Airbus looks for [euro]1bn in group savings.

(From FT Investor (Stories))

DYAirbus, the European aircraft maker, is seeking to make cashflow savings of around [euro]1bn ($1.1bn) across much of its operations during 2003 in response to the deepening recession in the civil aerospace sector.

The move is aimed at protecting the group's priority cash outlays involved in the heavy development spending and capital investment for the A380 superjumbo programme as well as in supporting a higher level of customer financing, as troubled airlines find it increasingly difficult to secure other sources of funding for new aircraft orders.

R&D spending on the 555-passenger A380, which is due to make its maiden flight in 2005 with entry into service in 2006, is reaching a peak this year and in 2004 at [euro]1.2bn a year.

Cash savings are being sought across the group through measures such as reducing travel, postponing non-vital research and development spending, deferring tax payments and discussing changes in terms and conditions for paying suppliers.

The group, which had a turnover last year of [euro]19.5bn, is discussing, for example, with its engine suppliers Rolls-Royce, General Electric and Pratt & Whitney, whether a larger share of payments for engines can be delayed to the point at which completed aircraft are delivered to airline customers instead of when the engines are delivered to Airbus.

The European group believes that Boeing, its US rival, enjoys better payment terms from the engine makers, but an Airbus official admitted that the engine manufacturers "are not totally enthusiastic" about granting the concessions.