Delay in Airbus A380 Delivery Annoys Top Buyers

Europe's top commercial aircraft manufacturer Airbus has been forced again to delay the planned delivery of its new A380 superjumbo jet passenger jet which are presently manufactured in Hamburg, Germany.

Airbus has advised Emirates, Lufthansa and Virgin Atlantic that there will be a further delay of at least 10-months.

The company's parent, EADS said last month that there would be a delay, the third compared with the original schedule.

"We have received information from Airbus that we're going to receive the first A380 in summer 2009," said Lufthansa spokeswoman Stefanie Stotz. "That's one year later than anticipated up to now."

Dubai based Emirates which has been advised by Airbus of a further 10-month delay to its A380 program, which means that their first aircraft will now arrive in August 2008 is incidentally the biggest customer with credential of £200 million plane, with 43 on order.

The new setback is a "very serious issue for Emirates," Tim Clark (the Chief Executive Officer of Emirates) said, adding that the airline is now reviewing its options.

Airbus parent EADS declined to confirm or deny that its board was scheduled to discuss a restructuring plan for Airbus and a new delivery timetable for its troubled A380, which already was about a year behind schedule when the latest production problems struck.

French financial daily La Tribune reported that EADS also plans to announce drastic production changes that would see the closure of A380 cabin-fitting, paint shop and delivery centers in Hamburg, Germany, and the transfer of their workloads to Airbus headquarters in Toulouse, France _ saving on transportation time and costs.

Under cost-cutting plans currently being discussed, Hamburg would focus on smaller single-aisle aircraft such as the A320 workhorse.

It is majorly being analyzed that Airbus can no longer afford the luxury of two assembly points for the troubled superjumbo.

Going past, in a statement give on June 13, the plane maker had already slashed the number of scheduled deliveries in 2007 to nine from 25 as it announced the 555-seater A380's second six-month delay and a 2 billion euro ($2.5 billion) profit warning. EADS shares plunged 26 percent the next day.

The crisis led to the sacking of Airbus boss Gustav Humbert and EADS co-CEO Noel Forgeard _ who remains under investigation by market authorities.

With all this in mind EADS is tightening its control over Airbus and is expected to buy BAE Systems PLC's 20 percent stake in the plane maker. BAE shareholders vote Wednesday on a management recommendation to go ahead with the $3.5 billion sale.

EADS shares, which had fallen recently in anticipation of big new delays, were 0.5 percent higher at 22.51 euros ($28.55) in Paris trading.

The German finance secretary has already called for Berlin to take a direct stake in Airbus to prevent the plant from being switched to cheaper sites in Russia, India and China, fearing airbus to shy away from the country.

The delays are costing Airbus serious money and have opened the door for Boeing to bounce back in a big way to reclaim the world's number one plane maker spot. The A380's new delivery calendar has so far not been commented on by airlines who have ordered, or who may order soon, and their reactions will be critical.

So lets see if Airbus can live up to its image or not.