Airbus ups aircraft prices, buys U.S. company

PARIS (Reuters) - Airbus, the planemaking unit of EADS, announced on Tuesday a price increase for its aircraft, blaming 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, announced earlier in the day, come as part of EADS’s efforts to reduce the impact of unfavorable exchange rates on its results.

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

The dollar has shed 17 percent 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, aluminum, and aluminum-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 U.S. 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.

EADS strategy chief Marwan Lahoud confirmed the group’s ambitions in the United States in an interview with French daily newspaper La Tribune due for publication on Wednesday.

“There are several deals in the pipeline that we are following. Our target remains defense, security and services that are countercyclical activities in relation to our commercial aviation activity,” Lahoud said when asked about EADS’s U.S. projects.

“We target to go from $1 billion non-Airbus sales today to $10 billion in 2020. We aim for a first stage of around $5 billion in the next three years.”

Reporting by Marie Maitre and Gilbert Kreijger, editing by Will Waterman/Elaine Hardcastle