Airbus to unveil record 2009 civil deliveries on Tuesday

PARIS – Airbus refused on Monday to back away from a row with European buyers over its troubled A400M military plane, insisting it would need a significant boost in resources to avoid axeing a project supporting 40,000 jobs.

The European planemaker has been at odds with seven European NATO nations, notably Germany, over responsibility for cost overruns and a two-year production delay for the troop and equipment transporter urgently needed in Afghanistan.

Chief executive Tom Enders kept up the pressure in a pre-recorded television interview to be aired on Tuesday, two days ahead of ministerial talks called to discuss the deadlock.

“We cannot complete the development of this aircraft without a sizeable, without a significant financial contribution from our major customers,” Enders told BBC Television’s World Business Report in an interview due to be broadcast on Tuesday.

“If they refuse, it’s less risky for us to stop the development and redeploy our engineers on other important projects. And, yes, we will take a huge financial hit.”

Negotiators say Airbus parent EADS has asked for the equivalent of 5.3 billion euros ($7.7 billion) relief from nations which signed up for Europe’s largest ever defence project — Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.

So far, they say, only Turkey has agreed to stump up more money while a majority of remaining countries have agreed to discuss a compromise that would allow EADS to produce fewer planes in a first tranche but without any immediate new cash.

Germany has refused to back the idea but said last week it hoped to reach a consensus on the 20 billion euro development.

Enders has taken a lead in voicing EADS’s frustrations over the stand-off as Airbus also struggles to keep A380 civil airliner production on track and enters the risky development phase of its next airliner, the 11 billion euro A350.

But he acknowledged that EADS, led by Frenchman Louis Gallois, would have the final say over whether to build the A400M — a project billed as crucial for its own defence strategy as well as Europe’s fragile common defence identity.

“This is a decision the board of directors will certainly take but I will certainly suggest to take that decision,” Enders told the BBC, according to a text made available to Reuters.

He denied bluffing over the threat to halt production of the plane, which staged its maiden flight only last month.

“I never play poker. We have carefully analysed the situation. If you make mistakes and everybody makes mistakes, do not repeat them twice. We made once a big mistake when we made contracted for this aircraft six or seven years ago.”

RECORD DELIVERIES

Enders has said he is anxious to protect the civil business which is expected to report record activities on Tuesday.

Airbus will announce in Spain that it delivered a record 498 planes in 2009, beating U.S. rival Boeing (BA.N) for the seventh year running, industry sources said.

The planemaker delivered three A380 superjumbos in December, bringing production of the world’s largest airliner to 10 planes for 2009 as a whole, at the low end of expectations.

Airbus is conducting a review of the A380 production process which faces cost overruns and delays due to the high level of customisation allowed on each $328 million aircraft.

Airbus also looked set to scrape past its 2009 target of 300 new orders after a scramble to firm up provisional orders or book new ones in time for the year’s closing and amid signs some airlines are starting to look beyond the downturn.

The planemaker squeezed in another order on Monday, saying it had sold 6 A330-300 planes worth $1.2 billion at list prices to Virgin Atlantic on Dec. 30, with the airline also agreeing to lease another four from Dutch lessor AerCap (AER.N).

Boeing said last week it had delivered 481 planes in 2009, up from 375 in 2008 and in line with its target of 480-485 deliveries. It booked 263 new gross orders and 142 net orders after cancellations in 2009. [nN07187593]

New orders from both planemakers fell in 2009 amid a steep decline in air travel and freight transport, but production is still rising on the back of an order boom that peaked in 2007.