=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/01/14/f= inancial0843EST0028.DTL ---------------------------------------------------------------------- Tuesday, January 14, 2003 (AP) Airbus maintains production target of 300 planes for 2003 JAMEY KEATEN, Associated Press Writer (01-14) 05:43 PST PARIS (AP) -- Airbus president Noel Forgeard expects 2003 will be a tough year, but sa= id Tuesday the European plane maker is maintaining its production target of 300 commercial aircraft. Aviation analysts and executives expect Airbus to surpass Chicago-based Boeing Co. for the first time in airplane deliveries this year. Boeing said last week it expects to deliver 275 to 285 commercial planes in 2003. But they acknowledge it's hard to make accurate projections these days. "I think 2003 will be an extremely difficult year," Forgeard said in Par= is at an annual news conference about the state of the company. Any deterioration in the economic outlook could lead Airbus to revise its targets, he said. The European consortium also faces uncertainty over a troubled airline industry and the prospect of a new Iraq war. "Many major carriers are still shaky," he said, referring to the airlines that make up Airbus' main customer base. "Expectations of growth are at best meager in the largest economies." "International tensions further cloud the picture," Forgeard said. A delayed or extended conflict in Iraq could cause airlines to delay their purchase plans, executives said. Forgeard said Airbus' production -- which has been above 300 planes a ye= ar for the last three years -- can fall as low as 280 per year before the company would need to lay off workers. On the upside, Forgeard said Airbus is expected to have limited exposure to a wobbly U.S. market. It plans to deliver 50 planes to American customers this year, down from 90 last year. Two Airbus customers, US Airways and United Airlines, have filed for U.S. bankruptcy protection. Forgeard said Airbus has no financial exposure to United and only minor exposure to US Airways. Airbus has more exposure to U.S. carrier Northwest Airlines, which is awaiting delivery of 61 Airbus planes. But Forgeard said Northwest is healthy, adding: "The situation does not worry us." Airbus, a unit of European Aeronautic Defense and Space Co., has filled market niches for intermediate-range planes with the single-aisle A320 family and the twin-aisle A330-200 -- alternatives to Boeing's popular 737 and the wide-body 767. In a sign that Airbus has grown more confident about its market position, Forgeard said it has raised prices for its planes by an average of 2.5 percent for 2003. Airplane makers regularly grant discounts to their customers, but the mo= ve by Airbus to raise catalog prices marks the first time it has done so without following Boeing's lead. "Progressively, we have to assume the responsibilities of a leader -- which is in some respects to set the trend" on issues like pricing, Forgeard said. John Leahy, who heads Airbus' commercial aircraft business, acknowledged that Boeing dominated the market in the 20th century, but said Airbus now builds planes with more passenger comfort, fuel efficiency, range and payload. "That's one of the reasons why I think our aircraft, even in a down market, can justify a price increase," Leahy said. Last year, Airbus shipped 303 planes with 100 seats or more, down from 3= 25 in 2001 and fewer than the 381 deliveries reported by Boeing. Revenues at Airbus declined 4.9 percent to 19.5 billion euros ($20.5 billion) in 2002. Airbus received 233 confirmed orders last year, valued at $24.3 billion, which included the single largest order of 2002 -- 120 planes for low-cost British carrier easyJet. Boeing clinched 176 confirmed orders last year. On the Net. Airbus: www.airbus.com/ =20 ---------------------------------------------------------------------- Copyright 2003 AP