(Corrects "1,046 billion" to "1.046 billion" in para 8)
PARIS, Dec 5 (Reuters) - Airbus and its engine makers haveacted to try to shore up the value of second-hand A340 aircraftas the European planemaker tries to reduce its financialexposure to depressed market values of an aircraft that it nolonger produces.
Airbus has told bankers, airlines and other owners of theaircraft that it is working on plans to increase the maximumcapacity by 8 percent to 475 seats in a bid to make it moreattractive to airlines looking to replace Boeing 747-400s.
Britain's Rolls-Royce is also restructuring engineservice contracts so that airlines can maintain the aircraft'sfour engines for a similar cost to servicing the two GeneralElectric engines on the rival 777-300ER, according toindustry presentations released on Thursday.
The move comes after parent EADS said in its 2012 annualreport that Airbus was "currently engaged in taking mitigationaction to reduce the impact of asset value guarantees fallingdue in the coming years relating to A340s in particular".
Airbus stopped making the A340 in 2011 after improvements inengine technology caused airlines to switch to two-enginedmodels such as the Boeing 777 and, in future, the A350.
But it has been left with a financial exposure to theaircraft after issuing guarantees underpinning its resale pricewhen striking deals to sell it during a period of weak demand.
Additionally, it faces potential losses on deals to buy backold A340s as it sells new aircraft of other types, peoplefamiliar with the matter said.
As of 31 December 2012, EADS had 1.046 billion euros ofasset value guarantees outstanding, excluding 333 million euros where the risk of execution was considered to be remote.
It says the risk covers just part of the residual value ofthe aircraft and is included in total EADS provisions for assetvalue risks of 712 million euros, as of Dec. 31 last year.
The company does not break out the guarantees by plane typebut analysts say the A340 makes up a significant share.
Industry sources say airlines have begun breaking up oldA340s because their parts are sometimes worth more than the costof scrapping the plane. Some have been trying to sell thembecause of the perceived inefficiency of running four enginesinstead of the now-standard two engines on long trips.
Some 25 second-hand A340s are currently posted for sale.
Airbus officials urged a special meeting of A340 ownershosted by Airline Economics to reconsider the value of thefour-engined aircraft and argued it could hold its own as aninterim long-haul plane before the arrival of the new A350.
Airbus said it is working to get the plane certified for 475seats in all-economy seating. (Reporting by Tim Hepher; Editing by Sonya Hepinstall)