EADS rules out solo military contract bid

Published on Tuesday 9 March 2010 20:17

AIRBUS parent company EADS has ruled out a solo bid for a lucrative US military contract after its partner pulled out.

The Franco-German group also axed its dividend after heavy losses in 2009 and warned production niggles on its A380 superjumbo would hit profits this year.

On Monday, EADS' US partner, Northrop Grumman, dropped out of the race to build a military air refuelling tanker, leaving US rival Boeing as the sole bidder.

EADS chief executive Louis Gallois said yesterday that Northrop's withdrawal from the tanker tender meant there was "no chance" of winning the competition.

Airbus chief executive Tom Enders also played down talk of an independent European bid, barring a change in the situation.

European Union trade commissioner Karel De Gucht said that it was "highly regrettable that a major potential supplier would feel unable to bid for a contract of this type".

The German economic minister Rainer Bruederle said the US government had given a clear advantage to Boeing.

EADS, the world's second-largest aerospace group after Boeing, posted a 2009 net loss of 763 million (about 691m) and an operating loss of 322m, compared with a net profit of 1.57 billion in 2008.

On a positive note, the company said it plans an increase in single-aisle Airbus A320 production to 36 a month from 34 as signs of recovery in the aviation market continue to be seen. EADS said it expected stable revenue during 2010 with an operating profit of about 1bn.