Troubled by cost overruns on two of its biggest airplanes - European Aeronautic, Defence & Space Co. has scrapped its annual dividend for the first time since 2000 when the company was formed by the merger of DaimlerChrysler Aerospace of Germany, Aérospatiale-Matra of France, and Construcciones Aeronáuticas of Spain.

The company which has headquarters in Paris, Munich and Netherlands posted a net loss of €763 million or $1.04 billion, after net income of €1.57 billion for 2008. EADS predicted a flat year in term of revenue and predicted pretax earnings of €1 billion. EADS lifted its annual savings target to €350 million. Revenue for 2009 fell 1.2 per cent to €42.8 billion in 2009 from €43.3 billion a year ago.

The parent company of Airbus, which accounts of two thirds of EADS's revenue, last year struggled with costs on the A400M military plane as well as the A380 superjumbo, both of which are running at least four years behind schedule. EADS also said that it has decided to cancel its bid for the US Air Force's $35 billion tanker program.