A380 a White Elephant?

EADS says A380 jet to be delayed a year

By LAURENCE FROST, AP Business Writer

PARIS - Airbus parent EADS said Tuesday that the flagship A380
superjumbo jet will be delayed for another year and Virgin Atlantic and
Emirates — the plane's biggest customer — hinted that the new
setbacks could lead to order cancelations.

In a statement issued after its second board meeting in four days, EADS
said the latest delays will cut an extra 2.8 billion euros ($3.6
billion) off operating profit and announced a restructuring plan to cut
costs and boost productivity at Airbus.

Airbus sees "no significant signs" that cancelations are likely from any
of its A380 customers, CEO Christian Streiff said during a conference
call with reporters and analysts.

"Until now, everybody's still on board."
But Dubai-based Emirates signaled that its bumper 45-plane order, worth
over $13 billion at list prices, could be in doubt after suffering a
further delay of 10 months.

"This is a very serious issue for Emirates and the company is now
reviewing all its options," Chief Executive Tim Clark said in an
e-mailed statement.

Virgin Atlantic Airways Ltd. spokesman Paul Charles said the carrier
will be reviewing its six-plane order at an Oct. 12 board meeting, with
"all options" on the table. "The depths of the delays have serious
implications," he said.

But Air France and Lufthansa said they were still committed to the plane
despite a new one-year delay to their deliveries.

While Air France "can only regret" the latest delays, the airline said
in a statement, they will have no impact on its growth strategy.

"We're still convinced that the A380 is a success story and the A380 is
a growth aircraft," Lufthansa spokeswoman Stefanie Stotz said.

Airbus CEO Streiff reiterated Tuesday that the latest production holdups
— which leave the program two years behind its original schedule —
were caused entirely by problems with the installation of the 300 miles
of wiring aboard each plane. "This is the only weak link in the
production chain," Streiff said.

Emirates, which had originally been scheduled to take delivery of an
A380 this month, will receive the first plane 22 months late.
Lufthansa now expects to get its first A380 between May and September
2009, and Air France said its first delivery has been pushed back to the
second quarter of 2009.

Airbus has been discussing the latest holdups with airlines in recent
days as it tries to gauge the likely compensation bill. EADS had
confirmed last month that the plane would be delayed a third time,
without giving details.

EADS shares had plunged 26 percent on June 14 after Airbus announced a
second delay of six months to the 555-seater A380 and a 2 billion euro
($2.6 billion) profit warning.

Tuesday's announcement takes the total financial impact of program
delays to 4.8 billion euros ($6.1 billion) over four years.

The world's largest passenger jet has so far won 134 orders from 14
airlines and leasing companies and a further 25 for its freighter
version.

The June revelations led to the sacking of Airbus boss Gustav Humbert
and EADS co-CEO Noel Forgeard — who remains under investigation by
market authorities after it emerged that he exercised stock options to
make a profit of 2.5 million euros ($3.2 million) just weeks before
ordering an internal probe into the production problems.

Airbus said Tuesday that A380 launch customer Singapore Airlines will
receive its first jet in October next year — the only delivery
promised for 2007. Until recently, Airbus had maintained that the first
superjumbo would be delivered to launch customer Singapore Airlines by
December this year, on schedule.
In June, Airbus had already slashed its delivery targets to nine planes
from 25 in 2007; to 28 from 35 in 2008; and to 40 from 45 in 2009. EADS
further reduced those forecasts Tuesday, pledging 13 deliveries in 2008
and 25 in 2009.

The defense group confirmed that it now expects to make a loss on some
of the Airbus A380 sales contracts, warning of a 600 million euros ($760
million) charge this year to cover those losses. The A380 program will
not generate positive operating earnings until 2010, EADS predicted.

The ripple effect of the fresh A380 delay is likely to hurt the group's
industrial shareholders and to benefit U.S. rival Boeing Co., which is
developing a 400- to 500-seat version of its 747 jumbo to compete with
the A380.

German automaker DaimlerChrysler AG — which owns 22.5 percent of EADS
— said it will review its own operating profit guidance as a result of
the Airbus problems. Shares of Boeing rose $1.81, or 2.3 percent, to
close at $81.78 on the New York Stock Exchange.

