Emirates Slams Airbus on A380 Defects

[Naim 6]

Europe March 17, 2009, 10:42AM EST

 

Emirates Slams Airbus on A380 Defects

 

A damning report from its biggest buyer faults the superjumbo for an array of problems—yet another blow for the troubled European plane

 

By Dinah Deckstein

 

Executives who are able to produce halfway decent business figures have become a rarity in the current financial crisis. Thus it comes as no surprise that Louis Gallois, 65, visibly enjoyed his appearance at a press conference held in an aircraft hangar belonging to an aviation museum near Munich on Tuesday of last week.

 

Gallois, who is CEO of the European aerospace and defense giant EADS (EAD.PA), was clearly in high spirits as he reported on the group's successes from the previous year. Sales rose by 11 percent and profits increased to about €1.6 billion ($2.1 billion). EADS even exceeded its internal cost-cutting targets.

 

But Gallois became significantly more subdued when he was asked about the coming months. He said that he had no idea how many—if any—aircraft orders will be cancelled by customers in the near future.

 

The A400M, a military transport plane which has been delayed for more than four years, also apparently poses a considerable potential threat to Airbus and its parent company, EADS. Gallois conceded that if the buyer countries pulled out of the prestigious project, the group would have to repay close to €6 billion ($7.8 billion) to their governments. This would put an enormous dent in EADS's ample financial cushion of around €9 billion ($11.7 billion).

 

There is another, even more pressing problem, one that the head of EADS preferred not to even mention. And yet it has triggered consternation at its most important subsidiary, Airbus.

 

In mid-February, senior executives from Airbus and the airline Emirates, the biggest customer for Airbus's A380, attended a crisis meeting in Toulouse to discuss the super-jumbo. Last summer, after a roughly two-year delay, the Arab airline took delivery on the first of 58 A380s it had ordered. The airline currently operates four jets in this series. Nine others are in use at Singapore Airlines (SIAL.SI) and the Australian airline Qantas (QAN.AX).

 

The Airbus executives could not have liked what they were told and shown by the Emirates representatives. In a 46-slide presentation, the aviation experts painstakingly listed what they viewed as the giant jet's serious growing pains. To illustrate their points, they included snapshots of singed power cables, partially torn-off sections of paneling and defective parts of thrust nozzles in the engines as evidence of what they described as a shoddy work ethic at Airbus and its suppliers.

 

The confidential manufacturer's information has since been leaked to employees, triggering a mood of panic. "Many good people have resigned and are trying to move to other projects," reports a concerned insider.

 

Airbus is doing its best to calm the waves. "We take our customer Emirates' criticism very seriously and are doing everything in our power to correct any reports of deficiencies as quickly as possible," says an Airbus spokesman. He also confirms a "number of individual incidents that have impaired the operation but not the safety of the aircraft."

 

Crisis meeting? Cable problems? These words are reminiscent of a humiliating chapter in the company's more recent history, one that Airbus managers and their CEO, Tom Enders, would rather see stricken from the annals of the company. Because of production problems and labor disputes in recent years, the mega-plane, celebrated by experts and aviation fans alike, has been the cause of vast amounts of additional work and a significant loss for its producers in the past few years. Some senior executives are even suspected of having lined their pockets through stock deals and of having concealed the true extent of the A380 debacle from outside shareholders for far too long.

 

Through a massive effort, the group did manage to deliver 12 of its flagship jets last year. It expects to build another 18 this year and hand them over to customers.

 

The problems seemed to have been corrected, and the company recently began a gradual shift from the costly and time-consuming manual assembly of the A380 to the long-planned commercial series production.

 

Airbus seemed to have cleaned up its act, only to be confronted by the incendiary information from the Middle East. The list of defects was long on clear language and short on diplomatic niceties.

 

'Loss of Confidence'

 

On one of the slides, the experts provide a detailed list of the prestigious plane's various breakdowns. They say that the A380 has already been grounded nine times, which represented a loss of close to 500 operating hours. In 23 cases, say the Emirates managers, replacement aircraft had to be obtained at short notice. Minor glitches, the critique continues, happen in Emirates' A380 fleet about once every two days. In the medium term, the Emirates experts write, the airline could face the "threat of a loss of confidence in the aircraft and the brand image of the Emirates A380."

