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Third A380 delay tests airlines' patience

Wiring woes will cost Airbus dear

The smart choice: opportunity from uncertainty

The patience of airlines waiting to get their hands on the Airbus A380 is beginning to wear thin following an announcement yesterday that just one example of the "Superjumbo" would be delivered in 2007, as opposed to the nine previously promised by Airbus parent company EADS.

The EADS press release states: "According to this revised plan, the first A380 will be delivered in October 2007. Thirteen more will be delivered in 2008 and 25 in 2009. The industrial ramp-up will be completed in 2010, when 45 A380s are going to be delivered."

While previous delays were attributed to "wiring problems", the latest release is a bit more forthcoming:

In June, the amount of work to be done to finalise the installation of the electrical harnesses into the forward and rear section of the fuselage had been underestimated. Beyond the complexity of the cable installation, the root cause of the problem is the fact that the 3D Digital Mock up, which facilitates the design of the electrical harnesses installation, was implemented late and that the people working on it were in their learning curve.

This third delay to the programme, following similar knock-backs in June 2005 and June 2006, will cost EADS an extra €2.8bn euros in profits over the next four years, in addition to the €2bn euros announced in June.

According to the BBC, EADS may also have to stump up compensation for airlines including Emirates, Singapore Airlines, Qantas, and Virgin Atlantic, who have 43, 10, 12 and six A380s on order, respectively.

Emirates will now get its first A380 10 months late, and says it is "now reviewing its options". Qantas won't take delivery of its first example until August 2008. The airline's general manager John Borghetti asked: "How are we going to mount the capacity in the short-term?"

Singapore Airlines said it was "reviewing the situation", while Virgin Atlantic expressed concern that the delay had "serious implications" for its business.

Airbus boss Christian Streiff, however, insisted all the airlines were "still on board", and told the BBC: "Our customers are just working with us, helping us on how to improve the schedule."

Indeed, experts think it's unlikely airlines will cancel orders. Analyst Scott Hamilton explained: "By the time the airlines get through extracting all the penalties and concessions out of Airbus for all the delays, they are going to have the cheapest widebody in the world. They would be crazy to let that deal get away from them."

Accordingly, there are still 159 A380s on order. Sadly, as the Airbus website notes, there are currently 0 aircraft delivered and 0 in operation. ®

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