EADS also announced the launch of a new cost-cutting program to counter
the impact of A380 delays as well as the weaker dollar and growing
competition from Boeing. EADS gave few details of the plan but said it
aims to generate annual cost savings of 2 billion euros ($2.6 billion)
from 2010.

Management oversight of Airbus is also being tightened up at EADS —
expected soon to buy the 20 percent of the aircraft maker that it does
not already own from Britain's BAE Systems PLC. BAE shareholders vote
Wednesday on a management recommendation to go ahead with the 2.75
billion euro ($3.5 billion) sale.
Shares in European Aeronautic Defence and Space Co., which had fallen
recently in anticipation of the A380 delays, closed 1.1 percent higher
at 22.65 euros ($28.85) in Paris before the company's statement, but
after those issued by Emirates and Lufthansa.

Auzerais . wrote:
EADS says A380 jet to be delayed a year

By LAURENCE FROST, AP Business Writer

PARIS - Airbus parent EADS said Tuesday that the flagship A380
superjumbo jet will be delayed for another year and Virgin Atlantic and
Emirates - the plane's biggest customer - hinted that the new
setbacks could lead to order cancelations.

If Emirates backs out then EADS is in real trouble. They are roughly
1/4 of all A380 orders.

I can't help but think we're being lied to about the problems. It
doesn't take a couple of years to sort out wiring problems.

Suspicions I've heard tossed around a

Fuel efficiency is nothing near what was promised.

Political issues within Germany and France regarding construction.

Threatened additional charges at airports because of
the size of the plane
number of passengers
delays in take-offs by other aircraft caused by A380 turbulence

I wonder if we'll ever get the true story.

Bottom line, what we are seeing is the typical problem when politicians
cross out of their own areas and get involved in business or science.
If Airbus was private instead of controlled by government agencies we
wouldn't be seeing this.

Tchiowa wrote:y.

Bottom line, what we are seeing is the typical problem when politicians
cross out of their own areas and get involved in business or science.
If Airbus was private instead of controlled by government agencies we
wouldn't be seeing this.

If it were private, it would have never been built.

mrtravel wrote:
Tchiowa wrote:y.

Bottom line, what we are seeing is the typical problem when politicians
cross out of their own areas and get involved in business or science.
If Airbus was private instead of controlled by government agencies we
wouldn't be seeing this.

If it were private, it would have never been built.

And maybe it shouldn't have been. But Boeing built the 747. If there is
a need then private industry will find a way to fill it.

Tchiowa wrote:
If Emirates backs out then EADS is in real trouble. They are roughly
1/4 of all A380 orders.
I can't help but think we're being lied to about the problems. It
doesn't take a couple of years to sort out wiring problems.

I hope the airlines were not banking all their plans on the A380. It
seems crazy to put all your eggs on a future unproven product.

Bucky wrote:

I hope the airlines were not banking all their plans on the A380. It
seems crazy to put all your eggs on a future unproven product.

True - but then all it is is a big jet aircraft, the technology for
which is fairly proven, including the bloody huge 6-engined, split tail
cargo thing that went over my head at Stockport last weekend, dwarfing
the 747 that passed previously. Why *should* it have so many problems?

Neil

mrtravel schrieb:
Tchiowa wrote:y.

Bottom line, what we are seeing is the typical problem when politicians
cross out of their own areas and get involved in business or science.
If Airbus was private instead of controlled by government agencies we
wouldn't be seeing this.

If it were private, it would have never been built.

Sorry to have to tell you guys, but EADS, the company that builds the
Airbus, is a public limited liability company.
http://www.reports.eads.net/eads/ar_...r.php?id=c_1_3


T.

mrtravel writes:

If it were private, it would have never been built.

Why not?

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Tom Peel writes:

Sorry to have to tell you guys, but EADS, the company that builds the
Airbus, is a public limited liability company.

Yeah, and Amtrak and NASA are fully autonomous.

Most large companies in Europe are in bed with one or more European
governments, to a much greater extent than in the US.

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Neil Williams writes:

True - but then all it is is a big jet aircraft, the technology for
which is fairly proven, including the bloody huge 6-engined, split tail
cargo thing that went over my head at Stockport last weekend, dwarfing
the 747 that passed previously. Why *should* it have so many problems?

Too many cooks spoil the broth--especially when most of them aren't
cooks to begin with.

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