 

The Airbus managers want to make sure that this doesn't happen. They have sold only about 200 of their flagship jets to date. According to industry estimates, Airbus will have to sell about twice as many A380s to recoup its costs.

 

Enders and his staff are now doing everything possible to placate angry customers. Each individual problem report is analyzed and simulated. "Defects are traced back to their origin and corrected," explains an Airbus spokesman. "We have already made great progress in this respect in recent weeks."

 

Both Airbus and Emirates have reacted to this story since it was released on Saturday ahead of publication in Monday's edition of Der Spiegel. Airbus said Sunday it was taking Emirates' criticism of the A380 "very seriously." "We are doing everything we can to overcome the issues," an Airbus spokeswoman told Reuters. Emirates for its part told the news agency that it has a "good relationship with Airbus" and that it would "continue to work closely with them to address these technical matters." The Emirates spokeswoman said that the airline remained confident in the A380 and had no plans to cancel orders.

 

In addition, the aircraft manufacturer is storing additional replacement parts directly on-site in places where the super-jumbo is now in use, so as to be able to respond more quickly to problems as they arise.

 

Airbus also plans to expand the rapid response team it created specifically to address A380 concerns. It is even considering making some changes to individual components. In private, Airbus executives point out that problems are also encountered with other new aircraft models when they are used in commercial aviation. Some 23,000 individual parts are used in the cabin area alone, managers say, meaning that teething problems cannot be ruled out completely. After all, they say, the reliability of all parts and systems can only be proved once the aircraft is in operation.

 

Whether these and other explanations will convince Emirates remains to be seen. In its damning presentation, the company also sharply criticizes the production processes at Airbus. For example, the Emirates report concludes, the A380 models were not sufficiently tested before being delivered to customers.

 

Experts, on the other hand, note that no other jet has ever been as thoroughly tested as the giant Airbus. Nevertheless, they say, not all conceivable scenarios involving every single part could have been simulated in the dry runs.

 

Some of the problems could hardly have been foreseen, such as one involving the plane's shower facilities. So far Emirates is the only A380 customer to provide two showers in first class. A determined female passenger who was unable to operate the showerhead promptly tore out the entire fixture—and flooded the shower room.

 

The Emirates experts believe that Airbus should choose its suppliers more carefully and limit their numbers. They also say that the constant transport of parts and employees among Airbus's locations throughout Europe makes it more difficult to comply with prescribed quality standards. "Our work is well organized and properly inspected," counters an Airbus spokesman. He also points out that A380 production is becoming more and more normalized.

 

It is still not clear how the spat between the aircraft maker and its dissatisfied customer will end. Competitors Singapore Airlines and Qantas have also had to ground their A380 jets several times in recent weeks and months.

 

The Asians have had trouble with the fuel pumps and the on-board electronics. The Australians noticed that the highly sensitive measuring sensors in the tank were not working properly, although it is still unclear whether the problem was attributable to the devices themselves or was caused by impurities in the fuel.

 

Unlike Emirates, Singapore Airlines and Qantas have taken a more relaxed approach to the problems. However they, unlike the Arabs, have not just ordered dozens of new A380s.

 

Since the end of last week, the Dubai-based airline has however tried to defuse the conflict. "Technical problems are to be expected in a new aircraft, especially one in which so many new technologies are used," says an Emirates spokesman.

 

He is also quick to point out that order cancellations are not planned. The A380, he says, is an "outstanding airplane."

 

Translated from the German by Christopher Sultan

 

http://www.businessweek.com/print/globalbi...0317_895512.htm

[Tamizi Hj Tamby 1]

One word: Ambik Kau Airbus! (Take that,Airbus!)

[Simon 3]

Disastrous for Airbus....i think there will be further delays.....

[Yusoff 1]

One word: Ambik Kau Airbus! (Take that,Airbus!)

Ermm.. that would be 3.. Just kidding..

 

I hope they could pull this off and settle everything fast and final. Airbus just need to work harder for the A380. Scrapping it would be equal to digging its own grave. The introduction of B747 too not without flaws, but the less the flaws the better maa..

[Min 6]

i found this and thought someone changed it:

 

"Nine others are in use at Singapore Airlines (SIAL.SI) and the Australian airline Qantas (QAN.AX)"

 

by the way, in my opinion, i reckon all new a/c having this problem. Just because its the biggest commercial airliner, every single bit is a big issues. toughen up lil girl.

