Will Allow Planemaker To "Regain Its Competitive Edge"

It's official. Confirming reports and rumors floating around the past several days regarding yet another delay to Airbus's A380 program, on Tuesday the European planemaker issued a forthcoming -- and one might say, contrite -- release stating the first customer delivery will occur in October 2007 -- 10 months later than previously reported, and 22 months later than the manufacturer's original estimates when the program began.

Airbus reports 13 more planes will be delivered in 2008, and 25 in 2009. The industrial ramp-up will be completed in 2010, when 45 A380s are slated to be delivered. Airbus said it has notified all A380 customers about the further delay in the delivery schedule.

"Fully aware of the impact this has on their development plans, Airbus is in close contact with its customers and is doing its utmost to find ways and means to alleviate the burden this represents for them," the manufacturer stated.

"In June, the amount of work to be done to finalise the installation of the electrical harnesses into the forward and rear section of the fuselage had been underestimated," the planemaker continued. "Beyond the complexity of the cable installation, the root cause of the problem is the fact that the 3D Digital Mock up, which facilitates the design of the electrical harnesses installation, was implemented late and that the people working on it were in their learning curve."

Airbus hinted at the strong measures taken under new Airbus President and CEO Christian Streiff, to make sure a problem of this magnitude does not happen again. Those steps include management changes, increasing commonality of tools on all sites, and the creation of multinational teams to better use the best skills available.

"Simultaneously, training is being organised to swiftly bring the employees using those tools to the optimum level. With the right tools, the right people, the right training and the right oversight and management being put in place, the issue is now addressed at its root, although it will take time until these measures bear fruit," said Airbus.

Power8 Program

Airbus also announced the launch of a program to, in the planemaker's words, "regain its competitive edge and to counter the financial impact of the delay as well as the weakening dollar" -- dubbed the Power8 program. The objective of the program is to reduce costs, save cash and develop new products faster.

Under Power8, Airbus says development cycle times are to be reduced by two years, while the overall productivity is to be increased by 20 percent. The program aims for annual cost savings of at least 2 billion euros from 2010 onwards, and delivering some 5.0 billion euros in cumulative cash savings by 2010.

While it may be too late for such a program to benefit the A380, the restructuring plan may aid in speeding development of the A350XWB -- the redesigned version of the original A350 announced in July. Currently, the first planes in that family are due to start deliveries in 2012 -- four years after its competitor, the Boeing 787, is expected to take to the skies.

Airbus states it will deliver around 430 aircraft this year, the highest total ever -- with a plan to deliver even more next year. It currently has an order-book of some 2,100 aircraft, filling the production lines for the next 4.5 years.

"The measures here-above should allow Airbus to even better satisfy its customers and be even more competitive," said the planemaker.

FMI: www.airbus.com