A380 buyers face longer take-off

PARIS — Airbus faces the possibility of A380 order cancellations after its parent company confirmed Thursday the flagship superjumbo program will be delayed a third time.

Emirates, the biggest A380 customer so far, said its 45-plane order is now "up in the air."

European Aeronautic Defence and Space (EADS), which owns 80 percent of Airbus, said the 555-seater jet program will fall even further behind schedule than the one-year delay already announced. The company gave no new timetable or cost estimate for the jet, which originally had been planned to enter service this year.

The news pushed EADS shares down 2.4 percent Thursday in Paris.

Customers are still awaiting a revised delivery schedule, according to several of the 14 airlines and leasing companies that have placed 134 orders for the world's biggest passenger jet. Airbus has taken 25 additional orders for the freighter version.

But in a worrying sign for the Toulouse, France plane maker, its biggest A380 customer said its order could now be in doubt.

Asked whether Dubai-based Emirates might cancel its order, worth over $13 billion at list prices, spokeswoman Valerie Tan said: "Things are up in the air right now. It's hard for us to say."

Virgin Atlantic Airways also said the fresh setback could affect its order for six A380s, with a value of $1.75 billion.

"You would expect another delay like this to have an impact on our A380 program, and we will now wait to hear from Airbus on their delivery plans," airline spokeswoman Anna Knowles said.

The production hitch is the latest setback for Airbus and EADS, whose shares plunged 26 percent in one day after the last six-month A380 delay was announced in June.

The crisis led to the sacking of top officials including Airbus boss Gustav Humbert and EADS co-CEO Noël Forgeard.

Airbus has also been losing customers to Boeing in the market for midsize jets. It was forced in July to launch a costly redesign of the planned A350 to compete with Boeing's 777 and the new 787, due to enter service in 2008.

The lack of a near-term superjumbo alternative from Boeing makes it unlikely carriers will cancel their A380 orders en masse, but analysts say any lost orders would be a bad omen for the plane's future.

"If people leave, it's because they see better ways to operate their route networks," said Richard Aboulafia of U.S.-based Teal Group.

Losing Emirates, which accounts for almost one-third of the A380 order book, would be a "heart-attack moment," Aboulafia said. It is the only airline to position the plane at the heart of its strategy.

Even without cancellations, Airbus faces increased production costs as well as compensation claims and contract renegotiation demands from customers, Aboulafia added.

Several airlines already have said they will seek compensation for the A380 delays.

Emirates Chairman Tim Clark said in a statement Thursday that the airline "has taken no position with regard to cancellation" or a possible compensation claim.

"Emirates is concerned primarily with establishing exactly when the aircraft will be delivered," Clark said, adding: "There is no point in any further speculation."

Emirates has reserved 43 superjumbos from Airbus and two more through a leasing company.

EADS, which is doing an audit of A380 manufacturing, said the new delays were caused by "continuing industrialization challenges with the wiring of production aircraft." Wiring problems were also blamed for the second six-month program delay in June.

Airbus CEO Christian Streiff, who has imposed a temporary hiring freeze since taking over from Humbert in July, is to report to shareholders next month on the full extent of the A380 delays, EADS said Thursday.

The audit was originally expected to be finished this month. "The fact that they are a month late with the audit is the worst news we got today," an analyst told Reuters.

Information from Associated Press reporter Jim Krane in Dubai is included in this report.