Airbus Talks On Site Sales May End, A380 Delays - Report

May 4, 2008

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Airbus may run into problems selling some of its factory sites, and could be forced to further delay some deliveries on its A380 superjumbo, according to German media reports.

The divestment of French plants in Meaulte and St Nazaire Ville to aerospace firm Latecoere may be terminated as financing the deal could be difficult in current market conditions, German daily Die Welt reported on Saturday, quoting Airbus Chief Operating Officer Fabrice Bregier.

"The economic environment combined with tension in the financial markets and the alarming decline of the dollar compared to the euro exist for Latecoere too," it quoted Bregier as saying.

A decision will be taken in May, Bregier added.

A spokeswoman at Airbus declined to comment.

Latecoere is in exclusive negotiations to buy control of two Airbus factories at Meaulte in northern France and and Saint-Nazaire in western France.

The divestment process is a key plank of Airbus's "Power 8" restructuring plan aimed at cutting costs in the wake of damaging delays to its aircraft production timetable, and in the face of a strong euro.

But the plans are opposed by unions and caused political fireworks in France and Germany last year, while the relentless rise of the euro against the dollar has led Latecoere, which makes doors for Airbus and Boeing, to move its own production out of the euro zone.

Die Welt and German business magazine WirtschaftsWoche also said Airbus may have to further delay deliveries of its A380 superjumbo, the world's largest airliner.

WirtschaftsWoche said, citing an insider, Airbus would not be able to meet its target of delivering 25 planes in 2009 due to mounting production problems, and that the company had already informed customers of the delay in a letter.

Asked for a reaction, the spokeswoman at Airbus cited comments Chief Executive Tom Enders made on Tuesday in the United Arab Emirates on the A380 superjumbo's delivery targets.

"Tom Enders has asked for a complete review of the A380 program, knowing he's always said it would be an enormous challenge to manage the (production) ramp-up... This review is not over so I cannot comment on these figures," she said.

On Tuesday, Enders said he remained confident of meeting delivery targets -- for 13 double-decker passenger planes in 2008 and 25 in 2009 -- but called this a "difficult subject."

Airbus has not ruled out fine-tuning the A380 delivery timetable, which has already slipped three times.

Deliveries of the A380 have fallen almost two years behind schedule after a series of industrial problems since 2005.

The A380 went into service last year with Singapore Airlines but is heavily bankrolled by Dubai-based airline Emirates, which ordered 58 of the USD$300 million planes in a historic civil aviation order worth over USD$17 billion.