Posted on 06/14/2006 7:54:14 AM PDT by COEXERJ145
PARIS - Shares of Airbus' parent company plummeted Wednesday after new delays in the delivery of the A380 superjumbo raised questions about the company's management and strategy.
The selloff came after Emirates Airlines said it is reconsidering its order of the double-decker A380, the world's largest passenger aircraft — exacerbating an already delicate situation for European Aeronautic Defense & Space Co. and its largest subsidiary.
Singapore Airlines and Qantas Airways, which also have large A380 orders, said they are seeking talks with Airbus and want compensation. Malaysia Airlines also was reviewing the terms of its agreement with Airbus to buy six A380s.
Singapore Airlines also delivered a second blow to Airbus by annoucing it will buy 20 Boeing 787-9 aircraft for $4.52 billion and take options on another 20 planes. Airbus had hoped the Asian airline would be one of the first and biggest customers for another new model, the A350, that would compete directly with Boeing's 787. But airline and leasing company dissatisfaction with the design of the A350 has led Airbus to consider a costly redesign of the plane, delaying its launch for several years.
(Excerpt) Read more at news.yahoo.com ...
But the 747-100 was still able to be certified and fly in revenue service with the PW JT-9 engines even before all the issues with that engine had been resolved.
Those improvements sure killed the 747SP. Did anyone ever put CF6-80's on a 747SP? What kind of range would it have?
Boeing knows what the problem is, knows how to fix it and has the time to do it.
Please explain.
Wrong. Boeing is pretty much in fact on schedule. The Airbus's wings snapped prematurely after they had the whole thing built, short of the 1.5 over-stress.
By the end of 2009 AirBus, they'll still be about 8 months behind their production schedule. Huge cash-flow effect. Disgruntled key customers. The stuff hit the fan from Malaysian Airline System, Qantas Airways, Singapore Airlines and Emirates last September, when all four sought economic damages from Airbus. Wonder what'll hit the fan this time?
Also, Airbus had to add structural reinforcement (weight) to the wings to strengthen them after the wing-snapping test failed earlier than they had predicted. That extra weight adversely impacts payload/range/seat-cost-per-mile. Here's another similar article:
EADS to delay A380 over production woes
International Herald Tribune 06/13/2006
(Copyright 2006)European Aeronautic, Defense & Space, the parent company of Airbus, said Tuesday that it was pushing back its delivery schedule for its new superjumbo A380s by six to seven months, blaming production-line bottlenecks for the delays. Airbus, Boeing's main competitor, said that it still expected to deliver the first A380 by the end of this year, but would be able to deliver only nine of the new airplanes next year. The late deliveries will reduce operating profit by €500 million, or $628 million, a year from 2007 to 2010, the company said. It was the second six-month delay in production that Airbus has announced in the year since the plane made its maiden test flight.
"The new delays are caused by industrial issues only," the European aircraft maker said in a statement, citing bottlenecks with the plane's electrical systems. "Modifications of electrical systems and reworks have been necessary," which are "progressively disturbing the final assembly flow," it said. John Leahy, Airbus chief commercial officer, told Reuters that the company was still on track to have the plane certified and to deliver its first aircraft to Singapore Airlines by end- 2006, but deliveries in 2007 would be cut to nine aircraft from an original target of 20 to 25. Airbus said there would also be shortfalls of between five and nine planes in 2008 and of around five in 2009. It declined to identify which airlines may be affected.
Airbus shut the assembly line for the A380, the world's largest passenger plane, from May until August last year to configure jet wiring and electronics, prompting it to put off deliveries to Singapore Airlines, and subsequent deliveries to Emirates airline and Sydney-based Qantas.
EADS's operating profit, or earnings before interest, taxes and one-time items, will be reduced by a shift in profit margin to later years, penalties for late delivery to customers and costs related to reorganizing production. A review by Airbus "concluded that further actions are required to secure a ramp-up recovery in 2008 and 2009," the aircraft maker said. It said cash shortfalls would rise from less than 300 million euros in 2006 to more than 1 billion euros by 2008, decreasing sharply thereafter. It said, however, that it would look for "sources of compensation" across the group to try and offset the impact.
Yes, that is what I heard as well. The other tests were fine. The results on the one test were anticipated. No surprise to anyone.
Well said.
I do know a few 747SP's were fitted with Rolls-Royce RB.211-524 engines and they had a range approaching 7,000 nautical miles. But what really killed the 747SP was the development (through a project for Japan Airlines) a modified 747-200B with extra fuel tanks and GE CF6-50 engines that could fly between Tokyo and New York City non-stop year-round. Indeed, the current record for the fastest JFK Airport to Narita Airport transit was done by a JAL 747-200B.
Now that's irony. Didn't Airbus get its competitive advantage by using technology to eliminate one of the flight crew?
At least, that's how I remember a case study from b-school.
(And case studies aren't necessarily the real stories...)
"The late deliveries will reduce operating profit by €500 million, or $628 million, a year from 2007 to 2010, the company said."
But who has to care about budgets and stockholders when a big % of your companies operating expenses is covered by socialist subsidies and sweetheart loans from the EU?
If Airbust had to use their own money for R&D and sell their planes for *gasp!!!* a profit, they would be out of business tomorrow.
Bump! Totally agreed. Now trying to get the administration to actually do something about it...waiting about five years to even consider bringing the case into the WTO...[where coincidentally the EU outguns us what, 13 to one?]
Who is "they"?
Have a comment about Post 21?
Answered close enough in post 28.
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