Airbus faces turbulence
PARIS — Getting the world’s largest passenger aircraft off the ground, a double-decker superjumbo big enough to carry 555 passengers, is taking on crisis proportions for Airbus.
Airlines around the world punished the European aircraft maker on Wednesday for delays in the delivery of its A380 jet, demanding compensation, reconsidering orders — and in one case, striking a major deal with its rival, Boeing Co.
Shares in Airbus’ parent company plunged and Boeing’s rose as repercussions of the production problems with the world’s biggest passenger plane resonated throughout the industry.
They also raised questions about Airbus’s management and strategy, and the A380’s future. Boeing is staking its bets on a smaller, more fuel-efficient model.
Singapore Airlines, one of the world’s top carriers and the first to buy the A380, said it was unhappy with the delays Airbus announced late Tuesday. It demanded compensation and, on Wednesday, worsened the blow by announcing it would buy 20 Boeing 787-9 aircraft worth $4.52 billion and take options on another 20 planes.
Emirates Airlines, another sought-after buyer, said it was reconsidering its order of 45 A380s. Australia’s Qantas Airways said it was seeking talks with Airbus over its orders for 12 A380s and wants some of its money back. Malaysia Airlines said it was reviewing terms of its deal for six of the planes.
Airbus parent European Aeronautic Defense & Space Co. saw almost $7 billion in market capitalization evaporate Wednesday after the A380 delay announcement and a warning that operating profit would be cut by about $625 million each year between 2007 and 2010. Its shares plummeted 26 percent to close at 18.80 euros ($23.63).
Shares in Boeing, meanwhile, rose 5 percent to $80.88 on the New York Stock Exchange.
The dismal day for Airbus reflected a sharp shift in the Toulouse, France-based company’s fortunes since an A380 test model took a triumphant maiden flight last year over the Pyrenees. Airbus overtook Boeing in order numbers in 2001 and in deliveries in 2003 and until recently looked in robust shape.
But the anger fueled by the disclosure of production bottlenecks with the plane’s electrical systems — the second major delay for the $300 million A380 — suggests a less rosy future for the planemaker.
“Boeing is eating Airbus’ lunch, certainly this year. And they’ll do it again next year and for the foreseeable future, unless Airbus can pull a rabbit out of a hat,” said Jim Smith, aviation analyst and editor of Jane’s Transport Finance.
It was the second Airbus project to falter in recent years, after the A350, which it hoped would be the answer to Boeing’s 787.
The Singapore-Boeing deal stung especially deep because Airbus had hoped Singapore Airlines would be one of the first and biggest customers for the A350. But airline dissatisfaction with the A350 has forced Airbus to redesign some of its parts and consider a costly overhaul, delaying its first delivery for several years.
Airbus insisted Wednesday that it was not the A380 itself but minor production problems at fault for the delay.