Fresh delays in delivery for Airbus’ two new aircraft

May 28 2008 by David Jones, Liverpool Daily Post

AIRBUS faces “risks” in the development and stepped-up production of two new aircraft, including the A380 superjumbo, the wings for which are made near Chester, says a company boss.

Louis Gallois, chief executive of Airbus parent group EADS, said both the A380 and the A400M military transport aircraft programmes still faced problems.

He said: “Although we have made significant progress on the development and ramp-up of A380 and A400M, there are still significant levels of execution risk.

“And the environment is characterised by the weaker and weaker dollar, increasing oil prices and tightened access to credit for airlines.”

He did not give further details, except to suggest that delivery of the double-decker A380 – Europe’s biggest industrial project – could face further delays of between three and five months. The A400M is running six to 12 months late.

Earlier this month, the European aircraft maker announced further delivery delays for its flagship A380 superjumbo. It said it would be able to deliver 12 of the double-decker 380s this year, instead of the 13 previously announced.

Next year, it will build 21 of the jets instead of the 25 it had hoped to deliver. Deliveries for 2010 are still being discussed with airlines.

Airbus was already almost two years late delivering the world's biggest passenger plane to launch customer Singapore Airlines last autumn.

The A380 has proved a huge hit with Singapore Airlines’ routes from Singapore to Sydney, Australia, London Heathrow, and, from last week, Tokyo.

But, because of production problems in France and Germany, Airbus has struggled to get the A380 into serial production and additional delays in delivering more of the jets to airlines could trigger demands for compensation.

Workers at the Airbus plant at Broughton, near Chester, have been successfully ramping up production of A380 wings ready for shipping to Toulouse, in France, for final assembly of the aircraft.

Mr Gallois added that he expects the pace of new Airbus orders generally to slow as airlines struggle to cope with rising fuel costs, a slowing global economy and tougher access to credit.

EADS will continue to shift production out of Europe to protect the company from the effects of the rising euro, which cuts into profits, he said.

By 2020, EADS should source around 40% of its costs and have 20% of its employees outside Europe, said Mr Gallois, who is trying to steer EADS out of loss by boosting restructuring and switching production out of the high-cost euro zone.

Airbus chief executive Tom Enders is calling for a level playing field in terms of state aid compared to US rival Boeing ahead of a meeting of ministers from the Airbus partner countries.

Speaking at the ILA Berlin Air Show, he cited US subsidies for the development of Boeing’s 787 Dreamliner – a rival to Airbus’s new A350 XWB jet – as well as strong support for the 787 programme in Japan.

Mr Gallois, too, has called for more European government funding to help the aerospace indus- try, even though complaints by the US and Europe about one other’s “subsidis- ed” aviation industries are still being considered by the World Trade Organisation in Geneva.

davidrjones