Posted on 06/06/2005 10:41:11 PM PDT by 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.
The 9 is nice and lots of them flying still. I love the Constellation, never got to fly in it, but toured one once, a thing of beauty.
The L1011 was well built, TWA used to have quite a few, and Delta just retired theirs in the last year, there is a startup airline in Thailand that is flying them. My only beef with the L1011 was the hydraulic smell before takeoff, after that, no problem.
The DC-10 is good, did a few flights on Continental and Hawaiian, never had any trouble, the MD11 had some problems, lots of them are now flying cargo.
Wasn't the Lockheed Constellation that Howard Hughes bought a huge bulk of for TWA ?
Yep, TWA got first cut at them, I have a pic of one on my page, its the long range Super G version with the tip tanks, beautiful.
Of course they do, but that's not the point. AB is going to claim, if they haven't already, that Boeing's dealings with NASA and the like have given B technology benefits that they have flowed down to commercial aircraft to the detriment of Airbus and causing them to lose sales. Well, given AB's cocky attitude the last few years and the fact they overtaken B in both orders and deliveries for 2 years running, it won't take much more than a first year law student to slice and dice THAT argument. We'll see how it turns out.
Sorry about the spelling mistakes......
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