Airbus to Unveil New A350 Plane Design | Business| Economy and finance news from a German perspective | DW | 17.07.2006
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Airbus to Unveil New A350 Plane Design

Admitting that the cost of developing its troubled A350 will more than double, European group Airbus will on Monday disclose new design plans for the plane at an air show near London.

Airbus has had a turbulent time with the A350

Airbus has had a turbulent time with the A350

Airbus will unveil new plans for the A350, which it launched in 2005 as a direct rival to Boeing's 787 Dreamliner but which has been poorly received by potential customers, at the Farnborough near London on Monday.

An EADS spokesman said that the plane's industrial launch, or the start of A350 production, could be expected in the "next months."

Meanwhile, the cost of developing the mid-sized jet could more than double to about $10.0 billion (7.9 billion euros), Thomas Enders, co-chief executive of Airbus' parent company EADS (European Aeronautics Defence and Space Company), said Sunday, confirming recent media reports. The original cost had been put at an estimated $4 billion.

Enders was speaking during a weekend seminar held by EADS in Bath, southwest England, ahead of the week-long Farnborough Airshow.

German boss admits errors go back years

Earlier, in an interview with a German newspaper Enders also admitted that errors in the construction of the Airbus A380 super jumbo passenger jet go back several years.

Airbus Fertigung in Hamburg

Enders said there were problems with the A380 production in Hamburg

"We made errors in the construction of the A380, we need more time (for work) on the electrical system," Enders told the daily Bild on Saturday. "The errors were made several years ago."

The German co-chief of EADS, the parent company of Toulouse-based Airbus, said the problem with the A380 was mainly at the Hamburg factory where the passenger cabin's electrical system is installed.

But he added that the Hamburg facility "is only one part of the production chain" and that he did not want to blame any particular person.

The shock announcement last month of delivery delays for the 555-seat A380 sparked a leadership crisis at EADS, which resulted in the departure of Enders' former co-chairman Noel Forgeard, who has been replaced by Frenchman Louis Gallois.

Enders said in 2007 Airbus would deliver nine A380s, the world's largest commercial airliner, but he could not promise that there would not be new delays in delivery "even with the best will in the world."

Bildgalerie ILA in Berlin 2006 Airbus A380

The A380, the world's largest commercial airliner, at an air show in Berlin

"We have a problem finding enough qualified personnel, and we have more than 2,000 planes on order for the next few years," he said.

Building trust

Gallois acknowledged that EADS needed to rebuild trust after its recent management crisis caused by delays to the Airbus A380 super jumbo.

"Disclosure and trust is clear, it is our mandate. We have clearly to rebuild trust and confidence from our shareholders," Gallois said in Farnborough.

Gallois replaced Frenchman Noel Forgeard. The latter had been under intense pressure to quit since it was revealed he sold EADS shares worth millions of euros nearly three months before the group had on June 13 announced delays to the A380.

The wide-body A350, which in its current design can carry between 250 and 300 passengers, is being overhauled to make it bigger and more fuel efficient.

Some analysts believe it will re-emerge as the A370 and could see an enlarged fuselage. US aircraft giant Boeing is winning the race in the long-haul market with the 787, which is being marketed to airlines as a fuel efficient, medium-sized jet.

Meanwhile Streiff, who is French, was named head of Airbus earlier this month. He replaced the German Gustav Humbert, who resigned after Airbus announced it had run into manufacturing problems with its A380 super jumbo jet that would delay deliveries of the world's largest passenger aircraft.

News of the delays saw 5.5 billion euros briefly wiped off the market value of EADS, which owns 80 percent of Airbus.

Restoring EADS' image

EADS' finances are set to take a further financial hit in the coming months owing to the increased spending on the A350 and penalties it must pay customers for delayed deliveries of the A380, which is set to enter service in 2007.

Modell Airbus A380 Bilanz EADS

EADS is facing bad news on the financial front

The company could be forced soon also to pay 2.75 billion euros for the 20 percent of Airbus it does not own.

BAE Systems has served EADS with a formal notice permitting the British group to exercise an option to sell EADS its 20-percent stake in Airbus.

Enders told journalists in Bath that the management crisis was over. But he added: "Undoubtedly the reputation of this company has suffered, so has the confidence of customers and investors. The project that triggered this crisis, the A380, needs to be fixed."

Following the A380 debacle, Gallois told journalists that his first task was to help restore the reputation of EADS "to the highest standard."

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