Airbus may cut A330, A320-family production: Gallois

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EADS will consider offering financial incentives to struggling airlines, warning that it is prepared to cut production of Airbus A330 and A320 family aircraft this year to avoid growing inventories.

Speaking at a press event in Newport, Wales today, chief executive Louis Gallois said its Airbus subsidiary would "have to adapt production to deliveries".

"We do not want whitetails," he adds. Declining to be more specific on numbers, he says: "We are closely monitoring our backlog evolution. We are receiving signals from airlines and we have to analyse them."

However, production of the A380 will continue to be ramped up. "Our target is to achieve our [intended] production rate," he says.

Gallois says that EADS' priority this year will be "protecting" cash as the credit drought continues, revealing that, for this reason, the Franco-German giant turned down a big US defence company acquisition on the eve of signing a deal in the final quarter.

"[EADS] was about to send the cheque and was stopped by the board," he says.

EADS had €9 billion in cash reserves at the end of 2008. "We will limit capital expenditure to priority programmes," says Gallois. Another priority for EADS in 2009 will be "protecting" suppliers, particularly those badly hit by the decline in the automotive industry.