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Airbus group logo is displayed in Toulouse, south of France. The company reported fourth quarter results Thursday.

Manuel Blondeau/The Associated Press

Airbus said on Thursday it expected to stop burning cash in the fourth quarter, giving investors the first glimpse of a path out of the coronavirus crisis after speeding up deliveries to cash-strapped airlines.

The European planemaker said the first formal target since it halted annual guidance in April remained intact after France announced a new nationwide lockdown overnight.

Chief Executive Guillaume Faury said Airbus had learned much about how to adapt during the seven-month-old crisis.

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But he also cautioned that airline traffic was taking longer than expected to recover from the dramatic hit seen at the start of the pandemic when airlines were forced to ground fleets.

“We believe we will have to live with the circulation of the virus for a long period of time,” Faury said.

Airbus shares fluctuated as concerns about the pandemic vied for attention alongside upbeat cash guidance and better-than-expected core operating profit, which excluded a 1.2 billion euro restructuring charge.

By mid-morning they were down 1.5% after rising 2.5%.

Underlying third-quarter operating profit fell 49% to 820 million euros as revenue fell 27% to 11.2 billion, beating market forecasts on profit but falling short on revenue.

Addressing concerns of investors across the aerospace industry, the focus of the quarterly update was on efforts to preserve cash, which depend heavily on aircraft deliveries.

Airbus reduced an overhang of 145 aircraft that it had been unable to deliver during the crisis by 10 units to 135 jets.

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It has shored up deliveries partly by striking storage agreements with airlines unable to put jets directly into service. But some industry sources said a new lockdown in France raised new questions about its ability to deliver jets smoothly.

Some airlines have already privately expressed reluctance to send staff to Europe to take delivery, though Airbus said it expected deliveries to stay broadly in line with production.

It did not reintroduce delivery targets, but people tracking the schedule say it appears to be aiming for anywhere between 500 and 550 handovers in 2020, down from 863 in 2019.

PRODUCTION HIKE

Faury defended plans to ask suppliers to support a hike in monthly output of the A320neo family to 47 from 40 in third-quarter 2021 if demand permits. Such medium-haul jets are expected to lead the industry out of its worst crisis.

Confirming a Reuters report, Faury said those plans already reflected the more tepid recovery because they had been delayed by three months from a previous, unannounced plan.

But suppliers worry in case Airbus is unable to meet the new goal, leaving them with bills for investing in new capacity.

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“Suppliers will draw their own conclusions,” said one source involved in efforts to boost the fragile sector.

With long-distance travel still hampered by border restrictions and weak business confidence, Faury said output of bigger aircraft like the A350 would not go up any time soon.

Some analysts expect Airbus to cut wide-body rates again after halving A350 output to five a month. Insiders say Airbus has already dabbed the brakes to bring output to 4.5 a month.

Airbus also shed more light on a recent bid to smooth a long-running trade row with Boeing and the United States over aircraft subsidies by resetting the terms of French and Spanish government loans, saying this had cost 236 million euros.

The loans have been ruled illegal by the World Trade Organization, leading to U.S. tariffs on European goods.

The European Union this week won the right to put its own tariffs on U.S. goods over Boeing subsidies that the WTO has also ruled illegal. Both sides claim to have canceled any past illegal support and are sparring over a possible settlement.

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Airbus is meanwhile steeling itself for an acrimonious divorce between Britain and the European Union as trade talks go down to the wire.

Faury said Airbus had reactivated planning for a worst-case no-deal Brexit, though he did not expect this to be needed.

It builds wings for virtually all its jets in Britain, where it employs 14,000 people. Its other main plants are in France, Germany and Spain, with outposts in China and the United States.

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