Airbus freezes production as it evaluates airline market

Associated Press

PARIS — European Aeronautic Defense &Space Co., the main shareholder in Airbus Industrie, will continue talks with airline customers for several weeks to get a clearer picture of 2002 deliveries, executives said.

"As for 2003, I think even airlines don’t know what will happen," the company’s co-chief executive officer, Rainer Hertrich, said Tuesday. European Aeronautic Defense &Space owns 80 percent of Airbus, and Britain’s BAE Systems owns 20 percent.

Hertrich confirmed that Airbus will freeze production capacity at around 330 aircraft next year, down from a summer forecast of 390. He said the company could also lower capacity to 280 or increase it to 380 because of flexibility in production systems.

The Boeing Co., Airbus’ U.S. rival, anticipates deliveries to drop as low as 400 planes, compared with 510 to 520 previously forecast. Since the terrorist attacks on Sept. 11, Boeing has announced plans to lay off as many as 30,000 employees in commercial airplane operations.

Airbus has said it is too early to predict whether it will have to lay off workers because of the attacks.

Airbus has told unions that a production level of 300 aircraft next year would be a worst case scenario. As of now, Airbus has reported 375 orders for delivery next year, well above the production freeze level.

Hertrich said several airlines have asked European Aeronautic Defense &Space for either financial support or postponement of deliveries.

"We are ready to do that when it is appropriate," he said.

Philippe Camus, European Aeronautic Defense &Space’s other co-chief executive officer, said Airbus has not recorded any order cancellations despite trouble in the air industry since the U.S. terrorist attacks.

"There is no doubt that the commercial aircraft business is going through turmoil," Camus said. "In the short term, that’s for sure, and maybe long term."