Airbus reeling after latest A380 delay

PARIS - Shares of Airbus’ parent company plummeted Wednesday after new delays in the delivery of the A380 superjumbo raised questions about the company’s management and strategy.

Emirates Airlines announced it is reconsidering its order of the double-decker A380, the world’s largest passenger aircraft, exacerbating an already delicate situation for European Aeronautic Defense & Space Co., parent company of Airbus.

Singapore Airlines and Qantas Airways, which also have large A380 orders, said they are seeking talks with Airbus and want compensation. Malaysia Airlines also was reviewing the terms of its agreement with Airbus to buy six A380s.

Airbus announced late Tuesday that A380 deliveries could be delayed by up to seven months because of bottlenecks with the plane’s electrical systems. It is the second time production of the A380 has been held up, with Airbus earlier pushing back the delivery date by six months.

Singapore Airlines delivered a second blow to Airbus by announcing it will buy 20 smaller Boeing 787-9 aircraft for about $4.5 billion and take options on another 20 planes. Airbus had hoped the Asian airline would be one of the first and biggest customers for another new model, the A350, that would compete directly with Boeing’s 787. But airline and leasing company dissatisfaction with the design of the A350 has led Airbus to consider a costly redesign of the plane, delaying its launch for several years.

NBC VIDEO Jumbo test May 18: A prototype of the superjumbo Airbus A380 lands at London's Heathrow airport for the first time. msnbc.com

EADS shares were were down almost 27 percent at 18.52 euros ($23.24) in afternoon trading. Market operator Euronext briefly suspended trading in the stock twice in the first hour after it fell beyond the limit allowed.

The Airbus troubles also dragged down BAE Systems PLC, which owns 20 percent of Airbus but has been seeking to sell its stake. BAE shares fell 3.2 percent to 337.75 pence ($6.22) on the London Stock Exchange.

Deliveries of the double-decker A380 likely will be limited to nine in 2007, Airbus said, with an additional shortfall of five to nine A380 deliveries expected in 2008 and “around five” in 2009. The first delivery to Singapore Airlines is still expected by the end of 2006.

“We’re not happy with the delay, but our focus right now is working with Airbus to minimize the delay,” said Singapore Airlines spokesman Stephen Forshaw.

Singapore was the first carrier to buy the $300 million plane, ordering 10 with an option to purchase another 15.

As for compensation, Forshaw said: “This is something we’ll be working on in due course.” He declined to disclose an amount or the time given to Airbus.

Emirates Airlines, which has 45 A380s on order, said it was told that delivery of its initial A380 would be delayed by six months, and it now expects to receive its first one in October 2007, to be put into operation in January 2008.

“We are considering our position and will be engaging with the manufacturer over the next few weeks,” the airline said in a statement.

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