Airbus, the European aircraft manufacturer, slumped to a record loss last year as weakness in the US dollar wiped more than €1 billion (£764 million) from the company's earnings.

Airbus has been among the companies hardest hit by the declining value of the dollar and it may be forced to move work out of the eurozone to limit future damage.

Aircraft are priced in dollars but Airbus's costs are nearly all in euros, which makes the company highly sensitive to exchange-rate movements.

A boom in the aerospace market did enable Airbus, which employes 12,000 people in the UK, to increase revenues to €25.2 billion last year and its order book stands at €284 billion but despite the positive trading environment, the company still lost money.

Airbus's losses nearly doubled to €881 million as the dollar impact, cost of restructuring and delays to its A380 programme mounted.

The losses at Airbus also dragged its parent company, EADS, into the red. The group's overall profit was down from €52 million in 2006 to a loss of €399 million last year. Loius Gallois, the chief executive of EADS, said: “I am not happy with the 2007 figures but I believe their underlying strength will allow an improvement in performance as we move forward.”

Two weeks ago EADS won a $40 billion (£20 billion) order from the US Department of Defence for 179 air-refuelling tankers, which will be based on its successful A330 airframe. These aircraft will be built in Mobile, Alabama, and EADS is understood to be assessing whether commercial production of the A330 could also go there. Such a move would be controversial in Europe, where Airbus is regarded as an industrial icon and an important employer.

The strategy may also be derailed by Boeing, which lost out to EADS in the US tanker competition. Boeing said on Monday that it would formally challenge EADS's victory in the tanker competition despite the Pentagon's assessment that the US-based company offered an inferior product.

Jim McNerney, Boeing's chairman and chief executive, said: “This is an extraordinary step rarely taken by our company, and one we take very seriously.”

The selection of EADS and its US partner, Northrop Grumman, has become a contentious political issue in the US.

John McCain, the Republican Party's presidential nominee, was criticised yesterday after it emerged that two of his top advisers lobbied on behalf of EADS and Northrop Grumman before joining the senator's campaign. Mr McCain was instrumental in blocking a 2002 deal that would have handed Boeing the tanker contract without competition.

Hillary Clinton and Barack Obama, the Democrat presidential candidates, have both expressed concern that the tanker work will go to a European company.

Mr Gallois said: “We have the feeling that the tanker process was very transparent and fair and professional. It is not by chance that we won, having won the last five international competitions for tankers.”

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