EADS pledges to protect 9 billion euro cash pile

NEWPORT, Wales (Reuters) - European aerospace group EADS (EAD.PA) pledged on Tuesday to make conserving cash its top priority during the financial crisis as it considers propping up plane sales to crisis-hit airlines with financial incentives.

The Airbus parent reported a surplus of some 9 billion euros (8.3 billion pounds) at the end of last year as 2008 revenue rose to around 42 billion euros from 39 billion the year before.

But its order intake fell to around 90 billion euros from 137 billion in 2007, reflecting a decline in new business as airlines battle through the downturn.

"The 2008 performance is globally satisfactory. EADS is back to business," Chief Executive Louis Gallois said.

"But now we are facing the financial crisis and the economic downturn changes our perspective," he told a news conference.

"The full effects are still unclear and in part are ahead of us ... EADS has been through the financial crisis without injury so far thanks to its cash and that is a lesson learned. Protection of cash in such a crisis is first priority."

Gallois said Airbus, which recently shelved plans to increase production of single-aisle jets, would go further and act as needed to balance supply with demand as "we want to avoid an increase in inventories."

He said EADS, which has been targeting defence or services acquisitions in the United States, would not carry out a "major acquisition" until the financial market recovers.

"We have for this reason abandoned a significant acquisition in the defence field in the United States."