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10/4/06

FT.com: Airbus in a tailspin


For the complete report in the FT.com click on this link

Airbus in a tailspin

Airbus, the icon of European industrial co-operation, risks being toppled off its pedestal by the mess it is making of its A380 superjumbo project. This week it announced a further delay in deliveries, leading large airlines to consider cancelling their orders. It also raised its estimated cost overrun on the A380 to nearly €5bn, sending shares in EADS, the Franco-German parent company, tumbling yesterday. This is the worst crisis to hit Airbus during the 36 years in which it has slowly evolved from an unwieldy multinational joint venture into something approaching a normal corporate structure. Only by accelerating that evolution, and probably by learning some lessons from its US rival, Boeing, can Airbus pull out of this dive. Some excuse for Airbus can be made out of the fact that the A380 will be the largest passenger aircraft ever built, with a complexity requiring 500km of wiring, and that such leading edge projects often run into trouble. Boeing hit development and delivery problems in the the late 1960s with its 747 jumbo that went on to be a best-seller. Comment EU-Digest: Airbus can only get better following its reorganization plans.

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