Will Airbus delay mean much? (A380's postponement might aid Boeing, might not)

Associated Press via the Corvallis Gazette-Times ^ | Tuesday, June 7, 2005 | ELIZABETH M. GILLESPIE

[Paleo Conservative]

SEATTLE -- In the neck-and-neck race for dominance in commercial aircraft, bad news for Airbus is usually good news for The Boeing Co.

The question is how bad and how good.

On Wednesday, when Airbus confirmed that deliveries of its new A380 superjumbo passenger jet will be two to six months late, some analysts called it a hiccup that probably won't hurt the company -- or help its U.S. rival -- that much.

Others wondered if the delay might be a sign of big underlying problems that could threaten the future of the world's largest plane.

"I think the biggest concern of all ... is that this might not be due to flight testing delays or paperwork. It might be due to a need to meet performance specifications. In other words, they might have to be looking at design aspects of this plane,'' said Richard Aboulafia, an aviation analyst with Teal Group in Fairfax, Va.

Airbus spokeswoman Mary Anne Greczyn said delays of this kind are "relatively typical'' with new airplanes.

"A couple of months in the grand scheme of things is really nothing in terms of scheduling,'' Greczyn said.

In late April, Airbus warned Singapore Airlines Ltd. it would receive its A380s late next year instead of in March. Since then, other airlines said they were expecting late deliveries, too.

Airbus has not said what's causing the delays. Australia's Qantas Airways Ltd. said "manufacturing issues'' are to blame.

If those "issues'' mean Airbus is struggling to meet the design specifications it promised airlines, the Toulouse, France-based jet manufacturer could be headed for some serious turbulence.

"It increases the chances that the A380 was oversold in terms of economics and technology, and that is a boon for Boeing and the 747,'' Aboulafia said.

Greczyn scoffed at that suggestion that Airbus might be struggling to keep its promises.

"There is no doubt that we will meet the performance specs we promised our customers,'' she said. "That's not a concern.''

Without discussing exactly what prompted the delay, Greczyn said staying on schedule depends not only on Airbus' production process, but also design requirements from each airline, and a global supply chain.

Boeing's 747, the largest commercial jet in service today, seats about 420 passengers in the standard three-class configuration or 525 in two classes. The A380 will fly 555 passengers in three classes, or a whopping 840 if everyone jams into one class.

Boeing is thinking about building a slightly larger and more fuel-efficient version of the 747. The Chicago-based company, which builds most of its commercial planes in the Seattle area, has said it will decide by the end of the summer whether to offer the 747 Advanced, which would seat about 30 more people than the existing 747.

Peter Jacobs, an analyst with Ragen MacKenzie, said he doesn't see the A380 delay having any impact on Boeing's decision about the 747 Advanced, since that plane probably wouldn't enter service until 2009.

"If there are further delays in the A380 or major problems come up with it during flight testing, it could sway the competitive landscape somewhat, but that's highly unlikely,'' Jacobs said.

In general, Jacobs said he thinks a setback like this one isn't a huge deal — or a surprise.

"When you're breaking new ground, which Airbus is with this large airplane, these kinds of things happen,'' he said.

Scott Hamilton, an aerospace consultant with Leeham Companies LLC, agreed, noting that Boeing was a bit late delivering its first 747-400s in 1989.

"Certainly for the airlines, it's a major inconvenience,'' Hamilton said. "And certainly for Airbus, they're going to have to pay penalties.''

But Hamilton said he doesn't think the delay will cost Airbus any customer loyalty.

"The airlines that have already ordered the A380 are almost certainly going to stick with the A380 unless something humongous happens to the program.''

Shares in European Aeronautic Defence and Space Co., which owns 80 percent of Airbus fell as much as 2.2 percent in early trading before recovering to close just 0.3 percent lower at 23.97 euros ($29.31). BAE Systems, which owns the remaining 20 percent of Airbus, closed 1.5 percent higher at 2.73 pounds ($4.97) in London.

Boeing shares fell 10 cents Wednesday to close at $63.80 on the New York Stock Exchange.

[Paleo Conservative]

Ping!

If you want on or off my aerospace ping list, please contact me by Freep mail not by posting to this thread.

[Seaplaner]

There is no doubt that we will meet the performance specs we promised our customers,'' she said. "That's not a concern.

Mary Anne, now this may just be a spurious reading, but my little internal lie detector just buzzed.

.

[Prophet in the wilderness]

What do you think public relations spokespeople get paid to do ? it's called " Plausible Denyability " .

[Nathan Zachary]

With the airbus being 2 billion over-budget, and less than half the orders needed just to break even, and no hope in sight to get those other half, what investors would put up their money for that risk?
As I have said before, the airbus people had better watch who they accuse of being subsidized, because it is awfully clear they are.
I wouldn't be surprised if the airbus 380 becomes a museum curiosity piece.

[river rat]

""A couple of months in the grand scheme of things is really nothing in terms of scheduling,'' Greczyn said."

Damn!

In my former business, here in Silicon Valley --it could make the difference between success or failure.
Our product life cycles were running about 9 months!

