- The Washington Times - Friday, July 14, 2006

LONDON (AP) — The Farnborough International Airshow, one of the major trade events on the aviation industry calendar, could hardly come at a worse time for European plane maker Airbus.

Still reeling from the furor over delays to its flagship A380 superjumbo that led to the departure of top executives and considering a costly redesign of its midsized A350, Airbus will be seeking to reassure investors at next week’s expo that it is on the road to recovery.

And it will have to do so in the shadow of U.S. rival Boeing Co., which is expected to announce bumper new plane orders.

“Airbus has a lot to prove,” said Jon Kutler of research firm Admiralty Partners. “They are not going to win the orders battle at Farnborough, and they should focus the debate on strategy, management and implementation.”

More than 300,000 people were to attend the biennial show beginning Monday where almost 1,500 exhibitors from 35 countries will show off the latest in aviation technology, including flight simulators and surveillance aircraft.

But most eyes will be on the next moves from both Toulouse, France-based Airbus and Chicago-based Boeing.

Airbus has been caught in a storm of bad publicity since it revealed in July that it had run into manufacturing problems with its A380 jet, which would delay deliveries of the world’s largest passenger aircraft, which is due to enter service in 2007.

The announcement sent shares in parent company European Aeronautic Defense and Space Co. (EADS) spiraling downward and led to the departure of Airbus Chief Executive Gustav Humbert and EADS co-CEO Noel Forgeard.

The 555-seat A380 — last seen here arriving as a test flight to Heathrow Airport to applause from Mr. Forgeard, British Treasury chief, Gordon Brown, and investors — will again be in the camera sights during the daily flying displays, but the airline’s executives are likely to face a tougher crowd indoors.

“They’ve lost a lot of ground in the industry and in terms of PR and I think they need to go out with their new management and use Farnborough as an opportunity,” said Mr. Kutler.

Airbus reported this week that its sales fell by more than half in the first six months of the year to 117 planes, compared to Boeing’s 480 orders for the same period.

Some analysts expect new Airbus CEO Christian Streiff to strike back by revealing plans for an all-new midsized plane, replacing its problematic A350 design, to challenge Boeing’s 787 Dreamliner.

Boeing has won 69 orders so far this year for its 787, the long-range, fuel-efficient widebody jet due to enter service in 2008 — taking the total of firm orders for the plane to 360.

In contrast, Airbus took just 13 new first-half orders for the A350, taking its total to 100.

The weak reception from buyers has prompted Airbus to take the plane back to the drawing board to make it bigger and more fuel efficient, and Mr. Streiff is expected to announce changes that could drastically increase its $5.8 billion development cost and push back its entry into service from 2010 to 2012 or later.

“It looks increasingly likely to us that Airbus will scrap plans for the A350 aircraft and launch a brand new A370,” Credit Suisse analysts wrote in a research report this week.

Boeing, meanwhile, seems likely to be the front-runner in the biennial Farnborough race for orders — both airlines usually store up announcements for maximum exposure at the show — after losing the contest to Airbus in recent years.

Some analysts think that Boeing could trump any announcement from Airbus on a new version of the A350 by announcing a bigger, 310-seat, version of the 787.

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