European aerospace group EADS said on Tuesday it had abandoned a "significant" defense acquisition in the United States to conserve cash and prop up Airbus plane sales to crisis-hit airlines.
The Airbus parent company is under pressure to offer financing to buyers to ensure they honor contracts and also faces a raft of possible new provisions for delays to its A400M military airlifter.
Airbus and rival Boeing saw new plane business roughly halve last year after a record 2007 as airlines endured first a record spike in oil prices, then a slump in passenger and cargo demand.
"We want to protect cash so we are focusing and reducing our investment expenses," EADS Chief Executive Louis Gallois told an annual news conference.
"We need this cash to protect the company and sometimes support our suppliers, in particular when they are in common with the auto industry," he said.
Gallois declined to say what level of cash EADS would find comfortable, but revealed that even while closing out 2008 with a 2 billion euro cash increase compared with the end of 2007, it had cancelled an acquisition in the United States to save cash.
"We were on the way to sending the cheque and we pulled out at the last minute. It was a unanimous position by the board," Gallois said.
EADS was forced to abandon the purchase of a U.S. military drones designer in 2007 after a split on its board.