February 8, 2007
Airbus Shows Off Troubled Craft
ABOARD AN AIRBUS A380 - So this is what all the trouble was about.
Airbus' A380 - the world's largest passenger plane - has had a two-year production delay. But a trip on the first flight open to the media demonstrated why all but one customer, a cargo carrier, think the superjumbo is worth the wait.The interior is roomy, and economy seats leave ample elbow room in the 540-seat demonstration cabin fitted by Airbus.
Airlines Qantas, Emirates and Singapore Airlines plan to go further, fitting the plane with fewer than 500 seats to give each passenger more space. Other airlines are expected to follow their lead, Airbus Chief Operating Officer John Leahy said.
"It's a game-changing airplane," the European aircraft maker's top salesman said, shortly before boarding the flight with about 200 reporters at Airbus' headquarters in Toulouse, southern France. "The only minor problem is that we couldn't build it on time."
Announcing the latest production setback, Airbus parent European Aeronautic Defence and Space Co. said last year that the accumulated two-year delay would wipe 4.8 billion euros ($6.2 billion) off profit by 2010. Last month the Franco-German defense group warned that the final bill would be higher, without giving a figure.
FedEx canceled its 10 orders for the superjumbo freighter and ordered Boeings instead, but Singapore Airlines ordered more A380s - and Airbus said Wednesday it expects to sell at least 20 more in 2007, to two or more customers.
"We have a lot of interest in the aircraft, despite all the problems we had last year," Leahy said.
Airbus is still negotiating compensation with airlines whose deliveries are delayed, and some - including FedEx rival UPS - have said cancellations have not been ruled out. Nevertheless, Leahy sounded more confident than ever that none of the remaining 15 customers will defect.
"All those customers, all of whom have cancellation rights on this program, have decided not to cancel," he said. Airbus is on track to deliver the first A380 to launch customer Singapore in October, company officials said Wednesday.
Leahy was tightlipped about the custom features planned by airlines but suggested that some of the wilder predictions - which have included onboard casinos, beauty salons and even hot tubs - were wide of the mark.
There is "a little bit of hype," he said. "The reality will be lounges, the reality will be duty free shops where you can generate some extra revenue." One carrier has already installed a shower in first class, Leahy added, declining to identify the airline.
The superjumbo used for Wednesday's flight boasted a bar on each of the decks - linked by two large staircases, making it easy to roam around.
Noise was noticeably subdued, even during takeoff at full thrust, when the engine roar outside could have passed for a neighbor mowing the grass half a block away.
The Rolls Royce Trent 900 engines are the quietest now available and, thanks to a wingspan 24 percent longer than the 747s, they are further than usual from the cabin - where advances in soundproofing and air conditioning technologies also contribute to the sense of calm. Outside, Airbus claims that the A380's "noise footprint" is half the size of that of rival Boeing.
Just as a larger boat gives a smoother ride across choppy seas, turbulence is felt less violently aboard the A380.
"Where on a smaller airplane you would be shaken, in this airplane everything is really quite smooth," said Fernando Alonso, vice president of the Airbus flight test division.
The superjumbo may turn heads, but whether it can turn a profit remains to be seen. Analysts estimate the program's total cost has reached as much as 15 billion euros ($19.5 billion).
Harald Liberge of CM-CIC Securities is skeptical about the 420-plane break-even point previously projected by Airbus - particularly in light of the compensation talks still under way over much of the current A380 order book. Airbus Chief Operating Officer Mario Heinen declined to give a revised program cost or confirm the break-even figure.
The drain on resources has also set Airbus back in the more lucrative market for midsized jets, where Boeing's long-range, fuel-efficient 787 has been a runaway success. Airbus launched its response, the A350 XWB, just three months ago for 2013 entry into service - five years after its main rival.
The A380 may be an "engineer-driven" program that "will not make a penny for the next 10 years," Liberge said - but that does not mean it will not be a commercial success for decades after that.
"Like the 747, it should be operating for the next 40 years," Liberge said. "The demand is definitely there - this isn't another Concorde."
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