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Airbus Jet May Be Delayed Again

September 14, 2006|From Bloomberg News

Airbus may delay its A380 super-jumbo jetliner longer than initially forecast, the chief executive of BAE Systems, owner of 20% of the world's biggest plane maker, said Wednesday.

"I would be surprised if there were not more delays," Mike Turner said at a news conference in London after BAE announced that earnings had increased 28%. Turner is trying to sell the company's Airbus stake.

European Aeronautic Defense & Space Co., which owns the rest of Airbus, said in June that A380 delivery delays would cut operating profit by 2 billion euros ($2.5 billion) from 2007 to 2010.

"It's conceivable that there may be additional delays, but my view is they're likely to be marginal within the timeframe that has already been announced," said Will Mackie, an analyst at MainFirst Bank in London who has a "neutral" rating on EADS shares.

Asked for a reaction to Turner's comment, EADS spokesman Michael Hauger said, "I don't know where he would know that from, because the audit of the A380 is still underway, and as long as that's ongoing, we have no result."

BAE knew of significant delays on the A380s 15 months before they were announced but didn't know then about the size of the cost overruns, Turner said. Airbus said June 13 that the complexity of customizing the wiring installations on the planes for each customer of the 555-seat plane would result in later deliveries than originally planned as well as cost overruns.

Airbus has won orders for 159 A380s from 16 customers, excluding an additional order promised by Singapore Airlines.

Singapore Airlines has 10 A380s on order, with the first delivery scheduled for December, nine months late. The delivery schedule on the remaining order has not been reset.

Singapore Airlines has said it will seek compensation for the delays.

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