"With the good results from Airbus and a pickup in space activities we can confirm an improvement in prospects for 2004 and beyond," EADS co-chief executive Philippe Camus told reporters accompanying him on a trip to Thailand.

He said the group, which holds an 80 percent stake in Boeing's chief rival Airbus, expected operating profit to reach 2.2 billion euros (2.9 billion dollars) this year on sales of 32 billion.

EADS had previously forecast operating earnings before interest and taxation of 2.1 billion euros and sales of 31 billion.

Camus also voiced confidence in the outcome of talks with the British government on a 13-billion-pound (18.8-billion-euro, 24-billion-dollar) contract to supply the Royal Air Force with air tankers.

"Negotiations are going very positively and I am convinced we are close to a favorable conclusion," he said.

A source familiar with the matter said Wednesday discussions on the deal with a consortium led by EADS has seen "substantial elements" agreed since September, adding that a deal could be struck by late December at the earliest.

EADS earlier in the day reported net profit of 597 million euros in the first nine months of the year, up from 242 million in the same period last year, on sales that rose 16 percent to 21.5 billion euros.

At the operating level earnings before interest and taxation shot up to 1.5 billion euros from 784 million a year earlier.

Camus made it clear that the healthy performance this year was due to a stronger demand in the civil aviation sector.

"We see air traffic recovering and plan to deliver at least 315 Airbus planes this year," he said, adding that in 2005 he expected "double-digit growth" in Airbus deliveries from the 2004 figure.

Airbus in the first nine months delivered 224 planes, compared with 199 in the January-September period of 2004. The company reported 305 deliveries in

The Airbus unit, also 20 percent owned by BAE Systems of Britain, had operating profit of 1.382 billion euros in the first nine months from 701 million in the same period of 2003.

EADS said its overall orders were down 58 percent to 20.603 billion euros in the first nine months. Camus stressed that the decline reflected an exceptional performance last year, notably 20 billion euros' worth of orders for the future Airbus military aircraft, the A400M, and 21 orders for the superjumbo A380 civilian airliner.

EADS said a decline in the value of Airbus orders in the fist nine months, from 37.028 billion euros last year to 10.547 billion, was offset by an increase in orders received by the group's space and defense divisions.

Overall EADS orders in the period edged up to 179.7 billion euros from 179.3 billion in the first nine months of 2003.

In the space division, losses in the first nine months were cut to five million euros from 184 million last year. But in the third quarter the unit managed to turn a profit of six million euros.

"We will see a positive contribution from space activities this year," Camus said.

EADS shares were slightly lower in mid-morning trading here, down 0.91 percent at 22.78 euros on a generally weaker market.

Traders, who welcomed the group's financial results, said the slide reflected profit taking and a weaker dollar.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.