Airbus Lost $200 Million in ’98 Amid Price Cuts

Airbus Industrie lost $200 million in 1998 as it cut prices to compete with rival Boeing Co., though its partners made a profit from supplying parts for Airbus planes, according to a report Thursday by British Aerospace.

British Aerospace said its 20% stake in the European plane maker showed a loss of $40 million, even though most of the aerospace company’s $19.2 million in profit from commercial aircraft came from supplying wings for Airbus jets.

Airbus said it paid more to its suppliers, which are also its shareholders, than it earned from the sale of aircraft. A bruising price war between the world’s two biggest plane makers has forced the price of commercial jets down 20% in two years, squeezing margins to about 3%.

Airbus operates as a risk-sharing partnership and doesn’t release annual reports. If Airbus operated as a company and included the production assets of its four partners--British Aerospace, France’s Aerospatiale, Germany’s Daimler-Chrysler Aerospace (Dasa) and Construcciones Aeronauticas (Casa) of Spain--it would have been profitable, it said.

In Other Aerospace News: Pratt & Whitney said Thursday that it won a contract worth about $3 billion from UPS Airlines, one of the largest jet engine orders in recent years. The contract is to supply PW4000 engines for as many as 75 new Airbus Industrie A300 freighter aircraft ordered by the unit of privately held United Parcel Service of America Inc. East Hartford, Conn.-based Pratt & Whitney, a unit of United Technologies Corp., said it will maintain the engines for 20 years under the deal, which also includes an option for UPS to order engines for 45 more aircraft.