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A380 delay sparks airlines' ire A380 delay sparks airlines' anger
(about 2 hours later)
Leading airlines are assessing their positions following confirmation of further delays to the Airbus A380.Leading airlines are assessing their positions following confirmation of further delays to the Airbus A380.
Emirates, Virgin Atlantic, Singapore Airlines and Qantas - all due to buy the super-jumbo - have expressed disappointment at the fresh setback.Emirates, Virgin Atlantic, Singapore Airlines and Qantas - all due to buy the super-jumbo - have expressed disappointment at the fresh setback.
The first A380 delivery has been pushed back to October 2007 but Airbus says all its customers are "still on board".The first A380 delivery has been pushed back to October 2007 but Airbus says all its customers are "still on board".
Meanwhile BAE Systems won shareholders' backing to sell its Airbus stake back to the planemaker's parent firm EADS.Meanwhile BAE Systems won shareholders' backing to sell its Airbus stake back to the planemaker's parent firm EADS.
Bailing outBailing out
BAE revealed last month that it planned to dispose of its 20% minority stake in Airbus for £1.9bn (2.7bn euros).BAE revealed last month that it planned to dispose of its 20% minority stake in Airbus for £1.9bn (2.7bn euros).
At the time, it said it believed that problems with the A380 meant that Airbus was facing a "challenging" short-term future.At the time, it said it believed that problems with the A380 meant that Airbus was facing a "challenging" short-term future.
Everybody is still on board Christian Streiff, Airbus chief executive Q&A: Airbus woes Tense time for Welsh workersEverybody is still on board Christian Streiff, Airbus chief executive Q&A: Airbus woes Tense time for Welsh workers
Shares of parent group EADS were down 7% in early afternoon trade in Paris, despite experts saying it was unlikely airlines would cancel any orders.Shares of parent group EADS were down 7% in early afternoon trade in Paris, despite experts saying it was unlikely airlines would cancel any orders.
However, they said the delays would mean Airbus having to pay out huge compensation and provide a further opening for rival Boeing. However, they said the delays - the latest of which were announced on Tuesday - would mean Airbus having to pay out huge compensation and provide a further opening for rival Boeing.
EADS, which owns 80% of Airbus, said the delay would wipe an extra 2.8bn euros ($3.6bn; £1.9bn) from its profits over the next four years, on top of the 2bn euros announced in June. EADS, which owns 80% of Airbus, said the new delays would wipe an extra 2.8bn euros ($3.6bn; £1.9bn) from its profits over the next four years, on top of the 2bn euros announced in June.
Airbus will only deliver one A380 aircraft in 2007, having previously promised nine, resulting in mounting losses for parent firm EADS.Airbus will only deliver one A380 aircraft in 2007, having previously promised nine, resulting in mounting losses for parent firm EADS.
'Disappointment''Disappointment'
Emirates, which has the biggest order of A380 airliners, will see its first delivery arrive 10 months late, and says it is now reviewing its options.Emirates, which has the biggest order of A380 airliners, will see its first delivery arrive 10 months late, and says it is now reviewing its options.
Qantas, which will not take delivery of its first A380 until August 2008, said it was "disappointed" by the delay, the third to be announced in the last six months.Qantas, which will not take delivery of its first A380 until August 2008, said it was "disappointed" by the delay, the third to be announced in the last six months.
The airline said it would not speculate on whether it would cancel any orders, saying it was a matter for it and Airbus.The airline said it would not speculate on whether it would cancel any orders, saying it was a matter for it and Airbus.
"How are we going to mount the capacity in the short-term?" said the airline's general manager John Borghetti.
I think this could be the tipping point... for those about to order some large aircraft JB Groh, Aviation analystI think this could be the tipping point... for those about to order some large aircraft JB Groh, Aviation analyst
"Where do we go from here? It is all part of the review."
