Published: Friday, July 27, 2012, 6:04 a.m.
Airbus delays A350, owner EADS ups forecast
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Airbus
Airbus' parent company, EADS, announced on Friday a delay to the new A350 XWB jet.
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Airbus parent company EADS NV on Friday announced a further delay to its new A350 aircraft as it reported second-quarter earnings that almost quadrupled from a year ago.
Net profit at the Leiden, Netherlands-based European Aeronautic Defence & Space Company was $567 million, up from $147 million in the same period a year ago. Sales rose 12 percent $15.7 billion.
However, the aerospace company also revealed that the entry into service of Airbus's new A350, which is meant to compete with rival Boeing's 787 Dreamliner, will be delayed by several months, until the second half of 2014.
The delay to the A350, which stems from problems in building the composite wings, means service entry will slip to the second half of 2014. Drilling that was due to be automated is still being done by hand and the program is “challenging,” EADS said, with further delays likely to prompt more charges.
“We are not meeting the expectations or plans we had,” Tom Enders, incoming EADS CEO said. “Can I be absolutely confident that we will not have further delays? Absolutely not.”
Assembly of the first A350 to fly will start in October, with the plane taking to the air in June or July next year.
Airbus has taken a $152.7 million charge as a result, and warned that further delays would lead to greater charges.
Enders, promoted from Airbus in June, said the company's order book is now at a record $679.5 billion. He vowed to ''globalize'' EADS, citing an assembly line for the A350 in the U.S. as an example.
''One important step into this direction is our decision to build a final assembly Line for Airbus aircraft in the U.S.," he said. Earlier this month EADS said it would spend $600 million over five years to build an assembly line for its A320 single-aisle jet in Mobile, Alabama — its first factory in the United States.
Based on the company's first-half performance, Enders raised sales targets to a 10 percent increase in 2012 from the 6 percent EADS forecast after first quarter earnings.
Shares jumped 6.2 percent in early trading in Paris, where EADS has its primary listing.
Enders also stuck to 2012 targets for sales of 30 Airbus A380s, the world's largest passenger aircraft, but said the company would probably sell somewhat less than that in 2013. Airbus is in the process of fixing a problem with planes already in service it says is not an immediate safety concern: small fractures found near some rivets on some planes at the spot where wings' metal covers, or skins, are joined with the wings' ribs.
Airbus is fixing the problem on affected planes, which it says is not a design flaw but a construction flaw that arose during the building of the first A380s made. It will begin building planes differently in 2014 to avoid the problem.
Analysts believe some clients are pushing back their orders to get new planes, rather than working with retrofitted planes.
Enders says the company still forecasts sales of 35-39 A380s annually by 2015, the level needed for profitability.
Net profit at the Leiden, Netherlands-based European Aeronautic Defence & Space Company was $567 million, up from $147 million in the same period a year ago. Sales rose 12 percent $15.7 billion.
However, the aerospace company also revealed that the entry into service of Airbus's new A350, which is meant to compete with rival Boeing's 787 Dreamliner, will be delayed by several months, until the second half of 2014.
The delay to the A350, which stems from problems in building the composite wings, means service entry will slip to the second half of 2014. Drilling that was due to be automated is still being done by hand and the program is “challenging,” EADS said, with further delays likely to prompt more charges.
“We are not meeting the expectations or plans we had,” Tom Enders, incoming EADS CEO said. “Can I be absolutely confident that we will not have further delays? Absolutely not.”
Assembly of the first A350 to fly will start in October, with the plane taking to the air in June or July next year.
Airbus has taken a $152.7 million charge as a result, and warned that further delays would lead to greater charges.
Enders, promoted from Airbus in June, said the company's order book is now at a record $679.5 billion. He vowed to ''globalize'' EADS, citing an assembly line for the A350 in the U.S. as an example.
''One important step into this direction is our decision to build a final assembly Line for Airbus aircraft in the U.S.," he said. Earlier this month EADS said it would spend $600 million over five years to build an assembly line for its A320 single-aisle jet in Mobile, Alabama — its first factory in the United States.
Based on the company's first-half performance, Enders raised sales targets to a 10 percent increase in 2012 from the 6 percent EADS forecast after first quarter earnings.
Shares jumped 6.2 percent in early trading in Paris, where EADS has its primary listing.
Enders also stuck to 2012 targets for sales of 30 Airbus A380s, the world's largest passenger aircraft, but said the company would probably sell somewhat less than that in 2013. Airbus is in the process of fixing a problem with planes already in service it says is not an immediate safety concern: small fractures found near some rivets on some planes at the spot where wings' metal covers, or skins, are joined with the wings' ribs.
Airbus is fixing the problem on affected planes, which it says is not a design flaw but a construction flaw that arose during the building of the first A380s made. It will begin building planes differently in 2014 to avoid the problem.
Analysts believe some clients are pushing back their orders to get new planes, rather than working with retrofitted planes.
Enders says the company still forecasts sales of 35-39 A380s annually by 2015, the level needed for profitability.
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