EADS, the firm that owns 80% of the aircraft maker Airbus, has said it expects to meets its profits and sales targets this year, despite a huge drop in orders for new planes.

Orders for Airbus jets slumped by 93% in the during the first three months of the financial year, reflecting the downturn in the aviation industry following the 11 September attacks on Washington and New York.

But the company managed to post a small rise in profits.

"We see the first signs of a turnaround in commercial aviation," said EADS.

Uncertain outlook

New orders were worth 3.8bn euros ($3.46bn; �2.38bn) in the first three months of this year.

That yielded a total order book of 179.5bn euros at the end of March 2002, compared to 183.3bn euros a year earlier.

EADS also reported a modest rise in core profits, up 2% to 315m euros when calculated on an earnings before interest and tax basis (EBIT).

But some analysts were doubtful about the strength of the firm's performance and prospects as many airlines are still struggling in an overcrowded market.

"The underlying EBIT was down and there was a conspicuous lack of guidance about 2003," in the firm's statement, said Nick Cunningham of Schroder Salomon Smith Barney.

'Dismal' market

Core profits were supported by 122m euros of exceptional gains from the sales of Aircelle, plus streamlining costs and favourable currency movements, he said.

"We still believe that the dismal state of the airline industry...will lead to lower sales than Airbus expects next year and the year after," said Mr Cunningham.

EADS, the world's second biggest aircraft maker after Boeing, said it expected to achieve sales of 30.8bn euros this year and core profits of 1.2bn euros.

EADS shares rose in early trade but slipped back by midday on profit-taking and were trading at 17.82 euros just after midday in Paris.