Aero-News.Net reports that the global recession is beginning to hit the aerospace industry pretty hard:
On another day — and in nearly any other global economic climate — the news shared Tuesday with investors in European Aeronautic Defense and Space Corp. (EADS) would be cause for celebration: after posting massive losses in FY 2007, EADS turned things around in 2008 with a net profit of nearly $2 billion US. Analysts believe, however, the future holds a far gloomier picture for the aerospace consortium.
EADS added that profit, fueled by record deliveries for planemaker Airbus, came despite some $894 million in losses in 2008 tied to the stillborn A400M military transport program. But as the market for commercial airliners continues to evaporate in the current economy — and the threat of massive cancellations against the current order backlog looms overhead — EADS will find it increasingly difficult to absorb such losses, Bloomberg reports.
Indeed, EADS admits the future looks rather bleak. The company expects pre-tax earnings will drop precipitously from last year’s $3.6 billion figure, as the market for Airbus planes continues to shrink.
Yikes! This will certainly raise questions about the consortium’s ability to continue to put money into a number of projects, including Astrium’s planned suborbital tourism vehicle. With rivals Virgin Galactic and XCOR both moving forward and the economy still in the tank, is there even a market for a third tourism vehicle?
We’ll see what happens.