June 20, 2006

Meanwhile, back at the hanger

The European aviation consortium Airbus has hit some serious turbulance over its new A380 super-jumbo. Parent company EADS staked its future on the A380, to the tune of 11 billion Euros in development costs. Now major investors are bailing, causing the value of EADS stock to drop by a third in just one day.

What's the problem?

The electrical systems are described as "a shambles" and "hundreds" of problems remain unresolved. The aircraft is so overweight that the landing gear cannot safely handle the load. To compensate, weight is being trimmed wherever possible. Embarrassingly, a wing snapped off during stress testing because of the reduced thickness of the metal.

And of course, all this redesign-on-the-fly means that paying customers have to wait longer for their aircraft.

Just nine of the $300m double-decker whales will be delivered next year instead of 20 to 25, with a backlog of delays and penalty clauses cascading through the decade.

At a minimum, the blunder will cut profits by €2bn over four years, the company admitted yesterday.

But that's not the end of their troubles. Also taking a hit is their "new" mid-range A350, which is based on an older model airframe. So far they've gotten orders for less than half needed for break-even. The head of Emeriates Airlines likes the A350, but says:

"Unfortunately for Airbus, two things happened: Boeing came up with an even better plane and the price of fuel went through the roof."

Boeing's 787 Dreamliner (which I first talked about here) is higher-tech and more fuel-efficient, which has recently become a much bigger factor in purchasing decisions.

The economic impact of the super-jumbo also reaches areas you wouldn't normally consider:

The wake turbulence from the A380 may be such a threat to other aircraft on take-off and landing that the International Civil Aviation Organisation is imposing a barrier of 10 nautical miles, twice the distance for a Boeing 747.

The rule, temporary at first, changes the cost calculus for airports such as Heathrow, which depend on constant traffic flow for profit margin.

Even the German author of a book on Airbus is down on the A380:

"The A380 may have a future as a cargo freight plane."


Thanks to Transterrestrial Musings for the pointer, in a post on a semi-related subject.

Posted by Ted at June 20, 2006 11:39 AM | TrackBack
Category: SciTech

aah, schadenfreude.

Posted by: buckethead at June 21, 2006 01:40 PM
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