With its profits impacted by dollar rates, European Aeronautic Defence & Space Co (EADS), the owner of Airbus, is initiating talks with airlines, customers of its aircraft, to make payments to it in euros instead. This will act as a hedge against currency exchange losses from the US dollar, the company's chief financial officer said.
''The challenge is to identify airlines in Europe and Middle East who have a mirroring exposure to what we have,'' Hans Peter Ring, EADS's top financial officer, told reporters in New York.
''We're long on the dollar and they're short on the dollar probably and this would be a win-win if we can identify that'' and get them to pay in euros.
With the euro climbing 5.9 per cent this year to reach $1.42 against the U.S. currency, EADS is urging its suppliers to shift their production to dollar zones if they are to minimize exchange-related losses.
EADS is now urging its suppliers in Spain, Germany and France to shift to US currency zones like Mexico or low-cost production centres, Ring said.
The component makers ''have the same pressure we are facing but the real challenge is some of those suppliers don't have the same balance sheet as we do,'' he said. ''The only way to escape for them is to move into dollar countries or into low-cost production areas.''