EUROPE. Airbus Industrie, Europe’s leading aircraft manufacturer, has warned of a softening in orders and production this year. And it says the weak US dollar poses serious challenges to profitability.
Aircraft orders for Airbus and arch rival Boeing are widely seen as a key indicator of the airline industry’s prospects.
Speaking at the annual Airbus New Year’s press conference in Paris, president and CEO Noël Forgeard announced that Airbus had successfully delivered 305 aircraft in 2003 – exceeding its objective for the past year and leading to a turnover of €19.3 billion.
“For the first time in its history, Airbus is now the unquestionable number one in its business,” he stated. But he warned that 2004 would be a “very, very tough year”. Commercial director John Leahy forecast about 250 new orders this year – a decline of -12% on 2003. He said the market recovery had not been as strong as the company expected three months ago. Demand in Europe was weak, he added.
Airbus is aiming to generate a 10% profit margin by 2006 with the aid of a cost-cutting programme, based on an exchange rate of US$1.20 to the euro. But Forgeard said that would be difficult as the euro nudges towards US$1.30.
