Deliveries of Airbus A380 Superjumbo Delayed

PARIS – Airbus said on Wednesday deliveries of its 21st-century flagship, the double-decker A380 (search) superjumbo, would be delayed by up to six months, taking the flourish off one of the most trumpeted aviation launches in decades.

Disgruntled airlines, at least one of which intends to seek compensation, announced the delay in delivering the largest passenger jet ever built just weeks after its maiden flight.

Airbus had already starting preparing the ground for such an announcement -- Singapore Airlines (search), which is due to fly the first scheduled A380 service between London Heathrow and Singapore, first said on May 3 it had been notified of a postponement -- and delays to new aircraft are not uncommon.

But it adds to a growing list of headaches at the European aircraft builder as it slides into a major trade dispute over subsidies with arch-rival Boeing (BA) and struggles to fill an internal power vacuum created by its squabbling shareholders.

Keeping the 10-billion-euro A380 project on track after cost overruns and now delays will be a major task for the next head of Airbus, who has yet to be appointed after its fiery French boss Noel Forgeard fought to become the next co-CEO of parent EADS (search).

The world's second-largest aerospace group had given Forgeard and his German counterpart in EADS until June 1 to come up with a list of appointments to put an end to months of Franco-German discord over who should run Airbus. But an industry source said the EADS board was not yet ready to meet.

The job is expected to go for the first time to a German aerospace executive, Forgeard's number two Gustav Humbert.

Shares in EADS fell as much as much as 2.2 percent on news of the A380 delays, leading decliners on the French blue-chip index. At mid-session they were off 1 percent at 23.77 euros.

The shares had opened on a backfoot after Australian carrier Qantas Airways (search) said delivery of the A380 aircraft which it has bought would be delayed six months to April 2007.

Singapore Airlines said it would take delivery of the first A380 in the fourth quarter of 2006 instead of mid-year.

Emirates -- the biggest customer with an order for 43 planes worth over $12 billion -- would also be affected, Qantas said, adding that "manufacturing issues" at Airbus meant it would now receive the first of 12 A380s in April 2007.

Qantas said it planned to seek compensation from Airbus.

"This is disappointing, given that we have met all of Airbus' deadlines for Qantas specifications," Qantas Chief Executive Geoff Dixon said.

"We are developing contingency plans to ensure there is no impact on our schedules or available capacity during the six-month delay."

In Paris, Air France also reported delays in its order of 10 planes due to be delivered in April 2007.

Airbus confirmed deliveries would be delayed up to six months.

"It can vary but it is up to six months, depending on the serial number (of the plane)," a spokeswoman for the Toulouse-based aircraft manufacturer said, adding that delays were not linked to any serious flaws discovered in test flights.

She declined to comment on the question of penalties.

Industry analysts said it was not clear how much Airbus might have to pay in compensation to airlines for the delay.

"Presumably it would be related to the cost of not having the aircraft and running other planes in the interim," said one aerospace analyst.

Another said penalties may already be built into the 1.45 billion euros of cost overruns already announced by Airbus but that delays could weigh on operating income during 2006.

Airbus contributes virtually all operating profit at EADS, which owns 80 percent of the company. The balance is held by BAE Systems Plc, whose shares rose 1.2 percent to 272-1/2p.

Airbus operating margins are benefiting, however, from a rebound in the dollar, the payment currency for aircraft.

Airline officials said a delay of six months or more could hamper plans.

"We are concerned about its effect on Emirates' growth plans, but until we receive the revised schedule and have an opportunity to study it, we will not be able to ascertain its impact," a spokeswoman for Emirates said.

News of the delay could also give potential new customers reason for pause, analysts said, noting the Paris air show which is a major event for Airbus order announcements, is less than two weeks away.

Preparations for the air show already risk being poisoned by a major transatlantic trade clash over aviation subsidies, with Boeing and Airbus each accusing the other of lapping up billions of dollars in illegal taxpayer assistance.

Washington and Europe filed tit-for-tat lawsuits this week in what could become the biggest commercial dispute in history.