Airbus cuts A330 output, first-quarter profit capped by engine delays

People celebrate near an Airbus A330neo aircraft after its maiden flight event in Colomiers near Toulouse, France on October 19, 2017. (Reuters)
Updated 27 April 2018
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Airbus cuts A330 output, first-quarter profit capped by engine delays

  • Europe’s largest aerospace group said it was reducing deliveries of the 250-300-seater A330 aircraft to around 50 in 2019
  • Analysts were on average expecting a €23.9 million operating loss on revenues of €10.209 billion

PARIS: Airbus bowed to weak demand for its A330 passenger jet on Friday, announcing a cut in production for 2019 after a series of bruising defeats to Boeing in contests for wide-body jets.
Europe’s largest aerospace group said it was reducing deliveries of the 250-300-seater to around 50 aircraft in 2019, without giving a figure for its previous plans.
Airbus delivered 67 of the jets in 2017, implying a cut of as much as 25 percent in output based on steady volumes this year — though some analysts see production starting to dip as early as this year as orders dry up.
The production came as Airbus posted a slender — though better than expected — core profit in the first quarter after delays in engine deliveries for its smaller A320neo.
Together the A320 and A330 families, which feature updated versions of its most successful airframes, generate most of the cash and income needed to support future developments and other activities within the maker of airplanes, rockets and fighters.
While the narrowbody A320neo remains a best-seller, with Airbus recently unable to produce the jets fast enough due to engine supply problems, the upgraded A330neo has been losing ground to the newer Boeing 787 at carriers like American Airlines and Hawaiian Airlines.
“We knew (the first quarter) was going to be grisly – and it is,” said Jefferies analyst Sandy Morris in a note.
“The A330 going down to 50 (a year) is overtly bad news, but we have suspected for some time the A330’s slow sales could mean A350 production moves up at some point,” he added.
Airbus reported an adjusted quarterly operating profit of €14 million, compared with a restated year-earlier loss of 19 million. Revenues fell 12 percent to €10.119 billion. Airbus reaffirmed financial forecasts, however.
Analysts were on average expecting a €23.9 million operating loss on revenues of €10.209 billion, according to a Reuters poll.
Airbus has said it expects deliveries to be once again heavily weighted toward the latter part of the year, as industrial problems felt by engine makers Pratt & Whitney and to a lesser extent CFM International start to ease.
The earnings statement did not refer to plans to increase A320neo output further than planned in 2019, to 63 aircraft a month from a previous target of 60, as disclosed earlier this week.
The head of French engine maker Safran, a partner in CFM alongside General Electric, expressed caution over the plans on Wednesday, saying it was too early to commit to higher output as suppliers work through what is already a record production ramp-up to meet air travel demand.


Search engine Baidu becomes first China firm to join US AI ethics group

Updated 17 October 2018
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Search engine Baidu becomes first China firm to join US AI ethics group

  • The Partnership on AI (PAI), which counts Alphabet Inc’s Google, Apple Inc. and Facebook Inc. as members, is a body that develops ethical guidelines for AI research
  • Baidu’s inclusion in the group comes as Chinese and US companies are looking to ramp up cooperation on AI

BEIJING: Chinese search engine Baidu has become the first Chinese company to join an artificial intelligence (AI) ethics group led by top US tech firms, amid wider political clashes over AI competition between China and the US.
The Partnership on AI (PAI), which counts Alphabet Inc’s Google, Apple Inc. and Facebook Inc. as members, is a body that develops ethical guidelines for AI research, including ensuring research does not violate international conventions or human rights.
Last year China’s industry ministry named Baidu as one of four national AI champions, and the search firm has invested heavily in autonomous driving and deep learning in recent years.
“Baidu’s admission represents the beginning of PAI’s entrance into China. We will continue to add new members in China and around the world as we grow,” said PAI in a statement on Tuesday.

 

Baidu’s inclusion in the group comes as Chinese and US companies are looking to ramp up cooperation on AI, despite a looming political scuffle between the US and China over technology transfers.
Last year China set out a roadmap to become a world leader in AI by 2025, with plans to invest roughly $400 billion in the industry in the coming years.
The ambitions have rankled the US government, which has discussed plans to bolster security reviews of cutting-edge technology, including AI, over fears that China could access technology of strategic military importance.
China’s AI roadmap encourages technology sharing between private, public and military research groups.
Despite the clash, US companies have expanded their AI presence in China while Baidu and other Chinese firms have launched AI research labs in the US.
Last month China’s cyber ministry hosted Google, Amazon Inc. and Microsoft Corp. at its annual AI forum. All three companies have launched AI research labs in China over the past year, despite tightening censorship and data restrictions that limit the companies’ involvement in the market.
At the forum, top government officials stressed that China’s development of AI technology would be ethically conducted, adding that they have plans to retrain workers who lose their jobs to AI.

Decoder

China’s AI roadmap encourages technology sharing between private, public and military research groups.