Semper Fi

[Prophet in the wilderness]

What most people don't know is ?
On a new airplane design and program, the first few planes are only for test purposes.
The first Aflop-380 is only a prototype and will probably never go into passenger or freight service.
The 2nd plane will be tested and literally broken into pieces to test the engineering limits of it's design.
At least the first 3-4 planes will be for testing.
Me thinks that what is going on behind closed doors ( away from the publics eye and the media's eyes ) is the AirRUST people and the airlines people are having very hot arguments about the so called " Performance " promises.
What is probably going on is, after the first initial " TEST FLIGHTS " and the data from them, the airlines are not happy with the performance numbers ( in spite of what we heard in the news that the A-380 is performing as expected ) and the airlines are telling AirRUST to get the numbers that they ( AirRUST ) promised.
I don't believe what we heard in the news for the reasons of the delay of another 6 months for the delivery dates on the A-380 is because of the interior suppliers are late getting up to speed on the interiors for the Aflop-380 --- what do you think the PR people are for ?
These 6 months is going to be a weight cutting diet program for the A-380 to bring down the weight of the airplane, and AirRust is wringing their hands over were to cut the weight down on the Aflop-380 without jeopardizing the airworthiness of the A-380.

[river rat]

A380- Super Jumbo...

Soon to be know as the "EUie that never Flewie"

Semper Fi

[Prophet in the wilderness]

Ohhh .. believe me.... once they ( if they ever do ) get this Aflop-380 to the point were it is profitable ( that is a BIG IF ??? ) .... by that time, the whole program will reach $ 20 BILLION in cost... and probably only have sold 200-250 airframes.
We can be assured, that the EU will drop more money into the bottomless pit of a program as the Aflop has become.
This will probably go down in history as the biggest " WHITE ELEPHANT " of a project and program in civil aviation.
It looks to me, that those potential costumers who would have bought the Aflop-380 are getting the jitters and are having 2nd thoughts about buying the Aflop-380, and the 747 Advanced will surely take away a few sales from the Aflop-380.
It looks as thought, AirRUST is not going to sell as many Aflop-380's as they thought they would.
I am looking at this whole situation as a whole , as I look at it as the EU's problem, their economies and everything, Germany's unemployment at 14 %.

[Paleo Conservative]

What most people don't know is ?
On a new airplane design and program, the first few planes are only for test purposes.

The 747 prototype -- which actually was a production aircraft -- was the only 747 not delivered to a customer. All the other 747's used in the test program were eventually refurbished and delivered to the airlines. The 777 prototype was refurbish and sold to Cathay Pacific Airways. Considering the first 777 test flights started 11 years ago, why can't Airbus build a prototype that can be deliverable as an airliner?

[investigateworld]

If you can help out a non-engineer here, can the 747 frame be tweaked out even more, or will the production line close?

[Prophet in the wilderness]

Well, the first prototype of the 747 was only used for static tests, and the 3 rd 747 was literally broken into pieces while they tested it for it's engineering limits and fatigue tests.
The first 747 was also used in other tests, as in the flying testbed platform for testing the first engine for the 777.
The first 747 prototype is loaned out to a museum now ( I wished the Smithsonian - Air&Space Museum would have gotten it).

[Prophet in the wilderness]

They ( Boeing ) is working on it.
Believe it or not, but the 747 in it's conception, was born to be stretched, and in recent years, Boeing's engineers accidentally discovered in their research that the 747 airframe design became more structurally more efficient as it got stretched.

[cpdiii]

AirRust is wringing their hands over were to cut the weight down on the Aflop-380 without jeopardizing the airworthiness of the A-380.

I hope the do not try to save weight on the structural members of the vertical stabilizer.

[Prophet in the wilderness]

You might be right about the 777 , but, at least one of the new program or new airplane design is sacrificed ( take one for the team ) is tested for fatigue and broken into pieces.
I do know, at least 2 of the 747's never went into regular service.
I do have a great book on the history of the 747 ... it's called ( The Boeing 747 - design and development since 1969 ( really, since 1966 ) by Guy Norris and Mark Wagner.

[neutrality]

The lack of bias among the aviation fans here is truly commendable

[stefan10]

Feel free to post your inside knowledge about the testing results here.

this plane is a great achievement and i don´t care who produced it i am just looking forward to see it and i will.

[Moose4]

That's the decision Boeing will be making in the next couple of months. The plans for the 747 Advanced apparently involve adding about 11-12 feet to the fuselage in two sections, fitting four of the new advanced engines being built to power the 787 Dreamliner, increased use of composites, and a number of other internal changes. If Boeing decides not to pursue the 747 Advanced, then the 747 line will shut down...they have fewer than 30 747 orders left to fill, mostly for freighters.

}:-)4

[Recon Dad]

I'm only a spectator in this fight and don't have the engineering expertise to really know how this will all end up, but from what I've read to date the Airbus is in real trouble.
Why would you build a plane so big that there are only 1 or 2 airports in the world that today can land it or off load it. The cost of making the changes to existing airports is so big you would need thousands of these planes to be coming and going through your airport to make it economically viable.
It's the reverse analogy of building a boat in your basement so big and not having a way to get it out when your done.
The Euros are hearing the sucking sound of their money going down a wide drain. They should rename it the "Spruce Goose"!

[gridlock]

I have no particular knowledge of this industry, but it strikes me that saying you are going to be six months late a year from now has more to do with design than production. If production were lagging, you would figure the could add on more men, push the workers, and make up lost time. If you have a design problem, you know now that you will not be ready in a year. The problem is, you don't really know you'll be ready in 18 months, either.