Airbus parent EADS swung to a third-quarter operating loss after delays to the A380 superjumbo programme that have scared off major customer FedEx led to 1 billion euros (#671.1 million) in charges.
The loss before interest and taxes and before goodwill impairment and exceptional items was 239 million euros (#160.4 million), compared with a year-ago profit of 559 million euros (#375.1 million).
"The struggle to reverse the A380 problems imposes a severe burden on our financial performance," said EADS cochief executives Tom Enders and Louis Gallois in a statement.
"This together with the dollar devaluation requires drastic measures to remain competitive. Therefore the Power8 (cost-cutting) programme in Airbus and structural streamlining of the group has top priority."
Airbus received a further major blow on Tuesday when FedEx said it cancelled its order for ten A380-800F freighter aircraft because of delivery delays, opting instead to buy planes from rival US planemaker Boeing.
EADS finance head Hans Peter Ring meanwhile cast doubt over the A380 freighter version - UPS had ten on order, while International Lease Finance Corporation had five.
"If you talk about the still remaining customers, we obviously need to get them reconfirmed, that's clear because all of them are in the cancellation zone, I would say, with the announced delays," Mr Ring said.
"Depending on that, the freighter development will continue or probably we will have to take another decision whenever the customers made up their mind finally."
The biggest buyer of the world's biggest plane, Emirates, said last month it would send its own audit team to Airbus before entering talks to address the A380's two-year delay. Emirates has 43 of the $300 million (#158 million) planes on order.
Investors - and aerospace component firms in the West Midlands - are also keen to hear news on whether EADS plans to go ahead with the development of the A350 XWB mid-sized aircraft, crucial if Airbus wants to take on Boeing's fast-selling 787 Dreamliner.
EADS yestesrday said its board would make a decision on the future of the A350 XWB "in the weeks to come". The Power8 programme would be "crucial" for the funding needs of the A350, should it go ahead, Mr Ring said.
Depending on the decision, contract charges would have to be taken in the fourth quarter, he added. The A350 charge would be up to 800 million euros (#537 million) in the "worst case".
EADS has repeatedly reassured investors in recent months that the Airbus A400M military transporter was on schedule.
Mr Ring said the company would share the conclusions of an internal technical assessment of the programme in a few weeks. EADS failed to issue a new operating earnings forecast for the full year after withdrawing it last month amid a crisis over the A380 that the company s aid would create a 4.8 billion-euro (#3.22 billion) profit shortfall in coming years.
But it repeated its July forecast that EADS would achieve full-year revenues of "well above 37 billion euros" (#24.8 billion) based on "430 Airbus aircraft deliveries in 2006 and strong contributions from its helicopters, defence and space businesses".
Third-quarter sales rose 14 per cent to 8.489 billion euros (#5.69 billion), beating forecasts, boosted by all EADS's divisions. Airbus contributed 5.416 billion euros (#3.63 billion) of revenues.
Excluding the "one-off impact of the A380 issues, the underlying performance of Airbus is strong," Kepler Equities analyst Pierre Boucheny wrote. But he added: "Market concerns will not be offset by them."
EADS's stock has been hammered this year, falling 30 per cent in the last six months and currently trading at just 12.5 times estimated 2007 earnings, compared with multiples of 17 for Boeing.