EADS strategy to stress Airbus commercial jets; defense, space revenues flat

Wed Dec 11, 2013 6:00am EST
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By Tim Hepher

PARIS (Reuters) - Airbus parent EADS was poised on Wednesday to set out a two-tier strategy stressing growth in civil jetliners coupled with a forecast of flat defense and space activities throughout the decade.

The European aerospace group has ditched efforts to balance civil and defense revenues, which are skewed heavily towards its Airbus. EADS previously said it plans in 2014 to change its name to Airbus to reflect growing reliance on the commercial jetliner division.

EADS gave a taste of the changes in July after the collapse of merger talks with Britain's BAE Systems in late 2012 prompted a strategy review. A detailed overview is expected at a two-day investor meeting starting on Wednesday.

The event comes two days after EADS announced 5,800 job cuts driven both by cuts in European arms spending and by tough competition in the satellites market.

"The strategy of EADS is to be number one in commercial aviation and to be a significant factor in defense and space, (where) it will remain an investor," Chief Strategy and Marketing Officer Marwan Lahoud said.

"It is a business model where you have one growth activity which is commercial aviation and an activity of consolidation - meaning you manage the return on capital - which is defense and space," he added.

A previous EADS strategy plan in 2007 called for balance between Airbus and other revenues in the group, which makes Ariane space rockets and a share of Eurofighter combat jets.

EADS is expected to give an upbeat assessment on commercial jet demand that has pushed its shares to record levels in the past two years and also benefits rival Boeing (BA.N: Quote).   Continued...

Logo of EADS is seen at the European aerospace and defence group EADS headquarters in Les Mureaux near Paris in this January 12, 2011 file photo. REUTERS/Charles Platiau