Airbus Confirms Delay: A380 Hit by New Production Problems

After days of reports that the Airbus A380 was hit by production problems, the plane maker's aerospace parent company EADS on Thursday was compelled to confirm delivery of the massive passenger jet was yet again likely to be delayed yet again.

But EADS officials would not say how long the delay would be or how much it might cost Airbus. The superjumbo A380 has already been put back a year by two previous production problems. The €12-billion ($15-billion) project has had tremendous difficulty with the 500 kilometers of wiring required for each of the mammoth planes.

"Although the company's assessment is still under way, continuing industrialization challenges with the wiring of production aircraft have been identified and are being tackled," EADS said in a statement. "Consequently, from what is known today, there will be further delays." Details are expected within the next four weeks.

The A380, meant to be the new flagship of Airbus, has been plagued by production problems and the plane's delivery was already delayed by six months last June. Each time the massive double-decker A380's debut is pushed back, Airbus faces penalties to be paid to the airlines waiting for planes. That in turn pressures the EADS share price and gives Airbus archrival Boeing a chance to lure away customers.

The problems have exacerbated tensions within the aerospace group, which recently went through a management shakeup. EADS shares have lost almost a third of their value this year, as the delayed A380 and an expensive redesign of its smaller A350 shook investors' confidence. Then came the blow that British partner BAE Systems wanted to sell its 20-percent strategic stake in Airbus back to EADS and the shock that Russian aerospace interests decided to buy some 5 percent of its shares.

In an attempt to save some face, aerospace analysts still expect Airbus to try and deliver the first A380 -- destined for Singapore Airlines -- as scheduled by the end of December. However, other customers expecting planes in 2007 are likely to be disappointed.

mry/reuters