Big Plane, Big Problems
FedEx has just canceled orders for 10 Airbus A-380 aircraft due to delays in delivery. If this is the start of a trend, the company may well be in even worse shape than it already is in a very short time.
The world's largest express transportation company cited Airbus' production delays and said in a statement that its FedEx Express unit has ordered 15 Boeing Co. 777 freighters with a list price of $3.5 billion and taken options on an additional 15.
"The availability and delivery timing of this aircraft, coupled with its attractive payload range and economics, make this choice the best decision for FedEx," said FedEx Chairman and CEO Frederick W. Smith.
Boeing's stock rose more than 3 percent on the news while shares of Airbus parent European Aeronautic Defense & Space Co. slumped in European trading.
Airbus regrets the decision by FedEx, company spokeswoman Barbara Kracht said, "but we understand their need to urgently address their capacity growth."
The European plane maker recently doubled its estimate of production delays for the A380 jet to two years. To streamline production, Airbus announced Monday that it will slash the number of suppliers it uses from 3,000 to 500.
Very bad news for the Airbus folks. Other customers are starting to sound as if they are exploring other options.
By dp, Tuesday, 7 November , 2006 @ 1:12 pm
EU is now creatinga military and the Airbus is the transport.
By ajacksonian, Tuesday, 7 November , 2006 @ 5:02 pm
Seems that Airbus is having some wiring problems, delaying their actually building the A380, as witness their delay to fulfill their Qantas order, and Singapore Airlines has been in line since last year and is still waiting: http://news.bbc.co.uk/1/hi/business/6096390.stm
And they had already announced a 6-7 month delay earlier this year: http://www.aviationnow.com/avnow/news/channel_awst_story.jsp?id=news/aw061906p2.xml
When you have to cut expected deliveries of aircraft per year from 25 to 9, as they announced for next year, due to financial difficulties, then you know a company has a problem. And they have a huge pile of delivery orders for tens of aircraft sitting on their desk with customers expecting a delviery schedule to be *kept*.
If the EU is counting on an A380 variant for military transport, then they do have a problem if they want *any* before 2010… hopefully they will have chosen a *smaller* airframe… and if that is the case then there should be zero impact to the A380 delivery schedule. As it is the difficulties they are having will slow A380 shipments to a trickle until at least 2009.