Core profit at Airbus more than halved in the first quarter as it cut prices of old models and delays at an engine maker hampered deliveries of its profitable new A320neo jet. Sonia Legg reports
Many airlines were keen to buy the A320neo - it's lower fuel costs and quieter engines a big attraction. But production of Airbus's new jet has been on a go slow - and it seems it's not entirely the European plane maker's fault. Finance Director Harald Wilhelm blamed delays at engine maker Pratt and Whitney for hampering deliveries. That led to weaker than expected first-quarter results. Core profit at Airbus more than halved to 240 million euros. (SOUNDBITE) (English) CRAIG ERLAM, SENIOR MARKETS ANALYST, OANDA, SAYING: "A drop in the profits in the first quarter is a bit of a shock, people were expecting a sizeable drop but not quite to the extent that we saw, especially given the fact that the revenue numbers actually beat expectations." Price cutting of older models didn't help. And Wilhelm also warned about "significant" exposure on its A400m army plane. But Airbus remains confident it can increase jet output despite wobbling demand. and news of a 19 percent rise in first quarter profit at rival Boeing. (SOUNDBITE) (English) CRAIG ERLAM, SENIOR MARKETS ANALYST, OANDA, SAYING: "I think it is important to note that they expect full-year profits to remain in line with their initial guidance so while we have seen this early setback they are still optimistic that the performance in the following three quarters is going to offset the disappointment in the first." But Airbus's boss has a lot on his plate. Austria has launched a fraud investigation into Tom Enders over a 2003 fighter jet deal. Airbus calls the accusations "completely unsubstantiated". But it's another distraction. Last year European government export funding was suspended amid a probe into suspected corruption in jetliner sales.