GO
Loading...

Airbus highlights challenge with Dreamliner rival

Balint Porneczi | Bloomberg | Getty Images

Aerospace and defense group EADS - owner of aircraft-maker Airbus - said Thursday that higher-than-expected manufacturing costs for its new wide-body model were proving to be a challenge.

In the company's latest quarterly results, EADS chief executive Tom Enders warned that the company was spending a lot of money to launch the A350 XWB, The new aircraft is a new fuel-efficient twin-engine jet aircraft and is touted as a rival to Boeing's Dreamliner 787.

"The A350 XWB program remains challenging. Any schedule change could lead to an increasingly higher impact on provisions," EADS said in the earnings report, with Enders adding that the development was entering a "critical stage".

(Read More: Boeing and Airbus Opt for Slow but Steady Approach to Deliveries)

But Harald Wilhelm, chief financial officer of EADS told CNBC that the latest release date for the aircraft is still expected to be the second half of 2014. The project's production is already a year behind schedule.

"We stick to the schedule... no change to that, however, it remains tight," he said.

Delays in the production have increased as suppliers struggle to produce the necessary composite material parts. The perils of estimating delivery times for new aircrafts has led rivals Boeing and Airbus to be more cautious in the future as both grapple with delivery backlogs and production difficulties.

Back in July at the Paris Air Show, Airbus Executive Vice President of Engineering Charles Champion told, CNBC that they had tried to move too quickly to create new models, at a faster pace.

"We learned the lessons of the industrial challenges to get it into production," said Airbus Executive Vice President of Engineering Charles Champion, regarding the A350.

(Read More: EADS changes name to Airbus, raises jet order goal)

Boeing's Dreamliner, released in 2011, was also subject to a fair amount of setbacks. Boeing Marketing Vice President Randy Tinseth admitted in June that there had been failures at the start of the 787 campaign, but was more confident with its the new 787-10 model.

EADS revenues rise

Meanwhile, EADS reported third-quarter earnings that narrowly missed expectations on Thursday but the company raised its aircraft orders for the year to reflect improved market demand.

Revenue came in at 13.63 billion euros ($18.36 billion), against analysts' estimates of 13.47 billion euros in a Dow Jones poll. Adjusted EBIT (earnings before interest and tax) - or operating profit - was 663 million euros, against forecasts for 675 million euros.

EADS' order intake rose sharply to 138.2 billion euros for the first nine months of the year, compared to 50.4 billion euros for the same period last year, as the strong commercial momentum continued into the third quarter, particularly at Airbus.

(Read More: EADS sees flat to lower defense revenue)

Revenues for the first nine months of the year rose 7 percent from the same period last year to hit 40 billion euros.

"We achieved a good improvement in revenues and profitability over the first nine months thanks largely to our civil aircraft business," said EADS CEO Tom Enders in a press statement. The results come ahead of the highly anticipated airshow in Dubai next week.

EADS said it expected the world economy and air traffic to grow in line with prevailing independent forecasts and assumed no major disruptions. EADS made several adjustments to its full year guidance, suggesting it should see moderate growth in 2013. The results come ahead of a highly anticipated airshow in Dubai next week.

Follow us on Twitter: @CNBCWorld

Symbol
Price
 
Change
%Change
BA
---

Featured