OUCH!! Airbus’ delays with their vaunted A380 superjumbo jet put company at risk.
June 20, 2006 by SwizStick
Filed under Airlines, Misc Logistics, QuickNews
At stake is an order worth more than US$3 billion. The threatened cancellation came about after demands for compensation from Emirates and Singapore Airlines, also A380 customers.
International Lease Finance Corp., the No. 1 aircraft-leasing company, said late yesterday that it may cancel its order for 10 of the 555-seat planes after Toulouse, France-based Airbus delayed delivery for a second time because of difficulties installing wiring.
“We could cancel and are considering canceling all or some of our A380 order,” International Lease Chief Executive Officer Steven Udvar-Hazy said in an interview. “We are not happy and on safe ground to cancel the order.” Airbus told the Los Angeles- based company the planes will now be delivered 12 to 14 months later than scheduled in the original agreement, he said.
And what do the analysts think?
“Order cancellations will continue,” said Maria Claudia Quintano, a trader at Societe Generale SA in Paris. There’s also “a loss of confidence in management which surprised the market with its problems.”
Chicago-based Boeing may sell more of its competing model, the 747-8, which has 18 orders for cargo versions of the plane and one order for a passenger model. The A380s are now at least a year behind schedule. Airbus had orders for 159 of the planes, which have a list price of $300 million each, from 16 customers. International Lease has an order for five passenger versions of the A380 and five freighters.
This “could give the 747-8 some momentum,” Udvar-Hazy said. “The current situation could precipitate one or more airlines ordering it and that would be a serious setback” for Airbus. He wouldn’t say if he planned on ordering Boeing’s new version of the 747.
Bad news for Airbus, good news for Boeing – provided Boeing doesn’t fall into the same mistakes and also experience delays in delivery.
Much, much more on Airbus’ recent troubles here, here, and a lot more here.
Somewhere in Boeing, executives are lighting cigars and pouring brandy.
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