Airbus shares slump after 2016 profit warning

BERLIN/GENEVA (Reuters) - Shares in AIRBUS (EAD.PA) suffered their worst drubbing in more than six years on Wednesday after the planemaker predicted flat profits in 2016, a year in which investors had expected it to start feeling the benefit of new and recently upgraded models.

The world's second-largest planemaker after Boeing was also forced to scrap a ceremony to mark the first delivery of its new A350 jetliner to Qatar Airways on Saturday, after the Gulf airline said it was delaying the handover indefinitely.

Analysts said the rebuff from the airline, which is famously picky about accepting new aircraft and is widely believed to use such tactics to obtain last-minute concessions, was overshadowed by concerns over the model it replaces, the A330.

Airbus, which has already announced plans to cut A330 production by 10 percent to 9 aircraft a month, said it would have to cut production again in 2016 to an unspecified level. That signals it is struggling to find buyers for the current model ahead of a mid-term upgrade called A330neo in 2017, as well as a sharp output ramp-up for the all-new A350.

"The most critical years are 2016 and 2017," Chief Executive Tom Enders told analysts at an annual investor conference.

Partly as a result, Airbus said core operating income would return to growth in 2017, whereas some analysts had been expecting double-digit improvements as early as 2016.

That gap helped push Airbus Group shares down 10.4 percent to close at 43.175 euros, their lowest level since mid-October and the biggest one-day percentage fall since July 2008.

Aerospace analyst Rob Stallard said the transition between current models and new ones, which also affects the smaller A320 family, was a bigger drag on profits than expected.

For the time being at least, he and other analysts advised against reading too much into the A350 delay.

Airbus has targeted the first delivery by year-end.

"The plane is ready; it's on the tarmac. I'm confident delivery will be very soon," Enders told analysts.

Qatar Airways is the biggest customer for Airbus's new-generation wide-body aircraft. It has in the past refused to take delivery of aircraft from both Airbus and Boeing , citing what it describes as its exceptionally high standards.

This year, it accepted the first delivery of an Airbus A380 superjumbo in September after a three-month delay blamed on a dispute over the quality of cabin fittings.

The A350 is Airbus' newest, most technically advanced jet. The A350-900 is designed to seat 314 passengers and will be in direct competition with Boeing's 787 Dreamliner.

(Additional reporting by Maria Sheahan; Editing by Mark Potter)

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