Airbus airlines rally in support of superjumbo

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The Independent Online

Airline customers for the Airbus A380 super-jumbo are preparing to rally round the embattled aircraft manufacturer for fear that mass cancellations would weaken the company further and play into the hands of its rival Boeing.

The board of Virgin Atlantic, which is buying six A380s, is expected to stick with the order when it meets today to review the position, although it may decide to defer some deliveries to later dates.

Sources at Emirates, the biggest single customer for the A380 with 45 planes due for delivery, have also dismissed suggestions it may cancel half the order. It is thought that if Emirates does decide to cut the order at all, the reduction will involve only a handful of planes, certainly fewer than 10.

Tim Clark, the president of the Dubai-based airline, described the A380 as a "seriously good aircraft when it eventually arrives". However, he added: "The problem is, nobody is really sure when that will be."

Hitches with the electrical wiring on the 555-seater jet, blamed on Airbus's assembly plant in Hamburg, have delayed deliveries of the aircraft for two years and forced EADS, Airbus's parent company, to take a €4.5bn hit to profits between now and 2010.

Tensions continued to rise in European capitals yesterday over the level of job cuts needed to put Airbus back on course, moving the French President Jacques Chirac to signal his support for the company before a Franco-German summit today to discuss the crisis.

The British Government, which has pumped £530m of launch aid into the A380 is also deeply worried and is pressing EADS for assurances that wing manufacture will remain in the UK now that BAE has sold its 20 per cent shareholding in Airbus.

However, Airbus customers still seem to have faith in the plane itself even though Airbus has received only 159 firm orders from 16 customers - far short of the 350 deliveries it needs just to break even on the A380 programme.

An added complication is that the delay in A380 deliveries will prevent Airbus funding some of the $10bn development costs of the mid-sized A350 from its own cash flows, forcing it to go to its shareholders for what would in effect be a rescue rights issue.

Airlines are concerned that if Airbus is weakened or, at worst fails, then it will give Boeing a monopoly which it will be able to use to dictate prices. One airline executive said: "Our view is that it is probably better to help Airbus through its present predicament rather than give Boeing a clear run. In the end the airline industry needs a strong Airbus. How healthy would it be to have just one supplier?"

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