vagabond

From Associated Press, February 8, 2007

(Italics are mine).

Aboard an Airbus A380 -- So this is what all the trouble was about.

Airbus' A380 -- the world's largest passenger plane -- has had a two-year production delay. But a trip on the first flight open to the media demonstrated why all but one customer, a cargo carrier, think the superjumbo is worth the wait.

The interior is roomy, and economy seats leave ample elbowroom in the 540-seat demonstration cabin fitted by Airbus.

Airlines Qantas, Emirates and Singapore Airlines plan to go further, fitting the plane with fewer than 500 seats to give each passenger more space. Other airlines are expected to follow their lead, said John Leahy, chief operating officer of Airbus' customers division.

"It's a game-changing airplane," said Leahy, the European aircraft maker's top salesman, shortly before boarding the flight with about 200 reporters at Airbus' headquarters in Toulouse, France. "The only minor problem is that we couldn't build it on time."

Announcing the latest production setback, Airbus parent European Aeronautic Defense and Space Co. said last year that the accumulated two-year delay would wipe $6.2 billion off profit by 2010. Last month the Franco-German defense group warned that the final bill would be higher, without giving a figure.

FedEx canceled its order for 10 of the superjumbo freighter and ordered planes from The Boeing Co. instead, but Singapore Airlines ordered more A380s -- and Airbus said it expects to sell at least 20 more in 2007 and more than 800 over the next 20 years.

Airbus has orders for 166 A380s from 15 customers, including Singapore Airlines Ltd., Emirates, Air France-KLM Group, China Southern, Deutsche Lufthansa AG and Qantas Airways. The A380 has cost Airbus and parent EADS about $19 billion so far, including development and additional costs associated with delays.

The drain on resources has also set Airbus back in the more lucrative market for midsized jets, where Boeing's long-range, fuel-efficient 787 has been a runaway success. Airbus launched its response, the A350 XWB, just three months ago for 2013 entry into service -- five years after its main rival. Leahy repeated his target for selling 200 A350 XWB planes by year-end, a target first announced Jan. 17.

Several airlines in India are looking at the A380, Leahy said. "We're talking to Air India, we're talking to Jet Airways." The company also is talking to an existing A380 customer, Kingfisher Airlines, he said.

Leahy predicted the need for 1,600 very large planes over 20 years and said Airbus expected to win "over half" of the orders, with the others going to Boeing, which has on offer the 747-8, seating 450.

"We have a lot of interest in the aircraft, despite all the problems we had last year," Leahy said.

Airbus is still negotiating compensation with airlines whose deliveries are delayed, and some -- including FedEx rival UPS -- have said cancellations have not been ruled out. Nevertheless, Leahy sounded more confident than ever that none of the remaining 15 customers will defect.

Leahy was tight-lipped about the custom features planned by airlines but suggested that some of the wilder predictions -- which have included onboard casinos, beauty salons and even hot tubs -- were wide of the mark.

There is "a little bit of hype," he said. "The reality will be lounges, the reality will be duty-free shops where you can generate some extra revenue." One carrier has installed a shower in first class, Leahy added, declining to identify the airline.

The superjumbo used for Wednesday's flight boasted a bar on each of the decks -- linked by two large staircases, making it easy to roam around. It also had a medical area in the rear, with a pull-out stretcher and privacy partition. The aircraft is the seventh A380 under construction and will be delivered to Etihad Airways in 2009.

The plane wasn't equipped yet with a passenger entertainment system. Airbus has cited the complexity of installing the wiring for those systems as a key reason for construction delays and disruptions.

Noise was noticeably subdued, even during takeoff at full thrust, when the engine roar outside could have passed for a neighbor mowing the grass half a block away.

The Rolls Royce Trent 900 engines are the quietest now available, and, thanks to a wingspan 24 percent longer than the 747s, they are farther than usual from the cabin -- where advances in soundproofing and air conditioning technologies also contribute to the sense of calm.

The superjumbo may turn heads, but whether it can turn a profit remains to be seen.

Harald Liberge of CM-CIC Securities is skeptical about the 420-plane break-even point previously projected by Airbus -- particularly in light of the compensation talks still under way over much of the current A380 order book. Mario Heinen, head of the A380 program, declined to give a revised program cost or confirm the break-even figure.

The A380 may be an "engineer-driven" program that "will not make a penny for the next 10 years," Liberge said -- but that does not mean it will not be a commercial success for decades after that.

"Like the 747, it should be operating for the next 40 years," Liberge said. "The demand is definitely there -- this isn't another Concorde."