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Mixed results in the air industry

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Mixed results in the air industry
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Announcing better than expected earnings for last year, aerospace group EADS is predicting a big jump in operating profit this year to 2.5 billion euros.

The parent company of Airbus credited brisk demand for its passenger jets and progress in controlling costs on its A380 superjumbo.

Announcing the results, Chief Executive Louis Gallois defended plans to focus more of the group’s activities near Airbus headquarters in Toulouse, France, even though that goes against German government wishes.

EADS posted a 38 percent increase in 2011 operating profit to 1.696 billion euros on revenue that rose 7 percent to 49.13 billion. Net income rose 87 percent to 1.03 billion.

The upbeat tone contrasted with word from Air France-KLM that it swung to a loss last year and will not pay shareholders a dividend.

The Franco-Dutch airline also warned that soaring fuel costs will continue to hit its profits this year.

The 2011 operating loss was 353 million euros compared with a 28 million euro profit in the previous year.

Air France-KLM said its turnaround plan — including cutting debt and shrinking its fleet — should start to show benefits in the second half of 2012.