Singapore Airlines, which is buying 19 A380 planes, said it was reviewing the situation while Virgin Atlantic, which said the delays had "serious implications" for its business, is doing the same.Singapore Airlines, which is buying 19 A380 planes, said it was reviewing the situation while Virgin Atlantic, which said the delays had "serious implications" for its business, is doing the same.
But Airbus insisted that no airlines had yet cancelled any orders.But Airbus insisted that no airlines had yet cancelled any orders.
"Everybody is still on board," Mr Streiff told the BBC."Everybody is still on board," Mr Streiff told the BBC.
"Our customers are just working with us, helping us on how to improve the schedule.""Our customers are just working with us, helping us on how to improve the schedule."
Troubled historyTroubled history
The development of the A380 - the world's largest passenger jet - has been blighted by delays, partly linked to wiring problems.The development of the A380 - the world's largest passenger jet - has been blighted by delays, partly linked to wiring problems.
The 12bn-euro project is already more than a year late.The 12bn-euro project is already more than a year late.
A380 ORDERS SO FAR Emirates: 43 aircraftLufthansa: 15Qantas: 12Air France: 10Singapore Airlines: 10Fedex: 10International Lease Finance: 10UPS: 10Thai Airways: 6Virgin Atlantic: 6Korean Air Lines: 5Etihad Airways: 4Qatar Airways: 2China Southern Airlines: 5Kingfisher Airlines: 5Malaysia Airlines: 6 Source: Airbus See EADS share price Analysis: Airbus problemsA380 ORDERS SO FAR Emirates: 43 aircraftLufthansa: 15Qantas: 12Air France: 10Singapore Airlines: 10Fedex: 10International Lease Finance: 10UPS: 10Thai Airways: 6Virgin Atlantic: 6Korean Air Lines: 5Etihad Airways: 4Qatar Airways: 2China Southern Airlines: 5Kingfisher Airlines: 5Malaysia Airlines: 6 Source: Airbus See EADS share price Analysis: Airbus problems
Airbus now aims to deliver 13 more A380 aircraft in 2008 and 25 the following year.Airbus now aims to deliver 13 more A380 aircraft in 2008 and 25 the following year.
It has sold 159 of the $250m jets to 16 airlines, many of whom are already demanding penalties for late delivery.It has sold 159 of the $250m jets to 16 airlines, many of whom are already demanding penalties for late delivery.
Experts said it was unlikely that airlines would cancel any orders as the huge growth expected in air travel meant they needed more planes.Experts said it was unlikely that airlines would cancel any orders as the huge growth expected in air travel meant they needed more planes.
The high levels of compensation likely to be demanded by carriers meant that the finished aircraft would eventually represent good value.The high levels of compensation likely to be demanded by carriers meant that the finished aircraft would eventually represent good value.
"By the time the airlines get through extracting all the penalties and concessions out of Airbus for all the delays, they are going to have the cheapest widebody in the world," said analyst Scott Hamilton. But one expert said the production problems afflicting the A380 could deter prospective customers.
"They would be crazy to let that deal get away from them."
However, one expert said the production problems afflicting the A380 could deter prospective customers.
"I think this could be the tipping point," said J B Groh, an aviation analyst with investment bank DA Davidson."I think this could be the tipping point," said J B Groh, an aviation analyst with investment bank DA Davidson.
"Not necessarily for those customers that have already ordered the A380 but for those about to order some large aircraft.""Not necessarily for those customers that have already ordered the A380 but for those about to order some large aircraft."
Job concerns
Airbus' plans to cut $2bn in costs from 2010 onwards have caused concerns in France, Germany and the UK, where the bulk of its manufacturing operations are located.
German finance minister Peer Steinbrueck urged Airbus to safeguard jobs in Germany amid reports that some production facilities in Hamburg could close and transfer to the firm's Toulouse headquarters.
French Prime Minister Dominique de Villepin said he had "full confidence" in management to push through its restructuring programme.