Record loss at DASA Daimler

RUSSELL HOTTEN

The crisis at Daimler-Benz, the German industrial giant, was underlined yesterday when its DASA aerospace division reported a record net loss of DM4.3bn (pounds 1.95bn) in 1995. The loss included provisions of DM2.3bn to cover the possibility of Fokker, its Dutch aircraft manufacturer, declaring bankruptcy.

Fokker's problems means Daimler-Benz is likely to channel more resources into the Airbus Industrie consortium, and yesterday Manfred Bischoff, DASA chairman, said Airbus would be developing a jumbo passenger aircraft to rival Boeing.

DASA's loss also included restructuring costs and DM1.2bn in provisions for a potential decline in the value of the company's order backlog if the dollar weakens against the mark. Last year's loss was up from DM438m in 1994.

Mr Bischoff said DASA had "created the preconditions to return to profitability by 1998 at the latest, even at a dollar exchange rate of DM1.35".

He said that Airbus, whose partners include British Aerospace and France's Aerospatiale, would finalise its plans for development and production of a 600-seater A3XX this year.

Mr Bischoff said development costs of the superjumbo would be $8bn to $12bn and that Airbus would consider signing up more partners to help make it. The prospect to having to invest huge sums in the project has recently been holding back BAe's shares.

There is a gap in the Airbus family of aircraft at the top end of the market, where Boeing 747 range has been a money spinner. "Boeing has seen mega deals for aircraft that we don't make. We need to expand the airbus family," Mr Bischoff said.

DASA officials said the primary demand for the large aircraft would come from Asia where long travel distances made large aircraft a necessity. Asia is also the world's fastest growing airline market.

Mr Bischoff said Airbus might consider developing the new jumbo with foreign partners, maybe including some from Russia or China. And Airbus might also form subsidiaries to make certain aircraft models.

Airbus also plans to develop smaller regional jets.