Edited March 18, 2009 by Min

[Izhar Z 1]

One word: Ambik Kau Airbus! (Take that,Airbus!)

 

I can assume u're not an Airbus fan?

 

I hope they can figure something out. I kind like Airbus. Dont have technical facts or data to support my statement. I just like them.

[Min 6]

me too, dont mind airbus. not boeing thou..

[Gavin Andrew David 6]

Teething problems , just massively highlighted , this kind of things are bound to happen in a new airliner , and with the world putting it under a microscope , what can you expect , anyone remember all sorts of news about QANTAS some 2 or 3 months back , every small issue being highlighted ? well that is just how the industry is

[Alif A. F. 0]

I can assume u're not an Airbus fan?

 

I hope they can figure something out. I kind like Airbus. Dont have technical facts or data to support my statement. I just like them.

from my experience, the cabin noise level in an Airbus aircraft is quieter than Boeing.

[Tamizi Hj Tamby 1]

I can assume u're not an Airbus fan?

 

I hope they can figure something out. I kind like Airbus. Dont have technical facts or data to support my statement. I just like them.

 

Izhar,

 

I'm only refering to the A380 problem.I'm also a Airbus fan.

[Tony 1]

Teething problems , just massively highlighted , this kind of things are bound to happen in a new airliner , and with the world putting it under a microscope , what can you expect , anyone remember all sorts of news about QANTAS some 2 or 3 months back , every small issue being highlighted ? well that is just how the industry is

Agreed. No offense to anyone, but news reported by mainstream these days are very entertaining!

[Mohd Suhaimi Fariz 2]

Vendor creates problem, the main company suffers...just like... <_>

[Izhar Z 1]

Izhar,

 

I'm only refering to the A380 problem.I'm also a Airbus fan.

 

Owh..... I see.....

But Airbus is making in headlines in the middle east right now, just not the good ones. What with Qatar A346 bashing, and now this EK A380.

But I think I agree that this is a mega project, so no wonder its always under the microscope. Every little problem is newsworthy. Even better when their biggest customer has something not so nice to say.

[Naim 6]

MORE WOES ...

 

===

 

Airbus’s A380 Sales Pitch Frays on Emirates, Lufthansa Delays

 

By Andrea Rothman

 

March 19 (Bloomberg) -- Airbus SAS spent a decade saying the A380, the world’s largest passenger plane, would stand up to a recession because it’s cheaper to run than most other jetliners. The argument is starting to fray.

 

Emirates, the A380’s biggest customer, said yesterday that a drop in traffic between Dubai and New York had rendered the superjumbo unsuitable after seven months on the route. The carrier will instead switch to Boeing Co.’s smaller 777.

 

Airbus spent $18 billion developing the 525-seat A380 to secure its position as the world’s No. 1 planemaker, winning orders worth $65 billion at list price. Boeing responded by creating the 787 Dreamliner, betting that a growing economy would ultimately favor smaller planes serving more routes.

 

“The A380 is so huge that in the current environment it’s really hard to fill,” said Frank Skodzik, an analyst at Commerzbank in Frankfurt with a “reduce” rating on Airbus parent European Aeronautic, Defence & Space Co. “That’s why we’re seeing delays in deliveries.”

 

Emirates, which operates four of the planes, says it may delay some of the 54 still on order. Air France KLM Group, Europe’s biggest airline, has postponed two deliveries, and Germany’s Deutsche Lufthansa AG will take its first two A380s in 2010 instead of this year. Kingfisher Airlines Ltd. of India deferred its first delivery to 2014 from 2012.

 

Hub Airports

 

In marketing the A380, Airbus argued that a very large plane offered unrivalled economies of scale and would make sense in tough times because slumping demand leads airlines to drop flights between secondary cities and focus on flying to larger hub airports, with smaller craft fanning out to minor locations.

 

“What they can do is consolidate flights that aren’t doing so well into the A380, which is bigger and more fuel efficient,” said Rohan Suppiah, an analyst at Kim Eng Securities Pte in Singapore.

