By Victoria Bryan and Cyril Altmeyer
MUNICH (Reuters) - Airbus Group (AIR.PA) defied warnings of a slowdown in the jetliner market with a steep production boost for its top-selling A320 and announced its biggest ever dividend.
The firm's confidence about demand and a switch to the new A320 model lifted its shares and came despite a fresh charge of 551 million euros (401 million pounds) due to delays to the A400M military transporter.
The world's second-largest aerospace group after Boeing (BA.N) said it would increase production of the A320 jet family to a record 50 a month in early 2017.
Both the scale and accelerated timing for the move, confirmed details reported by Reuters earlier this week..
The confidence shown by the production boost overrode concerns about a simultaneous "temporary" drop in production of the wide-body A330 jet, which is enduring slow sales ahead of its own revamp in 2017.
Both models are seen as cash cows for the company.
The A330 production rate was cut to six a month from the first quarter of 2016, having already been cut to nine a month from the fourth quarter of this year.
"Airbus has bitten the bullet on the A330," said Edison Investment Research analyst Sash Tusa, adding that the move was widely expected.
The hike from 42 A320s a month to 50 by the first quarter of 2017, closely chasing Boeing's plans for its 737, "could to an extent offset the A330 effect in that year," he said in a note.
Airbus Group Chief Executive Tom Enders dismissed recent market concerns that the commercial aerospace cycle has peaked.
"We have heard that last year and the year before," he told a news conference. "We don't see it as long as the world doesn't come tumbling down. The demand is clearly there."
Shares in Airbus have had a rocky ride of late. Five billion euros was wiped off the value of the company when A330 output first showed signs of wobbling in December, though shares had recovered ahead of the 2014 results.
The strong fourth quarter results and 60 percent hike in the dividend, as well as solid cashflow, added 2.5 billion euros or six superjumbos' worth of value to its shares on Friday.
At mid-session they were up 7 percent at 55.29 euros.
Core operating earnings before one-off items rose 21 percent to a stronger-than-expected 1.476 billion euros in the fourth quarter on revenues up 9 percent, amid strong jet deliveries.
Airbus raised its dividend to a record 1.20 euros per share after a 59 percent leap in annual net profit buoyed by disposals. For 2015 it forecast higher revenue and a slight increase in core profit.
Enders said Airbus would not feel the full benefit of a recent drop in the euro until 2017 due to prolific hedging.
Airbus has taken hits of 4.75 billion euros due to delays so far to Europe's largest defence project the A400M.
"The A400M charge is at the upper end (of expectations) and seems not to exclude more," said Agency Partners analyst Nick Cunningham, but Airbus said it would turn the corner for good.
(Additional reporting by Jens Hack and James Regan; Writing by Tim Hepher; Editing by David Holmes and Elaine Hardcastle)