Airbus to report 2009 orders and deliveries

(AP) — Airbus's annual news conference Tuesday should be an occasion to trumpet its successes — but this year the planemaker's achievements are being overshadowed by its troubled military transport plane, the A400M.

Analysts say that Airbus and CEO Tom Enders navigated a terrible year for its customer airlines in 2009 surprisingly well. They expect the company to exceed last year's record delivery tally and beat archrival Boeing Co., keeping the title of the world's largest airliner maker.

And although new sales at both planemakers were hurt by the recession, Airbus likely booked more orders than Boeing and took fewer cancellations.

At Tuesday's annual press conference, which Enders will share with his boss EADS CEO Louis Gallois and other EADS executives, analyst say the company may be able to say it has beaten its 2008 deliveries record of 483 planes.

French daily Les Echos said the 2009 delivery total was 498 airplanes. Airbus declined to comment on the report ahead of Tuesday's press conference.

Boeing delivered 481 commercial planes last year, up 28 percent from 2008 when it was hurt by a strike.

In terms of orders, Airbus had already beat Boeing's net tally by the 11-month mark when it had captured 194 net orders to Boeing's 142. Since then, Airbus has also taken orders for 30 A320s from Latin America's LAN Airlines and 20 A320s from Turkish Airlines.

Airbus' gross order tally at 11 months stood at 225, short of Boeing's 263 and the 300 predicted by Leahy. Boeing has taken more cancellations than Airbus, mainly of its troubled 787. Les Echos said the Airbus total for 2009 was 311.

But Airbus's achievements have been overshadowed by the troubled A400M. The hulking grey turboprop, which made its much delayed first flight only last month, has overtaken the A380 program, which suffered from costly delays, as Airbus' biggest — and costliest — headache.

"The A400M subject is dominating coverage of Airbus at the moment," said Winfried Becker of Oppenheim Research. "Everyone in the market is waiting for a final clarification of how this project might go on."

The program, meant to be a ground-breaking example of European defense cooperation, was launched six years ago with an order for 180 planes from seven governments — Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey. The original price was euro20 billion ($29.5 billion), but a preliminary report by auditors PricewaterhouseCoopers said parent company EADS might need an extra euro5 billion — inflating the final bill by 25 percent.

Enders has slammed the fixed price contract agreed by his predecessor, which customer governments have agreed to renegotiate.

Airbus blames many of the A400M delays on governments' insistence that it choose a European engine consortium which had to develop an entirely new engine, rather than using a ready made turboprop engine by Pratt & Whitney, based in the U.S.

But engine troubles are not the only difficulties.

Problems with the prototype's weight also contributed to pushing first deliveries — originally scheduled for 2009 — to 2012.

Defense officials are due to meet in London on Thursday, ahead of a Jan. 30 deadline to reach a financing deal on how to cope with the cost overruns.

Competing military interests and tight budgets mean they have so far failed to find a compromise, and Enders is reportedly considering scrapping the program.

"There will come a point where it is better for EADS to simply walk away," said Jason Adams, an analyst at Nomura International PLC.

Abandoning the project would cost EADS euro5.7 billion ($8.4 billion) in advance payments it would have to return to governments — and would dent its credibility. It has already put aside euro2.4 billion in provisions against losses related to the plane.

In Airbus' main commercial airlines business, Adams said he will be looking at the planemaker's delivery expectations for the coming years.

2011 — and not this year — may be the trickiest for Airbus, which has moved some of its healthiest customers into 2010 delivery spots, he said.

Key will be whether Airbus expects to keep to its production schedules. Last year Airbus cut deliveries of its A380 superjumbo and A320 single aisle plane as a result of weaker demand due to the recession.

It cut its production schedule from 36 to 34 A320s a month in October, and in 2009 it delivered only ten A380s, instead of the 18 forecast in January.

Adams said he doesn't expect Airbus to announce production cuts on Tuesday, but it may decide to ramp down towards the end of the year in preparation for 2011 if the economic recovery is too damp.

Boeing expects to provide commercial airplane delivery guidance for 2010 on Jan. 27, when it reports fourth-quarter financial results. It announced 2009 results last week.