Airbus, which is a division of the European aerospace and defence group EADS, has increased the break-even point for the project to 420 aircrafts from last year’s forecast of 270.

The aircraft manufacturer told analysts at a presentation in Hamburg yesterday that increased costs and compensation payments for delivery delays have pushed back the point of profitability.

The Toulouse-based company has so far sold 159 of the double-decker aircraft in the six years since its official launch. It must now sell a further 261 before it can turn a profit on the project.

The A380 has a list price of about $300 million, meaning that the company must win orders worth $78.3 billion before breakeven.

Despite this daunting figure Airbus remains confident that it can eventually sell 750 of the aircraft, although analysts are becoming sceptical of this claim.

One analyst said: “The A380 is going to be a white elephant. There is no way they are going to sell that many planes.”

However, Airbus sees hope in the long life of Boeing’s 747 — the smaller rival to the A380. The 747 entered service in 1970 and after a difficult start has gone on to be an enormous success.

Airbus has been wracked by problems this year, particularly with the A380 project.

Difficulties in wiring the aircraft have led to significant production delays and earlier this month the company was forced to tell customers that it will now be delivered two years late.

A number of airlines, including Emirates, Singapore and Virgin, are reconsidering their orders, which could force Airbus to sell even more aircraft to reach break-even point.

So far this year the company has lost two chief executives and its earnings forecasts have been cut by €4.8 billion (£3.2 billion) over the next four years.

In the presentation to analysts yesterday Airbus finance official Harald Wilhelm said the company would centralise procurement and source more components from lower-wage countries.

Airbus has launched a cost-cutting programme called Power 8 to generate €2 billion in annual savings by 2010. This has sparked fears that there will be factory closures and job losses among the company’s 55,000-strong workforce.

Timeline

2000 First A380 order received. Airbus says that it needs to sell 250 of them to break even

March 2005 Airbus admits that 270 aircraft needed to break even

June 2006 Deliveries delayed by six months

July Noel Forgeard, head of EADS, and Gustav Humbert, the head of Airbus, resign

October 3 A380 delayed 18 months more; Airbus will lose €4.8 billion in revenues as a result

October 19 Break-even point put at 420 aircraft. Order book is 159

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