PARIS (AP) — Airbus parent company EADS NV said Thursday it took a euro200 million ($273 million) charge in its third quarter accounts because of a new delay in the launch of its strategic long-range jet the A350XWB.The European aircraft manufacturer says the A350 lightweight composite jet will enter service during the first half of 2014, up to six months after it was previously expected to begin carrying passengers.
The company gave no explanation for the delay in a statement. The announcement came as EADS announced higher third quarter profit and raised its earnings guidance for the full year.
The A350XWB is a new long-range jet designed to go head-to-head with rival Boeing’s much-hyped jet, the 787. Airbus says the use of lightweight carbon composite materials and advances in the aircraft’s aerodynamics will make it 25 per cent more fuel efficient than current jets. But the program has given Airbus engineers headaches throughout its long development.
Airbus said final assembly of the A350 will start in the first quarter of next year, with entry into service in the first half of 2014.
EADS’ net profit in the third quarter rose to euro312 million, up from euro13 million a year earlier. Airbus, the largest part of the company that also includes helicopter maker Eurocopter, satellite builder Astrium and defence electronics firm Cassidian, delivered 376 aircraft during the first nine months of 2011. The company expects to deliver between 520 and 530 aircraft in total this year.
Shares in EADS jumped at the open of the Paris stock exchange as investors welcomed the company’s new full-year earnings forecast. At 0930 GMT the shares were up 5.9 per cent at euro21.15.
EADS’ chief financial officer said the decision to delay the A350’s launch and take the euro200 million charge was done “to ensure that the aircraft is mature and trouble-free when delivered.”
“It’s not about simply meeting deadlines,” CFO Hans Peter Ring said in a conference call with reporters. “We won’t move to the next phase without finishing the previous one,” he said, saying that was one of the lessons Airbus had learned from the tortured and over budget development of its A380 super jumbo jet.
Ring blamed the A350s delay on a shortage of some parts as well as delays in delivery of some of the aircraft’s composite parts.
Ring said he was confident Airbus would continue to help EADS grow its revenue and profits “despite the macroeconomic difficulties, especially in European economies.”
The company expects its revenue to increase by more than 4 per cent this year compared to the euro45.8 billion it made last. It also forecast around 1,500 gross orders for Airbus this year, after registering 1,038 net orders by the end of September.
Last year Airbus delivered a record 510 aircraft and took in 574 net new aircraft orders.
The plane maker trounced Chicago-based rival Boeing in the race to be the world’s biggest planemaker, claiming over $72 billion dollars worth of orders and commitments at the Paris Air Show in June, including a $18.5 billion order for 200 of Airbus’ new A320neo aircraft — called the largest order in aviation history.
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