Airbus optimisitic about aircraft deliveries

BERLIN, Germany (Reuters) -- The Airbus SAS civil aircraft unit of European group EADS is increasingly optimistic about the strength of its 2003 aircraft deliveries and may increase work time at its plants, its chief executive said on Monday.

The airliner firm confirmed earlier forecasts that it would deliver 300 aircraft this year and said it was now optimistic for similar deliveries in 2003, chief executive Noel Forgeard told reporters at the Berlin air show.

Deliveries in 2003 have been at risk from deferrals and cancellations from airlines suffering from weak travel demand.

Forgeard said European countries would soon definitively launch an EADS-led Project to jointly build an 18 billion euro ($16.5 billion) fleet of A400M military transport aircraft.

That project is run by Airbus Military, an associated company also majority owned by European Aeronautic Defence & Space.

Over the past few months Airbus has expressed increasing confidence in its plan to deliver 300 planes this year, a target based on talks with distressed airline customers held soon after the September 11 attacks damaged demand for air travel.

"In the first four months of this year we have delivered 103 aircraft, so we are completely in line with our objective of 300 deliveries in 2002," Forgeard said.

"I remain optimistic that we will be able to deliver 300 aircraft this year and achieve similar performance in 2003," he said.

Civil aircraft deliveries translate almost directly into revenue for manufacturers Airbus and Boeing of the United States, because airlines pay most of the price of each plane as it is assembled and on delivery.

EADS, based in Germany and France, owns 80 percent of Airbus and fully consolidates the firm in its accounts. British arms maker BAE Systems owns the rest.

To avoid layoffs, Airbus employees are working fewer hours than normal this year.

But Forgeard said the firm's management was thinking of reducing the amount of short-time work -- that is, increasing the hours of labour that the company employs.

"(This possibility) is not due to additional orders," Forgeard said. "It is due to the view we have about next year, which we see now probably stronger than we Expected."

Airbus was not planning to deliver more than 300 planes this year, he stressed.

"If it happens it will be a happy result of our efforts, but it is not something that we plan so far."

Airbus delivered 325 planes in 2001 and expected before September 11 to ramp up production beyond 400 a year. Unlike Boeing, whose production is much higher and falling, the European company's experience since the attacks has been mostly one of lost opportunity rather than disruption.

Forgeard said that multinational purchasing authority OCCAR was close to Confirming "in the very near future" an A400M order contract signed in December.

The A400M would greatly boost the defence revenues of EADS, whose activities are currently dominated by Airbus's very cyclical civil business.

It would also greatly increase the ability of European countries to deploy significant army forces quickly and over long range, something they can do now only with U.S. help.

Under various names, the A400M has been awaiting launch for 20 years. A top European aerospace source said this week that the project now had final approval from almost all of the partner countries -- Germany, France, Spain, Britain, Turkey,

Belgium, Portugal an d Luxembourg.

That executive also said the launch was very close, but he did not expect to see it at this week's Berlin air show.