overcoming wing
cracks on the A380 superjumbo as it posted better-than-expected
first-quarter results on Wednesday buoyed by resilient aircraft and
helicopter demand.
The move, following 105 million euros ($134 million) covered by an existing warranty provision,
reflects efforts by Europe's leading aerospace group to draw a line
under the episode in balance sheet terms but leaves Airbus facing a
potential drag on operating profit for the next two years.
The cracks on a
handful of fixing brackets inside the aircraft's wings were first
discovered in January and were blamed on a combination of manufacturing
flaws and the choice of materials.
Authorities ordered checks on the superjumbo fleet, but said the A380, in service since 2007, is safe to fly.
Airbus said on
Wednesday it had come up with a retrofit that would provide a long-term
solution to the problem. But it said this was more complicated than
first thought and went beyond the amount normally set aside for repairs
under warranty.
Applying the fix to
aircraft still in production will weigh on efforts to reduce A380
operating losses in 2012 and 2013 but should not derail the target of
breaking even on the plane "by the beginning of 2015", EADS said in a
statement.
The company also
said it would stick to a target of delivering 30 A380s this year, but
that this would be "more challenging" as deliveries are shunted towards
the latter part of the year. It delivered four superjumbos in the first
quarter.
Airbus has
acknowledged it may be grappling with the legacy of the cracks for years
but chief executive Tom Enders - who steps up to run EADS in June - has
pledged to root out the cause of the problem and move ahead as quickly
as possible.
Airbus meanwhile
said its key A350 mid-sized airliner project, which began first assembly
in April, was advancing while remaining "very challenging".
The headaches come as Airbus rides on a wave of commercial orders for jets that have also boosted rival Boeing .
EADS first-quarter
operating profit before one-offs doubled to 480 million euros as revenue
climbed 16 percent to 11.4 billion, with helicopter unit Eurocopter
performing strongly.
Analysts were on
average expecting operating profit of 371 million euros on revenue of
10.64 billion, according to a poll conducted on behalf of Reuters.
EADS maintained its financial objectives for 2012.
Despite concerns
over the economy, commercial jet orders have been rising as Asian and
Middle East carriers expand their fleets to keep pace with growth in
emerging markets and carriers in the United States carry out
long-delayed fleet modernization.
($1 = 0.7828 euros)
(Editing by James Regan)
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