Airbus to focus on current products and reduce risk
By Tim Hepher
PARIS (Reuters) - European aerospace group EADS pledged to shun risky investments and new plane programmes as it looked to bury the ghost of troubled projects and promised investors a smoother ride in coming years.
The head of its Airbus planemaking division, Fabrice Bregier, said it had stabilised production problems on the A380 superjumbo and the A400M military airlifter which had caused the company significant headaches in recent years.
He also told investors that flight testing and development of its latest aircraft, the A350, were progressing well ahead of first delivery planned in the fourth quarter of 2014.
"We are on track. You know the risks, but the risks are reducing," Bregier told an investor forum in London, monitored by webcast.
After it delivers its first all-new passenger jet in a decade, Airbus will focus on enhancements to existing models.
"Nobody sees brand-new developments in the next 10 years or even more," Bregier said. "The focus is on the improvement of our (in-production) series programmes and there is still a lot to be extracted from them.
"The good news for you is that it is much less risky to improve existing platforms than develop brand-new aircraft".
He did not say what impact this would have on research spending but said the company would also pursue new technology.
INCREASED PRODUCTION
Airbus is bringing out a revamped version of its best-selling passenger plane, the A320neo, from late 2015 and has announced a series of modifications to its A330 aircraft.
Bregier said there was a greater possibility that Airbus would increase, rather than reduce, production of A320-family jets as it makes the transition to the more efficient model.
Boeing , which won a significant order from Air Canada overnight, last month announced plans to increase production of its competing 737 MAX. The models compete in the largest segment of the $100 billion annual aircraft market.
Shares in EADS extended strong gains seen on Wednesday when it announced that loss-making early deliveries of the A350 would eat into 2015 profit targets less than expected, following efforts to drive risk out of the new project.
At mid-session they were up 0.5 percent at 53.12 euros, not far from a record 54.5 euros set last month.
EADS strategy chief Marwan Lahoud, one of the architects of the company formed by a Franco-German-Spanish merger in 2000, said it would not chase growth at any cost and would avoid investing in areas where growth looks shaky or inaccessible.
The company, which is in the process of selling its Test and Services monitoring business, will carry out "active portfolio management" in coming months, he said, apparently referring to further moves to thin out non-civil assets.
"We will not allocate resources to areas where growth is difficult to access," Lahoud added.
(Editing by Keiron Henderson and David Holmes)
