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Last Updated: Wednesday, 4 October 2006, 13:44 GMT 14:44 UK
A380 delay sparks airlines' anger
A380 test flight in Australia
Qantas is one of many airlines having to review its position
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.

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.

Bailing out

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.

Everybody is still on board
Christian Streiff, Airbus chief executive

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 - 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 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.

'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.

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.

I think this could be the tipping point... for those about to order some large aircraft
JB Groh, Aviation analyst

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.

"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."

Troubled history

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.

A380 ORDERS SO FAR
Emirates: 43 aircraft
Lufthansa: 15
Qantas: 12
Air France: 10
Singapore Airlines: 10
Fedex: 10
International Lease Finance: 10
UPS: 10
Thai Airways: 6
Virgin Atlantic: 6
Korean Air Lines: 5
Etihad Airways: 4
Qatar Airways: 2
China Southern Airlines: 5
Kingfisher Airlines: 5
Malaysia Airlines: 6
Source: Airbus

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.

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.

But 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.

"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.




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