Tough times in Toulouse
Published 9:00 pm Thursday, March 30, 2006
Emirates, you may have heard, has pushed back its plans to take 20 A340s from Airbus. http://www.forbes.com/finance/feeds/afx/2006/03/31/afx2637628.html
Key Quote, from the AFX report: “Emirates wants to wait for an updated model of the jet to appear before going through with the order, said (Airbus), which called the delay a ‘slippage in the order book.’”
Bloomberg News on Thursday had a more-detailed story on the decision, which was forwarded by my favorite Bloomberg reporter, former Herald colleague Susanna Ray.
Key Quote: “Emirates President Tim Clark ‘deferred the order until the manufacturer comes back with clearer plans about an enhanced version of the plane,’ said an Emirates spokeswoman who declined to be cited by name.”
Airbus tried to put a brave face on it: “‘If for sure Emirates doesn’t want to take the aircraft in a certain time frame, we will sell the aircraft somewhere else,’ Airbus Chief Executive Officer Gustav Humbert said … ’ We see that the A340 was not a best-seller in 2005 but one year doesn’t make a trend.’”
Analysts beg to differ:
“‘They’re in deep trouble,’ said Paul Nisbet, an analyst at JSA Research in Newport, Rhode Island, who has a ‘buy’ rating on Boeing stock. ‘Their widebodies are not competing well with the Boeing widebodies.’”
Today, BizWeek http://www.businessweek.com/globalbiz/content/mar2006/gb20060330_075258.htm takes a look at what had to have been a bad week in Toulouse, what with the Emirates delay and Steve Udvar-Hazy’s public flogging of the A350 (which you read here first).
Key Quote: “While redesigning the A350 might attract more customers, it would cause big headaches for Airbus. It would delay the launch of the plane, now scheduled to enter service in 2010 … Moreover, it’s unclear how Airbus would finance R&D for a more-expensive A350 without loans from European governments … analysts say Airbus can’t afford to finance a $10 billion project out of current cash flow. … Emirates’s decision to delay taking delivery of 20 A340s will add to the financial pressure, since most of an airplane’s purchase price is paid at the time of delivery.”
