A380 Issues
Airbus superjumbo fresh delay report hits shares
Wednesday September 20, 5:40 am ET
PARIS (Reuters) - Planemaker Airbus is expected to announce fresh delays to its embattled A380 superjumbo in coming days, a French media report said, adding to woes for parent firm EADS whose shares were also hit by a brokerage downgrade.
Airbus' 12-billion-euro ($15.19 billion) program to produce a new class of mammoth plane is already overdue and triggered an EADS profit warning and management shake-up in June.
On Wednesday, a report in French newspaper Les Echos, which did not cite any sources, said Airbus could announce a delay of at least six months for its first deliveries to clients such as Air France, and only four deliveries next year to Singapore Airlines and Emirates.
"According to our information, the assembly problems at the Toulouse-Blagnac plant would not allow it (Airbus) to hold to its last pledge of delivering at least nine aircraft in 2007 (against 25 initially planned)," the newspaper said.
An Airbus spokeswoman said the report was "speculation."
"We have been undertaking a full review of the A380 program since the summer. It is not finished yet. We will communicate after the EADS board meeting on September 29," she said.
EADS shares shed as much as 4 percent to 21.82 euros before easing back to 22.50 euros in mid-morning trade.
An EADS spokesman in Germany said checks into the A380 delivery delays were not yet concluded. "There are still no results at present."
Analysts expect Airbus to announce the findings of a 100-day study ordered by new Chief Executive Christian Streiff in coming weeks.
Some expect Streiff to favor getting the bad news out of the way quickly, including a possible one-off charge stemming from delays in launching the mid-sized A350 model.
Airbus has struggled to market the A350 in the face of strong demand for rival Boeing Co.'s 787 which is due 2008, now likely beating the Airbus to market by four years.
The A380's woes stem from complications in wiring the massive double-decker planes and have sparked calls for compensation from customers, some of whom have hinted they might reconsider their orders.
Emirates has ordered 43 of the aircraft -- by far the largest order of the plane which has a list price of $300 million. It said at the weekend it had not yet considered canceling its order.
IXIS Securities analyst Lorraine Thoumyre said in a research note that she was cutting her rating on EADS shares to "reduce" from "buy" while keeping a share price target of 23.90 euros.
"The accumulation of multiple rumors and comments create a stack of presumptions which give credence to a new delay of the A380," she said.
Airbus has been rocked by the A380's woes and its fitful efforts to launch the A350.
The decision by 20-percent shareholder BAE Systems (London:BA.L - News) to sell out of the planemaker has not helped sentiment, either.
Russian flag carrier Aeroflot said on Wednesday it would go ahead with plans to buy the Boeing 787 but that it also planned to buy the Airbus A350 later