Gilbert Sedbon/PARIS

LOSSES AT Aerospatiale more than doubled in 1995, but chairman Louis Gallois is confident that the group will be back in profit within the next two years.

Undaunted by a headline loss of Fr981 million ($193 million), Gallois says that the group will reach break-even by 1997 and make "significant profits" from 1998 onwards.

He adds that the recovery hinges on the relative strength of the US dollar, which is pegged at around Fr5. Profits may come sooner if the dollar strengthens, he says.

The need to show a profit has grown following the French Government's announcement that it plans to force Dassault Aviation into a marriage with Aerospatiale within the next two years. So far, Dassault has shown no signs of accepting the plan, complaining that it does not want to pay for Aerospatiale's restructuring.

Despite the loss, which includes heavy restructuring costs, Aerospatiale's underlying business is nevertheless showing signs of recovery. Revenues edged up to Fr49 billion after years of decline, operating profits grew and group orders rose by one-third to Fr30 billion. The group also shared another Fr1 billion off debt, bringing it down to Fr6.5 billion.

Profitability improved at the core aircraft business, helped by a 5.7% rise in revenues, to nearly Fr25 billion. The growth would have been above 9%, but for the weakness of the dollar.

The space and defence business also produced a "remarkable performance", with steady sales, says Gallois. Elsewhere, revenues were down, including a 5% drop for helicopters and 17% for missiles.

Source: Flight International