Airbus A350 Decision Due Soon

BERLIN -- Airbus expects to decide before July on the final design of its troubled A350 airliner, parent company EADS said Tuesday as it reported a 26 percent rise in first-quarter net profit.

Airbus has said it is considering modifications to the wide-body A350, its planned rival to the Boeing 787 Dreamliner, after strong criticism from airlines and jet-leasing companies.

Noel Forgeard, co-CEO of European Aeronautic Defense and Space, indicated to reporters at the Berlin International Airshow that changes were likely.

"We have listened to some customer feedback on our way to make the final definition of the A350 aircraft," Forgeard said. "Do not expect announcements now but I think we can say that the definitive decision should be made before ... July."

While declining to give specifics, he said whatever decision is made must take into account how to finance any changes. However, he suggested the company would be able to take on significant costs. Aircraft makers typically sink billions into the development phase of large planes.

"Whatever we do, it will be compatible with the financing capacity of Airbus," he said. "You know that Airbus has a very strong cash flow, so we have some margins in what we can offer."

Airbus last year maintained its lead over U.S. rival Boeing in terms of net orders and plane deliveries, but fell behind on order value as sales of its larger planes failed to keep pace.

Forgeard said he remained confident in the A350. "Taking into account customers' feedback, the A350 will prove as well to be a formidable competitor to the 787," he said.

EADS, which owns 80 percent of Airbus, earned 516 million euros ($665 million) in the January-March period, up 26 percent from 410 million euros a year earlier and maintained its full-year earnings outlook. Sales rose by 30 percent, climbing to nearly 9.1 billion euros from 7 billion euros.

Deliveries of Airbus planes rose to 101 from 87 in the first quarter of last year. The company said it expects Airbus deliveries to increase by more than 10 percent over the full year.

First-quarter gross orders for Airbus planes dropped to 90 from 123, however.

EADS' overall order intake rose by 18 percent, increasing to 10.5 billion euros euros from 8.9 billion euros. The company said that was supported by units such as its military aircraft and helicopter divisions.

EADS said its Sogerma Services plane-servicing division made an operational loss in the first quarter.

As part of a restructuring plan, Forgeard said the company's site in Bordeaux, France, would be closed down, affecting 1,000 jobs, adding that each employee would be offered new positions elsewhere within EADS.

"Anybody in Bordeaux that will be flexible, that will be ready to train, ready to move, will find a new job with EADS," he said.

Also at the airshow, EADS said it had signed a cooperation agreement with Russian aircraft manufacturers MIG and Irkut to focus on the conversion of the A320 and A321 Airbus aircraft into freight haulers.

The aircraft conversion will be done in Russia and is planned to begin in 2010, Forgeard said.