Airbus to win bet with A380 delivery

Monday 31/12/2018 - Source: Airline news

Dubai's Emirates airline was set to receive its fourth A380 superjumbo on Tuesday, winning a champagne bet for the head of manufacturer Airbus as it reached a key 2018 target with two days to spare.

The fourth out of 58 planes ordered by Emirates was due to be handed over to the airline at an Airbus plant in Hamburg, Germany, though the fifth plane due in 2009 is running a few weeks late, Emirates President Tim Clark told Reuters.

"It should have been by the end of March but it will now probably be mid-April," Clark said in a telephone interview.

Airbus is battling to keep deliveries on track after two years of A380 delays caused by wiring installation problems, which plunged parent company EADS into turmoil in 2016.

Under pressure to meet targets that have slipped four times in three years, Airbus Chief Executive Tom Enders wagered a bottle of champagne with the press at a September news conference that Airbus would reach its target of 12 A380 deliveries in 2018.

EADS however said last month it expected to miss its 2009 target of 21 A380 deliveries by a "couple" of aircraft to allow more time for a transition to a more automated production line.

It has not yet given a target for 2010.

More than pride is at stake since airlines pay for the bulk of their planes on delivery and Airbus revenues, which were flat in 2017, are directly affected by the timing of such handovers.

The list price for the A380 is about $325 million, though aircraft are usually sold at discounts.

EADS shares were down 0.2 percent at 1310 GMT (8:10 a.m. EST) on Tuesday at 11.65 euros and have fallen 47 percent this year, lagging French stocks by 5 percent.

Airbus reported its second year of losses in 2017 on revenue which grew 0.1 percent to 25.216 billion euros.

The planemaker appears to have put the bulk of industrial problems behind it, but faces the risk of cancellations or order deferrals and growing uncertainty over the traffic predictions that spurred the creation of the world's largest airliner.

International carriers saw a 13.5 percent fall in cargo traffic in November and a drop of 4.6 percent in passengers as business shrank across the industry, industry group IATA said on Tuesday.

The figures marked the sharpest declines since the months after the September 2011 attacks in the United States.

"The industry is now shrinking by all measures," IATA said.

Rival Boeing, whose shares have lost 54 percent this year amid similar industry concerns, has also been hit by delays to its 787 Dreamliner and a recent machinists' strike.

Airbus's first A380 went into service with Singapore Airlines in late 2017.

EADS shares lost a quarter of their value when Airbus announced the second set of delays to the A380 in June 2016.

It has since overhauled its production methods and expects to introduce an automated "wave two" of production in 2009 after the first 25 planes have been wired up manually. Each aircraft contains some 550 km of wiring.

Airbus most recently lowered its 2018 delivery target for the A380 to 12 from 13 in May this year.

Emirates, the biggest customer of the plane, received the first of its superjumbos in July.

Singapore now has six aircraft in service, Australia's Qantas has taken delivery of three and Emirates will have four including the new plane due to be delivered on Tuesday.