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Scope of Airbus' Problems Broadens

October 06, 2006|From Times Wire Services

The woes affecting European plane maker Airbus seeped beyond its troubled A380 super-jumbo jet Thursday as questions surfaced about two other aircraft programs and the company acknowledged that it had fallen 10 years behind rival Boeing Co. in efficiency.

Airbus parent European Aeronautic Defense & Space Co. raised the specter for the first time that the delays and profit warnings surrounding the A380 program could affect the mid-size A350, an aircraft Airbus sees as fundamental to its future.

Airbus also said the A400M turboprop military transport it is building for seven NATO members faced the risk of future delays and would not make money unless costs were cut.

Shares in EADS fell as much as 3.7%.

"The timetable is exactly on the edge.... We are exactly on track but without any reserves" of time, Airbus Chief Executive Christian Streiff told the Financial Times, referring to the A400M.

Analysts say Airbus is straining its resources as it attempts to develop and begin production of the three aircraft.

EADS said it would not automatically allow Airbus to launch its A350 program until it could be demonstrated that the financial and development resources were available and that it had brought the industrial processes blamed for the A380 delay under control.

"There is a decision to be made, but first we have to do our homework," EADS spokesman Michael Hauger said.

Streiff said Airbus must produce the A350 even if it were to take to the skies three or four years behind Boeing's rival 787 Dreamliner.

"The A350 is fundamental for us. It is up to the EADS board to decide," he told Le Monde of Paris newspaper in an interview, adding that such mid-size jetliners represented 40% of global demand by value.

"We will need 10 years to return to the same level as Boeing in terms of development and efficiency. Their production benefits from a weak dollar," he told Le Monde.

Boeing said Thursday that it delivered 100 commercial airplanes in the third quarter, the first time it had reached the century mark since 2002.

The total, up from 62 in the same period a year earlier, leaves the world's No. 2 maker of commercial planes behind Airbus needing a repeat performance of 100 deliveries in the fourth quarter to meet its full-year forecast of 395.

The last time Boeing delivered more planes in a three-month period was the second quarter of 2002, when the total of 112 reflected orders placed before the industry slowdown caused by the Sept. 11, 2001, terrorist attacks.

Third-quarter deliveries consisted of 81 737s, 13 777s, three 747s and three 767s.

Shares of Boeing slipped 34 cents Thursday to $83.62.

Reuters and the Associated Press were used in compiling this report.

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