Airbus is ready to cut output for the first time since the aftermath of the September 11, 2001 attacks in the United States if the global financial crisis continues to spiral, the plane maker's head said on Monday.
In a switch of emphasis, Airbus also stands ready to help more airlines finance their purchases as credit dries up, chief executive Tom Enders told reporters.
The financial crisis and looming recession are a severe blow for airlines barely recovering from a summer spike in oil prices and Airbus has predicted a downturn in orders next year.
Last month Airbus shelved plans to increase production by around 10 percent, which had been designed to whittle down a record order backlog, as the credit crisis and falling air traffic threatened a slew of order deferrals and cancellations.
"We are not in a bad position as we go into this (financial crisis) situation but we do not exclude further action if the situation deteriorates further," Enders told a press dinner organized by the French association of aerospace journalists.
Airbus has frozen production at 36 single-aisle aircraft and 10 wide-bodied planes a month, postponing indefinitely its previous plans to boost these levels to 40 and 11 respectively.
Airbus, which expects to produce and deliver a record 470 aircraft this year, last cut its annual deliveries in 2002.
Airbus is also ready to swing back towards financing aircraft sales as the USD$50 billion to USD$60 billion plane market turns lower.
In contrast with Boeing's dedicated financing arm, Airbus has tended to limit its financing activities to prop up sales though it is accused by Boeing of slashing prices instead.
Airbus currently has USD$1.2 billion in financing exposure, according to latest quarterly results, and some executives have recently talked of doubling this in 2009. But Enders indicated the figure could go sharply higher, noting Airbus had financed USD$6.1 billion in 1998 and USD$4.8 billion in 2003.
"Much depends on how long credit squeeze lasts," he said. "In principle financing will remain lucrative as aircraft are mobile assets, especially modern, fuel efficient ones."
Airbus is also in talks with the credit export guarantee agencies of France, Britain and Germany to secure their support.
"There are credit agencies that can provide backstop guarantees and we are also willing to pull our weight. I am not willing to give numbers but in the past we had financing of over USD$5 billion or USD$6 billion and this did not kill the company."
Enders said Airbus still hopes to deliver a total of 12 A380 aircraft in 2008 and reiterated the company's latest target of 19 deliveries in 2009, reduced from 21 last week to allow for slippage between the first and second waves of production.
Hit by wiring problems which delayed the world's largest airliner by 2 years and cost parent EADS billions of euros in lost profits, Airbus plans to wire up the first 25 aircraft manually then move to automated "wave 2" production.
In other points, Enders:
-- Reaffirmed an Airbus target of 850 gross orders in 2008 after another executive earlier on Monday spoke of 800 orders.
-- Said Airbus had no plans to work jointly with Brazil's Embraer.
-- Said 2009 would be "tough and challenging".
-- Said a test plane carrying one of the engines developed for the A400M airlifter would make a debut flight in 3-4 weeks. This is a step on the way to the first flight of the A400M itself, which has been indefinitely postponed.
-- Reiterated that Airbus blames engine manufacturers for the delays of at last a year to the EUR 20 billion euro A400M project.
-- Said he personally supports placing EADS headquarters in Toulouse where Airbus is based, instead of splitting the Franco-German company's base between Paris and Munich as now.
(The issue is a politically sensitive one that is seen unlikely to progress much further for the time being because of frayed Franco-German relations, other industry executives say).
-- Said EADS would work hard to win any new tender for US air tankers after a USD$35 billion tender was awarded to EADS then scrapped after an appeal from Boeing. The contest is one of the top arms procurement issues awaiting the Obama administration.
