- The Washington Times - Tuesday, October 3, 2006

PARIS (AP) — Airbus parent EADS said yesterday that the flagship A380 superjumbo jet will be delayed for another year and Virgin Atlantic Airways Ltd. and Dubai-based Emirates — the plane’s biggest customer — hinted that the new setbacks could lead to order cancellations.

In a statement issued after its second board meeting in four days, EADS said the latest delays will cut an extra $3.6 billion off operating profit and announced a restructuring plan to cut costs and boost productivity at Airbus.

Airbus sees “no significant signs” that cancellations are likely from any of its A380 customers, Chief Executive Officer Christian Streiff said during a conference call with reporters and analysts. “Until now, everybody’s still on board.”

But Emirates signaled that its 45-plane order, worth more than $13 billion at list prices, could be in doubt after enduring a further delay of 10 months.

“This is a very serious issue for Emirates, and the company is now reviewing all its options,” Chief Executive Officer Tim Clark said.

Virgin Atlantic Airways spokesman Paul Charles said the carrier will be reviewing its six-plane order at an Oct. 12 board meeting, with “all options” on the table. “The depths of the delays have serious implications.”

But Air France and Lufthansa said they are still committed to the plane despite a new one-year delay to their deliveries.

While Air France “can only regret” the latest delays, the airline said, the delays will have no effect on its growth strategy.

“We’re still convinced that the A380 is a success story and the A380 is a growth aircraft,” Lufthansa spokeswoman Stefanie Stotz said.

Airbus CEO Mr. Streiff reiterated yesterday that the latest production holdups — which leave the program two years behind its original schedule — were caused entirely by problems with the installation of the 300 miles of wiring aboard each plane.

“This is the only weak link in the production chain,” Mr. Streiff said.

Emirates, which had originally been scheduled to take delivery of an A380 this month, will receive the first plane 22 months late. Lufthansa now expects to get its first A380 between May and September 2009, and Air France said its first delivery has been pushed back to the second quarter of 2009.

Airbus has been discussing the latest delays with airlines in recent days as it tries to gauge the likely compensation bill. EADS had confirmed last month that the plane would be delayed a third time, without giving details.

Yesterday’s announcement takes the total financial effect of program delays to $6.1 billion over four years. The 555-seat passenger jet has thus far won 134 orders from 14 airlines and leasing companies and an additional 25 for its freighter version.

Airbus said yesterday that A380 customer Singapore Airlines will receive its first jet next October — the only delivery promised for 2007. Until recently, Airbus had maintained that the first superjumbo would be delivered to Singapore Airlines by December this year, on schedule.

In June, Airbus already had slashed its delivery targets to nine planes from 25 in 2007; to 28 from 35 in 2008; and to 40 from 45 in 2009. EADS further reduced those forecasts yesterday, pledging 13 deliveries in 2008 and 25 in 2009.

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