Airbus slows A380 output

photo by NguyenDai

Airbus unsurprisingly announced that it would lower the amount of A380 aircraft it produced this year to 14, down from 18. Originally, the company had planned to increase production this year compared with last (and still is expected to deliver 20 next year), but the weakened economy and recent scare over swine flu has had an impact on travel demand, causing airlines to defer/delay some aircraft deliveries. IATA has estimated that air traffic, which started declining back in September, fell by 11% in March. (The figures for April will be released soon.)

It's only the latest bump in the A380 program, which has not only seen cost overruns (development spending is now at $18 billion, up from the originally planned figure of $12 billion) but also substantial delays. Singapore Airlines, Qantas and Air France are expected to be among the airlines that take delivery of A380s this year. And Airbus is also scaling back production of other models, too - a move that competitors Boeing and Embraer have also followed.

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British Airways orders 787, A380

British Airways announced last Thursday that it would order 12 Airbus A380s and 24 Boeing 787s, with options for 7 more A380s and 18 more 787s. The planes will be delivered between 2010 and 2014. "This is an exciting day for British Airways with our largest fleet order since 1998," said Willie Walsh, BA's chief executive. "It's great news for our business, our customers and the environment." Walsh also pointed out that the two new types are environmentally friendly and also produce a quarter of the noise of a Boeing 747-400.

BA has said that they will use the A380 to "provide more capacity for the airline's key high-density markets and [to] maximise use of scarce Heathrow slots", while the 787 will "be used to start new routes and increase frequencies in existing markets". The airline also announced that it is looking to replace the 747-400 and is looking at the 787-10, 777-300ER and A350XWB models as potential replacements.

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Singapore announces first A380 commercial flight

Singapore Airlines has announced the day of the first commercial flight of the A380. The flight, SQ 380, will be on October 25, from Singapore to Sydney. ""Everyone at Singapore Airlines is keenly anticipating the delivery of this new plane, and our people are working hard on final preparation for its entry into service," said Singapore CEO Chew Choon Seng. "The first flight promises to be one of the most exciting occasions in aviation history."

All of the proceeds from ticket sales for the flight will go to charity. (Apparently, ExxonMobil is also donating fuel for the trip. ) If you're interested in purchasing a seat on either the first flight (or the first return flight the next day), you'll be able to bid for one on eBay starting August 25.

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Intrepid Aviation and Thai order A330; Leahy: "Airbus is back"

Aircraft lessor Intrepid Aviation announced a firm order of 20 Airbus A330-200 freighter airplanes, the largest order received for the aircraft so far. Deliveries will start in 2010 and run through 2012.

Thai Airways International also announced that they would be purchasing A330s (though none of the freighter variety). It has ordered eight more A330-300s, adding to its fleet of twelve A330s that it currently uses on routes across Asia. The airline also reconfirmed its order for the A380, the first of which will be delivered to the airline in late 2010.

Airbus also held a press conference at Le Bourget earlier today, in which COO John Leahy announced that "Airbus is back". With all the orders that the airline has announced in the last few days, Leahy is probably right.

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Paris Air Show: Day 1

The 47th Annual Paris Air Show opened earlier today in Le Bourget, France. The Air Show is a place where many airlines announce orders for airplanes from the major manufacturers like Boeing and Airbus, and this year, the main focus is on two airplanes in particular: the 787 and the A350. Here are the highlights of the first day's events. This post will also be updated throughout the day - check back later! (Pictures are courtesy of Boeing and Airbus.)

GECAS orders Boeing 777 freighters
GECAS (GE Commercial Finance) announced an order for six Boeing 777 Freighters, although GECAS could substitute some of them for passenger models in the future, if desired. The order is valued at $1.42 billion at list prices (keep in mind that for the majority of these large orders, there's usually a discount).

Lion Air orders Boeing 737-900ER
Indonesian carrier Lion Air announced an order for 40 more Boeing 737-900ER airplanes, an order valued at over $3 billion in list prices. Lion Air now has 100 total orders for the 737-900ER.

Akbar Al-Baker, CEO Qatar Airways, and Louis Gallois, CEO Airbus

Qatar Airways orders 80 A350s, 3 more A380s
Qatar has ordered 80 A350 'XWB' planes and an addition three A380s, meaning that they now have five A380s on order. The A350 order is broken up into 20 of the -800, 40 of the -900, and 20 of the -1000 varieties. Deliveries, according to Airbus, will begin in 2013. This order was a key one for Airbus, whose A350 has been slipping behind the Boeing 787 in terms of orders.

Chairman of Emirates Group Sheikh Ahmed Bin Saeed Al Maktoum and Gallois

Emirates orders 8 more A380s
Dubai-based Emirates has agreed to buy eight more A380s. A launch customer for the type, Emirates has the largest number of A380s on order, with 55. “It gives us a great sense of pride that Emirates Airline are showing such faith in our A380 product and in Airbus," said Airbus chief Louis Gallois. "We thank Emirates Airlines for this."

Jazeera Airways orders 30 A320s
Kuwait-based Jazeera has ordered 30 Airbus A320 aircraft, bringing the number of A320s it has on order up to 40.

US Airways increased A350 order, announces 'fleet renewal'
US Airways has announced that it will buy 92 Airbus aircraft for its fleet renewal in the future. The order is comprised of 22 A350-800s, 10 A330-200s, and 60 A320 family airplanes (a mixture of A319s, A320s and A321s). This is a sign that US Airways is committed to operating a predominantly Airbus fleet - it already operates 205 Airbus aircraft.

