The profit increase would mainly be driven by the recovery at EADS' space unit, where restructuring is still on track with the division tipped to reach the breakeven point in earnings this year, the parent company said.

An upturn in commercial aviation is expected for 2005 and until then EADS is counting on growing defence sales to keep the global figure stable at around 30 billion euros, compensating for the impact of a weaker dollar and fewer Airbus deliveries.

The company expects deliveries in 2004 at its Airbus division to be little changed from 2003, at 300 planes.

Joint chief executives Philippe Camus and Rainer Hertrich said the airline industry is slowly recovering but that it remains under pressure.

They said they have set "realistic targets" for 2004, and still target double-digit earnings margins in the medium-term.

EADS said its sales target is based on the assumption of a weaker dollar than in 2003, at 1.20 dollars per euro, compared to 1.10 last year.

The strongest drivers of growth this year will be the A400M military transporter, the Tiger and NH90 helicopters and missile programmes.

WAR.WIRE