Airbus may end up grounded if superjumbo fails to take off

By Michael Harrison

PARIS - The superlatives abound. It is wider than a football pitch and almost as long, four times the height of a double-decker bus, and weighs 560 tonnes.

The A380 superjumbo is, in other words, large. Obscenely so, some might say, since the list price is an equally extravagant £166 million ($471.5 million) - enough to build a hospital or three.

Its maker, Airbus, is seeking to reassure the world that the biggest airliner ever to grace the skies will be a commercial success when it enters service.

But when exactly will that be? There could be no more pertinent question for Europe's answer to Boeing and, until recently, a shiningly successful example of cross-Channel industrial co-operation.

A year ago, Airbus could do no wrong. It had outsold its American rival for the fifth successive year, and was looking forward to putting more clear blue sky between itself and Boeing.

Twelve months on and Airbus is in a mess. And it's a big one. By now the A380 should have been in commercial service for the best part of a year. Instead, it is running two years late, leading some to describe it as aviation's latest white elephant.

The blame lies with the wiring. Some 500km of cable and 100,000 wires weave through the fuselage, delivering power to the cockpit controls and in-flight entertainment systems. Connecting everything up is proving trickier than thought.

The problem has already blown a superjumbo-sized hole in the profits of the parent company. But further delays could threaten Airbus's very existence, and with it, tens of thousands of jobs and the many billions of pounds sunk into this grand protect by the taxpayers of Britain, France, Germany and Spain.

The plane was supposed to cost US$10 billion ($14.9 billion) to develop - a lot for one aircraft, but a small price to pay, so Airbus and its sponsoring governments thought, for the chance to end Boeing's monopoly of the jumbo market once and for all.

At the last count the development costs of the A380 had risen to US$14 billion.

But the financial pain does not end there. Last month, the company which ultimately controls Airbus, EADS, came out with some figures even more stunning than the vital statistics of an A380. EADS admitted that the delays on the aircraft would cost it an additional US$6 billion in lost profits, meaning that the A380 would not begin to pay its way until some time into the next decade.

Airbus's latest 20-year forecast for the world jet market, to be published this week, will put demand for the A380 at about 1500 aircraft - almost four times the number that Boeing thinks will be sold.

But that continues to look like an optimistic assumption, for everything appears to be conspiring against the A380, not least the value of the dollar, the currency in which all commercial aircraft are sold. When Airbus launched the programme six years ago, it needed to sell 300 aircraft to cover its costs. Because of the way the dollar has weakened, Airbus now needs to sell 420 planes. The order book stands at 149.

The American mail company FedEx has become the first launch customer to cancel its order for 10 freighter versions of the aircraft, and at least one passenger airline has indicated it could follow suit. If the cancellations turn from a trickle to a flood, then the consequences would be catastrophic.

The collapse of the A380 would be disastrous enough in itself. But the added problem for Airbus is that it needs the revenues the superjumbo is expected to generate in order to fund its next aircraft. This is an equally ambitious and expensive model, called the 350XWB (standing for extra wide-bodied). The plane, Airbus's answer to the new Boeing 787 Dreamliner, will cost US$12 billion to build.

Without those A380 sales, however, Airbus will be in a terrible bind. Tim Clark, the president of Emirates, says simply: "Airbus has got to produce a meaningful competitor to Boeing. If they don't, they will be out of business."

The contribution of the United Kingdom taxpayer alone towards the A380 programme is £530 million. In return for that, Broughton in North Wales and Filton near Bristol get to make the wings. But it also means that each completed set of wings has to make a remarkable journey to the final assembly site in France by way of container ship, river barge and specially adapted road trailer. With the main fuselage having to travel from Germany and the tailfin from Spain, no wonder Christian Streiff, the man who was drafted in to head Airbus in July, commented that there must be a simpler way.

Streiff will be hoping President Chirac wasn't right at the launch of the A380 when he said: "This veritable ocean liner of the sky will go down in history like the Concorde."

The French leader could have chosen an aircraft that was still in service.

A380 at a glance

It is 73 metres long.

Its wings span 79m.

It's 24.1m tall.

It will take 555 passengers in three classes.

It can take off loaded up to a maximum weight of 560 tonnes.

The fuel tanks hold 310,000 litres.

It can fly 15,000km without refuelling.


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