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Analysts: Airbus Not Likely to Suffer

August 14, 2002

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PARIS (AP) _ One of its leading U.S. customers has filed for bankruptcy, another could be close behind, and a third is reducing its fleet of planes.

At first glance, things might be looking a bit grim for European aircraft maker Airbus, but aerospace industry analysts say that Airbus isn’t likely to suffer much financial fallout, at least for now.

The airline industry was shaken this week, when US Airways filed for bankruptcy Sunday and again on Wednesday when United Airlines warned that it would file for bankruptcy court protection this fall unless it succeeds in lowering costs dramatically through a restructuring. American Airlines’ announcement Tuesday that it would cut 7,000 jobs and shelve 74 planes only compounded the worry.

``All of this shows it’s not very rosy for the industry,″ said Charles Armitage, an aerospace industry analyst at Merrill Lynch in London.

Airbus, a unit of the publicly traded company European Aeronautic Defense & Space Company, insists it’s too early to speculate about United’s future plans and expects US Airways to rebound. Airbus has no pending business with American, which owns 34 Airbus jets.

``We are confident that US Airways will come out even stronger after the Chapter 11,″ Airbus spokesman Tore Prang said, referring to the U.S. bankruptcy filing.

US Airways, which became the first U.S. airline to seek bankruptcy protection since the Sept. 11 attacks, has an order for 38 Airbus jets that haven’t been delivered yet.

Even before the terror attacks, which wreaked havoc on the airline industry, US Airways had said that it wanted to delay the delivery of those planes for several years, Prang said.

US Airways received five new planes from the aircraft maker earlier this year, Prang said. The 38 others weren’t to be delivered until 2005 at the earliest.

Analysts said that should give US Airways time to recover.

``I don’t think the problems of US Airways will have a significant effect on Airbus,″ said analyst Philippe Mouthon, of SG Securities. ``For the woes of the U.S. airlines to really affect Airbus, they’ll have to last for two or three more years.″

The stakes for Airbus may be higher with United, a larger customer than US Airways in that it is awaiting delivery of 47 planes. Its stock price plunged sharply on Monday and Tuesday amid speculation that it could be the next U.S. carrier to file for bankruptcy.

US Airways now operates 127 Airbus planes, while United has 148, according to the Airbus Web site.

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On the Net:

Airbus: http://www.airbus.com

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