A380 - Introduction

Topics: Airbus A380, Boeing 747, Singapore Airlines Pages: 6 (2211 words) Published: March 17, 2011
When talking about the new Airbus A380, one would think it is easy to write about it, since it has been all over the news for the past 2 years. However there were never any concrete consequences mentioned, except the ones for Airbus. Neither financial statements nor any other kind of literature were available. Even the attempt to get an interview with Lufthansa failed. So what seemed to be easy in the beginning became harder to write about in the end, due to the missing literature. That is why most of my sources are based on the internet. Nevertheless, the media wouldn’t even make such a fuss about it, if it wasn’t the biggest airplane in the world. For the first time in aviation history, Airbus was trying to replace Boeing in the civilian aircraft construction. They wanted to become number one by building the biggest and most luxurious aircraft in the world, which is why the delays became so significant. In my essay I will analyse the impacts on some industrial factors due to the delayed delivery of the A380. 2.Reasons and Consequences of the delays

2.1First delay
The first delay of Airbus’s A380 was announced in June 2005, when Airbus confirmed that the delivery would be six months later than promised. An Airbus presenter told the BBC that the hold-up was because of several reasons, saying, "In most airline programmes of this size - including those of our competitors - things can run a little later than originally planned. The plane is continuing to perform well in tests." Other industry sources, however, claimed that the original model was too heavy and therefore wasn’t able to overcome the distance promised.

2.2Second delay
Airbus announced another delay on June 13, 2006, with an additional setback of six to seven months on the delivery schedule. Reasons given for this postponement were, according to an Airbus statement, the installation of electrical systems and resulting harnesses. For these reasons, the EADS, owning 80 percent of Airbus, said that the deliveries in 2007 would drop from an original target of 20 to 27 aircrafts to only 9, and deliveries by the end of 2009 would make an additional loss of 70–80 aircrafts. The proclamation of this news caused a 26% drop in the share price of EADS and a possible cancellation of orders. Customers like Emirates and Qantas were angered by the delays and Singapore Airlines said they might even seek penalty compensation for the wait.2 2.3Third delay

The third setback, which was publicized on October 3, 2006, had some even greater consequences to Airbus than expected at first. Not only that the airlines of the passenger version of the A380 were more disappointed about this further delay, FedEx and UPS even cancelled their orders of the freighter’s version in favour of 15 Boeing 777. This additional delay was to some extent still due to the wiring problems, which have, according to an Airbus statement, taken more work than expected. Since there was no other opponent on the market able to catch up with the capacity of the A380 and thanks to the incentives offered, the airlines themselves didn’t cancel their requests. However, in order to raise the productivity and avoid any further hold-ups, Airbus decided to initiate a restructuring and cost cutting program. 3.How are the airlines affected by the setback?

In general, one could say that, due to the delayed delivery of the A380, airlines have to find a way of compensating their losses. A major reason why airlines ordered the A380 was the low mileage of only 3.4 l per passenger and km , which has unfortunately now become irrelevant, since the planes will not be there on time. Also the ground-handling, personnel and landing charges will now cause twice as many costs, since airlines need to offer more flights to one destination if they want to survive on the market. For Lufthansa, this means that since they wanted to get into the Asian market to compete against Singapore Airlines, they cannot offer...
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