Gearbox problems for Airbus as earnings fall

AIRBUS has reported a 23% plunge in earnings to £390m and warned it faces serious challenges linked to its A400M military plane.

Chief executive Tom Enders said: “On the military side, we are now facing a serious challenge for production and customer deliveries of the A400M due to new, unexpected issues on the engine propeller gearbox.

“It’s very frustrating but we’ll have to work through this with our engine partners.”

Europe’s biggest aerospace company said revenue ticked up 1% to £9.4bn.

Net income fell 50% to £310m, compared with £617m in the same period last year, when profits were boosted by a big asset sale.

The firm said it is maintaining its growth forecasts for 2016.

“Despite these challenges, we maintain our 2016 guidance and also our earnings and cash growth story for the coming years based on our strong commercial order backlog