EADS pays for A400M delays

The parent of European aircraft maker Airbus' full-year earnings before interest and taxes will be revised accordingly, a company statement said.

EADS said the calculations are not yet finalised but that it will need to expense between €1.2bn and €1.4bn, of which more than €1bn is for Airbus, which makes the A400M.

EADS said it discontinued its EBIT guidance for 2007, which will be replaced by an updated guidance on November 8, when its third quarter earnings are released.

The estimate of a charge "is consistent with the delays of 6 months, with a risk of a further slippage of up to a half year," EADS said in the statement.

Citing slow progress in engine development, EADS announced a six-month delay to the A400M on October 17, and warned of a risk of further delays that would push delivery back six more months.

The delays come as Airbus has finally delivered its first A380 double-decker airliner after two years of delays.

The A380 delivery delays, along with management turmoil and the negative impact of the weak dollar, prompted a major restructuring plan for Airbus that involves the sale of several supplier plants and 10 000 job cuts.

Meanwhile, French lawmakers and Paris' financial market regulator are investigating suspicions of insider trading in EADS shares prior to Airbus's public acknowledgment of problems with the A380 that sent shares tumbling 26% in one day in June 2006.

EADS shares closed at €22.89 ($33.14) on Friday.

- AP