Nouvelair orders 2 A320s
Tunisian charter carrier Nouvelair has ordered 2 A320s, complementing the fleet of thirteen A320 airplanes (A320s and A321s) that it already has.

GECAS orders 60 A320 family airplanes
GECAS, which earlier announced an order for the 777F, has also signed a deal with Airbus for 60 more A320 family airplanes, which include the A318, A319, A320 and A321.

ALAFCO chair Ahmed Al Zabin with Airbus COO John Leahy

ALAFCO orders A350, A320
Kuwait-based ALAFCO (Aviation Lease And Finance Co.) has signed a firm contract for 12 A350s and has also ordered seven A320s.

S7 CEO Vladislav Filev with Airbus COO Leahy

S7 orders 25 A320 family planes
Russian carrier S7 has ordered 25 A320-family airplanes, adding to its leased fleet of A319s. Deliveries start in 2009, and the order is worth $1.8 billion at list prices (even though Airbus sales chief John Leahy said the actual price was "somewhat" less than list). Interestingly, S7 also recently ordered new Boeing 737s.

Air France signs MOU for A380, A320
Airbus announced that Air France would sign a 'memorandum of understanding' to buy two A380s and 18 A320s, although it should be noted that this is not yet an official order.

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A380 arrives at Paris

The Airbus A380 made its first arrival today at Paris' Charles de Gaulle Airport, which has had to undergo several modifications, such as lengthening runways and strengthening taxiways, to ensure that it can handle the aircraft. Airbus Chief Executive Louis Gallois said, "This airplane has created a lot of debate. Now we know it is here, it is beautiful, it is excellent." The plane will stay at CDG for two days in order to undergo testing before flying to Asia.

Some photos of the event, courtesy of Airbus:

The A380 arrives at CDG.


The aircraft gets a welcome from the CDG fire department.

French Transport Minister Dominique Bussereau tries out one of the A380's seats.

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Reactions to FedEx's A380 cancelation

After FedEx's decision yesterday (see previous blog post) to cancel its A380 orders because of prolonged delays on Airbus' part, there have not been any other cancellations by other airlines ordering the A380 - as of yet.

Singapore Airlines, which will be the first airline to put the A380 into service, says that it has no plans whatsoever to scrap its order, although it will get its first A380 in October of 2007 instead of December of this year, as originally planned. The airline said that it won't be affected greatly by the delay because it's taking delivery of six Boeing 777-300ERs this month.

FedEx rival UPS, which has ten A380s on order (as well as options on another ten) said that the company isn't rushing to make a decision about whether to cancel its orders or not. "We are not pressed to make a decision," said Chief Executive Officer Mike Eskew. "Our backs are not against the wall on this issue." UPS says that it has enough planes scheduled for delivery in the next few years to avoid any problem.

Airbus company EADS also reported its first quarterly loss in three years earlier today.

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FedEx Dumps Airbus, Goes to Boeing

Cargo delivery giant FedEx announced today that it has canceled its order for 10 A380-800F planes and instead has ordered 15 Boeing 777 (777F) freighters. Notably, this is the first A380 customer that Airbus has lost.

CEO Frederick Smith said, "The availability and delivery timing of this aircraft, coupled with its attractive payload range and economics, make this choice the best decision for Fedex." He went on to say, "Global demand for air cargo and express services continues to grow rapidly and FedEx has made significant investments in our network to meet customers' needs and fulfill our business objectives. Therefore, it was necessary and prudent for us to acquire the Boeing 777 Freighter." Simply put, FedEx needs new planes soon, not later, and if Airbus can't deliver, then they figure that Boeing will.

Right now I'm sure everyone at Boeing headquarters in Chicago is partying, but not the same in Toulouse, France - Airbus headquarters. Airbus has been facing some tough times recently, with Emirates threatening to cancel its order for 43 passenger A380s (the largest customer of the plane to date). Right now, the scheduled first delivery of the A380 to an airline will be in October 2007 - two years behind schedule.

Deliveries of the aircraft to FedEx are expected to start in 2009 and last through 2011. At the time of writing, shares of Airbus parent company EADS fell 3.05% while Boeing shares climbed 5.26%

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A380 Faces More Delays as Customers Rethink Purchases

Just when the news over at Airbus couldn't get any worse - lagging behind Boeing in the orders count, A380 delays, etc. - it did. Airbus confirmed recently that the A380s scheduled to be delivered to customers will be further delayed due to 'wiring problems'. The planes will be delayed another year.

Emirates, the largest customer of the type, will have to wait an addition ten months for its planes, something that it's president is not too happy about: "It's a very serious issue." Emirates, along with Virgin Atlantic, have announced that they are 'reviewing' their options - meaning that they might order fewer or potentially none of the airplanes.

Airbus earlier had said it would deliver nine A380s next year - a number that's now down to 9. Delays are, in total, two years late - meaning parent company EADS is losing billions. And this comes at a critical time, too, as Airbus tries to regain the lead from archrival Boeing.

Will Emirates really cancel its A380 order like some have predicted? Not likely. The airline has, after all, gained much publicity over its huge A380 order (43 aircraft), which is the largest so far. The second largest order, from Lufthansa, is only 15 aircraft. That said, whether Emirates cancels or not, Airbus is still in quite a bit of trouble for the time being.

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