Jet delays cause loss at parent of Airbus

Airbus parent European Aeronautic Defense & Space Co. unexpectedly posted its first quarterly loss in three years Wednesday, citing delays in deliveries of its A380 super-jumbo jet.

The news came a day after FedEx Corp. became the first customer to scrap an order for the A380 and chose the cargo version of Boeing Co.’s 777 as a replacement, a purchase potentially valued at $3.6 billion.

Airbus has said deliveries of the 555-seat A380 will be two years or more behind schedule. The company also is trailing Boeing by five years in producing a new long-range, mid-size plane.

The European plane maker “has clearly got production problems as well as management problems,” said Daniel Broby, who helps manage $14 billion as chief investment officer at Copenhagen-based Bankinvest. He does not own EADS stock. “The FedEx cancellation was a big one. The delays mean customers can put pressure on the company on prices, and that’s obviously bad news for the bottom line.”

Nevertheless, EADS shares rose 3.2% in Paris on speculation that investors in Dubai, United Arab Emirates, wanted to buy a stake.

“We heard the rumor, and that’s moving the shares,” said Frederic Boissel, a trader at Global Equities in Paris.

EADS reported a third-quarter net loss of 195 million euros ($247 million). That compared with net income of 279 million euros a year earlier.

The Paris- and Munich-based company had been expected to report profit of 142 million euros, according to the median estimate of seven analysts surveyed by Bloomberg News.

EADS said third-quarter sales rose 14% to 8.49 billion euros ($10.8 billion).

Airbus, the world’s largest maker of commercial aircraft, risks losing that position to Boeing because of the A380 delays and its lack of a mid-size plane to compete with its U.S. rival’s 787. Airbus ran into difficulties with the A380 because its German and French design teams used different software. Production has been slowed in installing 300 miles of wiring in each aircraft.

The future of Airbus’ A380 freighter program won’t be decided until the two remaining customers for the plane, United Parcel Service Inc. and International Finance Lease Corp., determine whether they will stick with their orders, Chief Financial Officer Hans Peter Ring said on a conference call with analysts.

“For the remaining customers, we obviously need to get them reconfirmed, because they’re all in the cancellation zone,” Ring said. The A380 is now so late that customers have the right to cancel their orders without paying penalties.

Atlanta-based UPS said it was still considering its options.