European aerospace group Airbus took a new fourht-quarter charge of 1.2 billion euro ($1.2 billion) for its troubled A400M military aircraft programme and called for new talks with European buyer nations to limit further financial damage, despite posting higher than expected core earnings and revenues for 2016. Ivor Bennett reports
When it works, the A400M is an impressive sight. The problem for Airbus is, it doesn't always work. Only this month, one plane broke down on the tarmac with Germany's defence minister on board The fatal crash of a test flight in 2015 also still fresh in the memory. The latest problems are financial. Delay penalties of 2.2 billion euros in 2016 prompting a mea culpa of sorts from the CFO. SOUNDBITE (English) HARALD WILHELM, CFO, AIRBUS, SAYING: "We learned our lessons from such kind of contracts. I meant the one which got signed back in 2003, we need to better understand and ring-fence risk of such type of undertaking moving forward." Airbus now wants governments to ease the charges. But said it wasn't yet threatening to stop production. SOUNDBITE (English) HARALD WILHELM, CFO, AIRBUS, SAYING: "Clearly there's a need, there's a demand for the aircraft, we understand that, we want to satisfy that as much as we can but we have to find a common way through it." Despite the problems, the fall in profits was much less than expected. Adjusted operating income dropping 4 percent after another year of record deliveries helped boost revenues. But looking ahead, Wilhelm acknowledged uncertainties, even if Brexit and Trump weren't mentioned by name. SOUNDBITE (English) HARALD WILHELM, CFO, AIRBUS, SAYING: "What's going to happen in Europe and other places, I cannot predict today. I think there are too many uncertainties. But clearly, we go where the business is, we put our investments over there, and we just enjoy being that international taking the business opportunities from there." Airbus refused to give a target for orders. But many analysts believe demand is drying up. And even some executives have said orders will trail deliveries this year for the first time since 2009.