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EADS : Lower Airbus A380 Production Would Push Back Break-even Point -Report

10/30/2013 | 06:54am US/Eastern

To reach break-even on the Airbus A380 program by 2015 as planned would prove more difficult if the aircraft production rate doesn't rise to an annual rate of 30 aircraft from 25 at present, Chief Executive Fabrice Bregier is quoted as saying in Wednesday's edition of Les Echos.

Airbus has so far this year booked no firm orders for the A380, although it has set itself a target for 25 firm orders. Mr. Bregier said his sales staff hasn't ruled out achieving this target. Airbus has signed a non-binding memorandum of understanding with Doric Lease Corp. for 20 of the jumbo jets, but the order hasn't yet been firmed up.

Airbus still has some delivery slots open in 2015. Mr. Bregier said Airbus has no intention to reduce its annual production rate below 25 because of the reduced order intake for the planes that cost more than $400 million each. "The question is whether or not we can increase it to 30 on a lasting basis," he said.

The target for the program to reach break-even by 2015 was based on the assumption of a production rate of 30 a year. "At a rate of 25 a year, this objective would be more difficult to reach, but only marginally," Mr. Bregier said. He added that Airbus is working with Doric to try to convince airlines to adopt the 525-seat A380.

Mr. Bregier reaffirmed that Airbus's parent company European Aeronautic Defence & Space Co. (EAD.FR) is on track to reach a 10% operating margin by 2015 provided there are no difficulties in the industrial ramp-up of the wide-bodied Airbus A350 airliner, which is undergoing flight testing prior to entry into service one year from now.

Newspaper website: www.lesechos.fr

Write to David Pearson at david.pearson@wsj.com

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