Airbus hikes aircraft prices


Airbus, the planemaking unit of EADS, announced on Tuesday a price increase for its aircraft, blaming it on a weaker dollar and higher metal prices.


The price hikes, which will apply from May 1, and the acquisition of California's PlantCML for about $350 million (Dh1.3 billion), announced earlier in the day, come as part of EADS's efforts to reduce the impact of unfavourable exchange rates on its results.


"On top of the 2.74 per cent normal escalation for the year 2007, the price increase comprises an additional $2 million (Dh7.4 million) per single-aisle aircraft and $4 million (Dh15 million) per wide-body long-range and A380 Family aircraft," Airbus said in a statement.


The dollar has shed 17 per cent of its value against the euro in the past 12 months as the single currency rose to 1.5920 on Tuesday from 1.3606 at the same time last year.


Metals prices have also gone up by at least 6.5 per cent, said Airbus, which uses titanium, steel, aluminium, and aluminium-lithium to build its aircraft.


"We have to keep pace with the world market price developments and secure profitable deals," John Leahy, Chief Operating Officer Customers, at Airbus, said in the statement.


Earlier on Tuesday, EADS said it had bought PlantCML, a California-based provider of emergency response solutions, from US private equity firm Golden Gate Capital.


EADS said in a statement the acquisition would increase earnings per share in the first year, and PlantCML would become part of EADS North America's business portfolio.


The European planemaker has plans to shift production to dollar-zone countries to help combat the currency headwinds. (Reuters)