Friday, September 22, 2006
Here is an airplane, the A380, that is intended to carry 555 passengers a hefty 7,000 miles. It is a huge plane, perhaps a third bigger than a Boeing 747. It has been an engineering marvel up to now, and the world has been full of praise for French, German, and English main contractors. But something went wrong, drastically wrong, with the last steps of certifying the plane, beginning full scale production, and servicing the world. Delays and management changes on top of changes have plagued the Airbus consortium, with ever mounting costs and non-delivery penalties.
There has been little of substance in the press about the exact reasons for the significant delays. If there is an engineering problem, it is being close-held to preserve the Airbus image as being a superlative engineering company, and the A380 image as being a safe airplane to fly. Many of the airports the A380 is expected to use have had to make heavy investments in larger docking facilities, concrete aprons, and people plus baggage handling facilities, for a plane that won't come on line within its planned timeframe. Airbus will have to compensate many of these airports for their losses.
The entire program is threatening to unravel as the major first-user who ordered 43 of the monsters, Dubai , is rethinking its order. This unravelling will not happen, however, because there is too much EU pride at stake. EU Government funds will be shelled out to save the situation, at the EU taxpayer's cost. I believe we are talking several billions of Euros to bail out Airbus from this A380 debacle, plus its other failure plane, the A350, which has been sent back to the drawing board for lack of sales in competition with the forthcoming Boeing 787 Dreamliner.
The engineering and management misfortunes of Airbus will favor Boeing sales over the next several years, and if Boeing can make its supersized 747 an attractive alternative to the A380, it will further depress the European company.
For the moment, the future looks dark for Airbus.