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Super-Jumbo Jetliner's Deliveries Again Delayed

Emirates, the biggest airline buyer of the A380, says the future of its order is uncertain.

September 22, 2006|From the Associated Press

PARIS — The parent company of Airbus announced fresh delays Thursday to its flagship A380 jet, and Emirates, the biggest airline buyer of the super-jumbo, said its 45-plane order was now "up in the air."

European Aeronautic Defense & Space Co., which owns 80% of Airbus, said in a statement that it expected deliveries of the 555-seat passenger plane to fall even further behind schedule than the one-year delay previously announced.

EADS gave no timetable or cost estimate for the new delivery setback. The defense group's shares fell 2.4% in Paris.

A380 customers are still awaiting a revised delivery schedule, according to several of the 14 airlines and leasing companies that have placed 134 orders for the world's biggest passenger jet. Airbus has taken an additional 25 orders for the super-jumbo's freighter version.

But in a worrying sign for the Toulouse, France-based plane maker, its biggest super-jumbo customer said the future of its order could be in doubt.

Asked whether Emirates might cancel its order, worth more than $13 billion at list prices, spokeswoman Valerie Tan said: "Things are up in the air right now. It's hard for us to say."

Virgin Atlantic Airways Ltd. also said the fresh setback could affect its order for six A380s, with a catalog value of $1.75 billion.

"You would expect another delay like this to have an impact on our A380 program, and we will now wait to hear from Airbus on their delivery plans," airline spokeswoman Anna Knowles said.

In a later statement, Emirates President Tim Clark said the airline "has taken no position with regard to cancellation" or a possible compensation claim.

"Emirates is concerned primarily with establishing exactly when the aircraft will be delivered," Clark said. "There is no point in any further speculation."

Emirates has reserved 43 of the super-jumbos from Airbus and two more through a leasing company -- orders that Airbus would not necessarily lose if Emirates withdrew.

EADS, which is carrying out an audit of A380 manufacturing at Airbus, said Thursday that it had encountered "continuing industrialization challenges with the wiring of production aircraft" that are expected to lead to unspecified further delays.

Airbus also blamed wiring problems when it announced a second six-month delay in the A380 program in June, causing EADS shares to plummet more than 25% in one day and triggering a management crisis that led to the ouster of EADS co-Chief Executive Noel Forgeard and Airbus CEO Gustav Humbert, who was replaced by Christian Streiff.

Streiff has imposed a temporary hiring freeze at Airbus and is scheduled to report to shareholders next month on the full extent of the A380 problems.

The European jet maker maintains that it is still on track to deliver the first A380 to its launch customer, Singapore Airlines Ltd., by the end of the year. But the carrier suggested Wednesday that the timetable could still slip.

"Airbus can only confirm the date after they have completed their technical review at the end of September," airline spokesman Stephen Forshaw said.

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