U.S. News

Airbus 2006 Operating Loss Predicted, Orders Fall

Airbus Likely to Post Loss

European Aerospace giant EADS said Wednesday its Airbus division likely posted an operating loss for 2006 and that orders for new planes fell behind rival Boeing last year.

EADS said Airbus will record a loss, before interest and taxes (EBIT), mainly due to production problems and costly delays to its A380 super jumbo. The delays have pushed some airlines to opt to order planes from Boeing .

"The A380 was the major problem in 2006. The problems for 2007 are the high currency diversities and the 20% price difference in comparison to Boeing," said Nick Fothergill, head of industrial aerospace and defense sales and trading at Lehman Brothers, on "Worldwide Exchange."

Airbus received new orders for 824 planes in 2006, which is significantly bellow rival Boeing’s 1,050 new orders for the same period. This means Airbus has fallen behind its U.S. rival for the first time since 2000, the Associated Press reported Wednesday.

The full-year results for EADS are as yet uncompleted, so the extent of the damage caused by Airbus’ performance is still unclear. But the company expects other divisions to balance the negative performance and bring overall EBIT into positive territory.

Shares of EADS opened 3% lower in Paris ahead of the official results Wednesday.