"Big Airbus A380 Delays Expected"

Tuesday, October 3, 2006

Big Airbus A380 Delays Expected
By Laurence Frost
The Associated Press


Lufthansa and Emirates said Tuesday that their orders for A380 superjumbos
will be delayed by up to a further year, and Airbus parent EADS was expected
to reveal the full extent of production problems holding back its flagship
jet program.

"We have received information from Airbus that we're going to receive the
first A380 in summer 2009," said Lufthansa spokeswoman Stefanie Stotz.
"That's one year later than anticipated up to now."

EADS declined to confirm or deny that its board was scheduled to discuss a
restructuring plan for Airbus and a new delivery timetable for its troubled
A380, which was already about a year behind schedule when the latest
production problems were disclosed.

Dubai-based Emirates also said Tuesday it had received notice that its A380s
will be delayed by 10 more months.

"Emirates has been advised by Airbus of a further 10 month delay to its A380
program, which means that our first aircraft will now arrive in August
2008," Emirates CEO Tim Clark said in a statement.

The new setback is a "very serious issue for Emirates," Clark said, adding
that the airline is now reviewing all its options.

The first delivery to Emirates - originally scheduled this month - will now
be almost two years late. Stotz said Lufthansa now expects delivery between
May and September 2009, a similar delay compared with the original delivery
target of late 2007.

But Lufthansa appeared to rule out order cancelations.

"We're still convinced that the A380 is a success story and the A380 is a
growth aircraft," Stotz said. "As we want to grow, we still believe this is
the aircraft we need, especially when capacities and traffic rights are
limited."

In recent days, Airbus has been informing A380 customers of the latest
setbacks as it tries to gauge the likely compensation bill. EADS had
confirmed last month that the plane would be delayed, without giving
details.

The announcement had already prompted Emirates to warn on Sept. 21 that its
45-plane order, worth about $13 billion at list prices, was "up in the air."
Virgin Atlantic Airways Ltd. also said the delay could affect its order for
six superjumbos.

Virgin Atlantic reiterated Tuesday that it had received tentative
information from Airbus on the new delays, but declined to give details.

French financial daily La Tribune reported that EADS also plans to announce
drastic production changes that would see the closure of A380 cabin-fitting,
paint shop and delivery centers in Hamburg, Germany, and the transfer of
their workloads to Airbus headquarters in Toulouse, France - saving on
transportation time and costs.

In return, Germany's share of the production of the A320 single-aisle jet
family would be increased, according to the unsourced report. It also said
Airbus will deliver fewer than four A380s in 2007.

In a statement June 13, the plane maker had already slashed the number of
scheduled deliveries in 2007 to nine from 25 as it announced the 555-seater
A380's second six-month delay and a 2 billion euro ($2.5 billion) profit
warning. EADS shares plunged 26 percent the next day.

The crisis 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 $3.2 million
just weeks before ordering an internal probe into the delays.

EADS is tightening its control over Airbus and is expected to buy BAE
Systems PLC's 20 percent stake in the plane maker. BAE shareholders vote
Wednesday on a management recommendation to go ahead with the $3.5 billion
sale.

EADS shares, which had fallen recently in anticipation of big new delays,
were 0.5 percent higher at 22.51 euros ($28.55) in Paris trading.

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