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Last Updated: Wednesday, 14 June 2006, 17:22 GMT 18:22 UK
EADS shares slump on Airbus hitch
People watching the A380 and other planes flying
The A380's development and launch has been closely watched
Shares of European aerospace firm EADS have tumbled after its Airbus plane unit warned of further delays in deliveries of the new A380 super-jumbo.

EADS shares sank 6.69 euros, or 26.32%, to two year lows of 18.73 euros.

Airbus, which is 80%-owned by EADS and 20%-owned by the UK's BAE Systems, cut its A380 delivery target to nine from an original target of up to 27 in 2007.

As a result of the delays, EADS said it expected earnings to be hit by 500m euros a year between 2007 and 2010.

Order book

The Airbus A380 landing at Heathrow Airport
The Airbus A380 landing at Heathrow Airport

The company is predicting that earnings will be dented by a total of 2bn euros ($2.5bn, 1.4bn).

Analysts have had to rework their earnings and share-price targets as a result, with Deutsche Bank cutting its recommendation on the stock to "hold" from "buy".

The worry is that airlines may cancel orders or turn to rival producers such as Boeing.

Buying Boeing

And in a related development, Singapore Airlines, the launch customer for the A380m, has announced that intends to buy 20 Boeing 787 'Dreamliners', with an option for an additional 20, to be delivered between 2011 and 2013, at a list price of $9bn.

The Dreamliner is a rival for Airbus's twin-engined A350, whose launch has also been delayed. The Boeing plane carries between 250 and 290 passengers and has an exceptionally long range of 8,600 to 8,800 miles.

This is the second time Airbus has had to tweak its production of the much-heralded A380. So far, it has cost Airbus 12bn euros ($14bn; 8bn) to develop.

The A380 will be the world's largest airliner, seating more than 800 passengers across twin decks.

Airbus has taken 159 firm orders for the plane from 16 carriers, including Emirates, Qantas and Virgin Atlantic.

Despite the delays, EADS said its first A380 would be delivered to Singapore Airlines on schedule later this year.

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