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Airbus superjumbo flies towards new delays: company sources

Posted : September 21, 2006

PARIS: European aircraft maker Airbus is likely to announce further delays to its A380 superjumbo because of production problems with cabling, company sources said.

The delivery timetable for the A380, which can carry up to 840 passengers, is already running a year behind schedule.

Various sources said that further delays were likely following remarks to this effect in a French newspaper report, recent comments by BAE Systems -- an Airbus partner in the A380 project -- as well as comment by Air France.

One source inside Airbus told AFP that "a halving of deliveries next year seems logical in view of the industrial difficulties arising from adaptation of electric cabling to the specific requirements of customers."

Another company source told AFP that management had begun to inform trades union representatives of "this trend of a new delivery delay."

The parent company of Airbus, EADS, announced in June that deliveries of the A380 would be delayed by at least a year because of production setbacks.

Airbus had said that this would mean that only nine of the aircraft, which is to become the biggest commercial airliner in the world, would be delivered next year instead of 25 as previously expected.

These revelations, coupled with a warning that EADS could suffer a two-billion-euro (2.6-billion-dollar) decline in operational earnings by 2010, caused a crisis for EADS involving management changes and a loss of credibility in financial markets.

The A380 has been sold to 16 airline companies worldwide including Singapore Airlines, Air France, Dubai-based Emirates, Malaysia Airlines and Australia's Qantas.

After news of the delays in June, Singapore Airlines expressed disappointment, Emirates said they would hurt its expansion plans and Malaysia Airlines threatened to review its purchase agreement for the jets.

Earlier Wednesday the French financial newspaper Les Echos reported that Airbus was facing further delays in the delivery of the A380 of as much as six months.

Also on Wednesday a spokeswoman for Air France said that the carrier "has been informed as have other companies" by Airbus "about a new delivery programme" for the A380 and was waiting for details.

Les Echos reported, without giving sources, that an Airbus executive committee had met on Monday to finalize the delivery schedule, which would lead to an additional six-month delay and a reduction in the number of planned deliveries next year.

The first A380 could be delivered as expected to Singapore Airlines in December, but it might not be put into service until April, according to the newspaper.

Airbus declined to comment on the report, but said new chief executive Christian Streiff would talk about his plans at the end of the month after his first 100 days at the top of the company.

Arnaud Lagardere, co-chairman of the European Aeronautic Defence and Space company, said last week that the status of delays to production of the Airbus A380 would be known by September 29.

This is the date of a meeting of parent company EADS' board of directors.

Another source inside Airbus told AFP that management had begun to inform trades union representatives about "this trend of a new delivery delay".

The chief executive of British aerospace group BAE Systems, a shareholder in Airbus for which it makes the wings, also said last week that Airbus might have to announce further production delays and seek a fresh cash injection from shareholders.

But a spokesman for EADS, which owns 80 percent of Airbus, replied to the remark by saying: "I don't know where it comes from."

There was however some good news for the beleagured planemaker on Wednesday.

Russian airline Aeroflot said it intended to buy 22 jets from the company within a decade. The order formed part of a major deal that also saw the carrier agree to buy the same number of aircraft from Airbus' arch rival Boeing.

And Germany's Lufthansa said it had ordered 35 Airbus planes to update its fleet and taken an option on 30 more.

EADS' share price rallied at the close of business on the Paris stock exchange Wednesday after a sharp fall when trading opened.

The company's closing share price was 22.8 euros, up 0.35 percent in a market that rose by 1.5 percent.


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