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Thu, Sep 28, 2006

Is Airbus Feeling Some Heat From EADS?

A380 Schedule Announcement Could Come As Early As Friday

French newspaper LaTribune, citing unidentified company officials, says Airbus may make an announcement about A380 delivery schedules as early as Friday -- this according to Bloomberg.

Airbus is in the midst of big problems with its new A380 program. Just how big no one really knows, and Airbus, of course, isn't talking. But from all external indications, it's big. LaTribune reports there are internal rumors Airbus may end all A380 program-related activities at its Hamburg, Germany plant.

You may remember all the shakeups with company leadership earlier in the year -- mucky mucks with EADS, Airbus' parent company, getting fired for selling stock, Airbus leadership replaced when the first round of A380 delays were announced, etc., etc. And just last week the European planemaker told its customers to expect even more delays because they were having trouble with the plane's 300 miles of wiring.

After Airbus announced that second program delay -- in less than three months -- EADS said they hadn't had enough time in looking things over to determine exactly how much the latest delay would impact the program, time and dollar-wise. Bloomberg estimates cost overruns might total $5.5 billion before everything is said and done; company earnings might be hit for $1 billion a year.

Following Airbus' surprise announcement last week, EADS told the circling media wolves to expect more information about Euros and schedules in around four weeks. With this latest report from France, it now looks as though someone lit a fire over at Airbus.

Perhaps Korean Air Lines' announcement they would seek compensation from Airbus for the delays has prompted company leadership to move a little faster, and hammer out whatever issues besides wiring might be interfering with getting this program airborne.

FMI: www.airbus.com

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