Tue, May 16, 2006
Ya Gotta Make Money To Spend Money
They are often bitter
competitors... but when you get right down to it, American
planemaker Boeing Commercial Aircraft and Europe's Airbus Industrie
have more in common than not. One of those commonalities -- at
least this year -- seems to be how much their parent companies
relied on their commercial aircraft divisions to lift profits.
We've already reported on Boeing's better-than-expected gains for
the first quarter of 2006... and on Monday, the
European Aeronautic Defense and Space company (EADS) reported that
it, too, benefited from strong commercial aircraft sales, with its
earnings rising 26 percent over the same time in 2005.
Bloomberg News reports that a full order book for Airbus
aircraft in 2006 should mean EADS -- and Airbus -- will continue to
post a profit throughout the year. With Q1 deliveries rising to 104
planes compared to last year's 87, the European consortium is on
track to deliver 430 airplanes in 2006, mostly to Asian carriers
and LCCs.
"Airbus is benefiting from the double effect of higher aircraft
deliveries and the benefits of its Route 2006 cost cutting
program," said Yan Derocles, an analyst at Oddo Securities in
Paris.
As with Boeing, however, Airbus may already be looking to spend
some of that money in a way the company would just as soon not. For
Boeing, some of its profits will likely go towards paying a rumored settlement with the US Justice
Department over recent procurement
scandals... while Airbus looks to possibly redesign or replace its proposed
A350, which so far hasn't proven to be much of a
challenger for Boeing's upcoming 787 Dreamliner.
Bloomberg reports that Airbus co-Chief Executive Officers Noel
Forgeard and Tom Enders are expected to comment further on those
plans Tuesday at the Berlin Air Show.
Airbus is rumored to be planning to spend as much as $10 billion
on a new 300-seat plane to replace the original A350, which has
garnered only 100 orders to date compared to 350 for the Boeing
787.
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