Airbus, the crisis-laden European aircraft maker, outlined drastic turnaround measures yesterday, revealing plans to cut four fifths of suppliers from its roster alongside a cost-cutting programme that would mean the loss of hundreds of jobs.

Airbus, which has been badly hit by costly delays for its A380 superjumbo, said that it would reduce the number of suppliers that it uses from 3,000 to 500 as it seeks to cut €350 million (£235 million) from its annual costs by 2010. The company, a unit of EADS, the European defence and aerospace group, hopes that by whittling down its roster of suppliers it can force down the price of the goods and services they provide by buying in greater bulk.

EADS, which announced the loss of about 70 jobs, about 10 per cent of the total, at its head offices in Paris and Munich last month, is also set to cut hundreds more positions among Airbus administrative staff.

Airbus also plans to cut €900 million from its annual administrative costs, a large part of which would come from reductions in staff.

A spokesman would say only: “I can confirm the number of suppliers that will be cut, but for the time being I do not have any information on who will be cut and how the cuts will be made.”

The cost-cutting plans emerged after a difficult few months at EADS. In June, its share price dropped by 26 per cent after the company gave warning that a new six-month delay in delivering the Airbus A380 would wipe €2 billion off its earnings over the following four years.

A month later Noël Forgeard announced his resignation as joint chief executive of EADS and chief executive of Airbus after it emerged that he had made a €2.5 million profit for himself and €400,000 for each of his three children by exercising stock options in March. Three months later EADS announced the delay of the A380.

Christian Streiff, his replacement as Airbus’s chief executive, lasted less than 100 days, leaving the company after a battle for more autonomy to implement restructuring plans. He was replaced by Louis Gallois.

Last month EADS added to the bad news when it said that the A380 would be delayed by a further year, wiping a further €4.8 billion off forthcoming profits.

Airbus is set to discuss the possibility of abandoning the planned launch of the mid-sized A350 XWB aircraft at a board meeting today, although no immediate decision is likely to be made.

At the end of last month EADS further tightened control of the management of Airbus by replacing its chief financial officer with Hans Peter Ring, EADS’s chief financial officer. Mr Ring will hold both positions from January. Andreas Sperl, who had been the Airbus finance chief since 2000, will move elsewhere in the group, the company said.

The merger of the two roles mirrors the appointment of M Gallois, who joined the group as EADS chief executive as well as heading Airbus.

SHIFTING E.T.A. AND OTHER AWKWARD TIMINGS

October 2006: EADS issues a fresh profit warning, this time for €4.8 billion. The launch of the A380 is put back for a further year

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