Airbus warns Airlines to Expect More Delays in Del

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Airbus warns Airlines to Expect More Delays in Delivery of A380 Superjumbos
Tuesday, May 06, 2008

Franco-German aircraft maker Airbus has warned its clients of more possible delays in deliveries of its A380 superjumbo, Wirtschafts-Wochen reported.

The company will "nearly" manage to deliver 13 of the aircraft this year as planned, the German magazine cited unnamed insiders as saying, but it is unlikely it will manage the 25 planes scheduled for delivery during 2009.

It is also highly questionable whether Airbus will achieve its target of producing four planes per month.

A spokeswoman for Airbus contacted by AFP declined to comment, reiterating that the company's CEO Thomas Anders was currently conducting a review of the A380 programme.

Airbus, a unit of EADS, delivered the first A380 to Singapore Airlines last October -- 18 months late -- due to production problems.

Seventeen airlines have so far ordered or committed to ordering 193 A380s, the world's largest passenger airline.
The A380 has been beset by huge delays and cost overruns running into billions of euros (dollars), helping to drag EADS into the red and prompting a management shake-up and a major restructuring programme.

Reasons for the delay include quality issues with components produced by suppliers as well as demands by airlines for the jet's individual interior design, which makes production more complex, it said.
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Airbus In New A380 Review, Delays Feared

Delays in the recovery program for the Airbus A380 and their possible impact on slowing future deliveries has once again shaken investor confidence in parent company EADS.

Airbus recently completed a major milestone in its A380 recovery program, "power-on" for MSN26. That is the first aircraft to feature an entirely new wiring configuration designed to address assembly problems that were largely responsible for a two-year delay in A380 deliveries. But the event comes about four months later than the recovery plan called for and has some company officials worried about their ability to deliver on the commitment of handing over 13 aircraft this year. One aircraft is at risk of slipping into 2009.

However, the German business magazine Wirthschaftswoche reports that Airbus has been signaling to customers that the promise to deliver 25 A380s in 2009 will not be met, and that the goal of reaching a four-aircraft-per-month assembly rate in 2010 also is not achievable. The report knocked more than 3.5% off EADS share price.

Airbus officials would not confirm the delays. However, they acknowledge that CEO Tom Enders has begun a deep program review of the A380 as the program transitions from its original assembly set-up to "full industrialization."

Up to now, Airbus has been installing the A380s wiring after sections were assembled because of the earlier program problems. Now, with MSN26, that wiring is being done ahead of fuselage assembly as part of the regular production flow.

Since taking over at Airbus last year, CEO Tom Enders has been saying the A380 recovery program was a challenge, particularly ramping up production at the forecast rate.

For EADS, the potential A380 set-back is only the latest in a series of headaches associated with Airbus. The company is still in the process of figuring out what further cost savings measures it can generate to offset the fall in the U.S. dollar against the euro, which is undermining Airbus's competitiveness. The currency problems and tightness in credit markets also have hobbled EADS efforts to unload some of its Airbus-related production sites, another key element of the so-called Power 8 financial recovery program for the aircraft maker.

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