Wednesday, June 9, 2010

Airbus gain at the ILA but A350 issues loom

This past week Airbus got a much needed shot in the arm for the failing A380 program when Emirates Airlines ordered 32 more of the super jumbos. This will bring the airlines A380 fleet to 90 airplanes when the last aircraft is delivered in 2017. This deal meets Airbus' goal of selling 20 or more A380 this year but of the 234 total orders for this airplane, over 40% of this number is from one airline. A huge exposure for Airbus if the airline's fortune's go south. Another issue that sticks out is that the airplane has not attracted any new customers at the present time.

Airbus is still struggling to execute its production plan and it remains to be seen if they could achieve their goal of 20+ A380 deliveries this year.. The program continues to be a cash drain on EADS/Airbus' earnings overall and even with the 32 air frame order, the company is far from breakeven on this program.

More ominously, dark clouds are looming for Airbus' other major widebody program, the A350. Saj Ahmad has been poking around and this morning said that the A350 program could find its schedule pushed back by as much as one year from the current mid-2013 delivery of the first A350 to Qatar Airways. Airbus is still struggling with weight issues on the aircraft with some estimates that the airplane could be overweight by as much as 6+ tons overweight and fuel burn impacted by as much as 1% or more according to Saj. Airbus has produced a few composite fuselage panels but because they have to attach the panels to a skeletal structure the fittings used to attach the panels are turning out to be heavier than anticipated. Airbus has acknowledged that they have used up almost all their schedule margin in the program and delays on this airplane along with resources needed to tackle the problems in the A380 and A400M program will undoubtedly present a huge schedule an monetary risk to Airbus as it attempts to pay suppliers, finalize the designs and ramp up production of the A350. Even though Saj is saying up to a one year delay is in the personal feeling is that it would be 18 to 24 months.

Saj Ahmad: Airbus A350XWB “Delays Inevitable”

Flightblogger: The curious case of 90 A380s

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