 

While that’s generally what has happened, the current slump in travel is so severe that on routes such as Dubai to New York, where high frequencies need to be maintained to lure those business travelers who are still flying, the 150 or so extra seats on an A380 versus the 777, say, are too difficult to fill.

 

Emirates will instead redeploy the two A380s freed up from New York, where the airline flies twice daily, to its services between Dubai and Toronto, which has three flights a week, and Bangkok, a major source of tourist travelers to the sheikdom.

 

“This aircraft redeployment was based solely on a change in capacity demands in these three markets,” Emirates said in its statement yesterday, adding that it will look again at operating the plane to New York if and when demand revives.

 

No Benefit

 

“For the A380 to make sense an airline must have routes with both frequencies and volume,” said Yan Derocles, an analyst at Oddo Securities in Paris. “If you don’t have those two you don’t benefit from the lower unit costs per seat because you can’t actually fill the plane.” He rates EADS “reduce.”

 

Toulouse, France-based Airbus, the world’s biggest planemaker ahead of Chicago-based Boeing, says carriers routinely shift fleets around to adjust to market conditions.

 

“It is a fully normal process in operations to deploy aircraft where the airline sees a best fit, and this is of course continuously optimized throughout the year,” sales chief John Leahy said yesterday by e-mail.

 

Airbus declined to comment on potential changes to delivery schedules for the A380, which is priced at $327 million before discounts, saying talks with customers are confidential.

 

The company handed over 12 of the superjumbos last year and in December cut the target for 2009 by three planes to 18. Emirates, Qantas Airways Ltd. and Singapore Airlines Ltd., the only current operators, are scheduled to get about five A380s apiece, with Air France also due to take its first plane.

 

Best Solution

 

Leahy says the A380 remains the best available solution for those carriers looking to serve airports where traffic rights or landing slots are limited and demand is high. Slot-constrained London Heathrow, the busiest international airport, already receives A380 flights from all three airlines that own the plane.

 

For carriers seeking a new widebody aircraft with fewer seats, Boeing’s Dreamliner is due for first delivery next year after repeated delays. That’s still three years earlier than Airbus’s similar-sized A350, which took longer to come to market because of the European company’s earlier focus on the A380.

 

Airbus forecasts suggest Tokyo will be one of the busiest cities for the A380, and flights operated to the Japanese capital by Singapore Airlines, the model’s first customer, are proving its worth, Kim Eng’s Suppiah said.

 

Still, Jim Eckes, managing director of industry adviser Indoswiss Aviation, says even Asia’s most profitable carrier should rethink its commitment to the superjumbo. Singapore Air Chief Executive Officer Chew Choon Seng said Feb. 16 he aims to reduce capacity 11 percent and cut the fleet for the first time since 2004. He didn’t comment on the 13 remaining A380 orders.

 

“Do they have enough business to fill up such a large plane?” Eckes said. “It’s an expensive aircraft and if there’s any way they can avoid taking delivery they should do it.”

 

To contact the reporter on this story: Andrea Rothman in Paris at aerothman@bloomberg.net

Last Updated: March 18, 2009 20:01 EDT

http://www.bloomberg.com/apps/news?pid=206...&refer=home

[C.Foo 3]

Hi My name is C.Foo I'm new to MW. Please welcome me.

 

I know EK has had problems with 380 filling it up but never mechanical. Ek should have never purchased the plane. Its more like national pride. Example Ek purchased it for pride. What Ek should do is dump the plane. Deposits and money paid use it for the 350 and the 330 or even the 320 or even sell the plane to customers who can't wait. After all EK is one of the most powerful carriers in the world. Just like SQ, BA, LH, AF/KL, QF etc...

Edited March 19, 2009 by C.Foo

[Walter Sim 1]

Welcome C.Foo!

[Imran K. 0]

I know EK has had problems with 380 filling it up but never mechanical. Ek should have never purchased the plane. Its more like national pride. Example Ek purchased it for pride. What Ek should do is dump the plane. Deposits and money paid use it for the 350 and the 330 or even the 320 or even sell the plane to customers who can't wait. After all EK is one of the most powerful carriers in the world. Just like SQ, BA, LH, AF/KL, QF etc...

 

First of all, EK had many justifications as to why they should have purchased the plane, perhaps the QUANTITY they initially signed for was rather epic. However, the current economic crisis is to blame for the fact that its proving much tougher to fill up the A380, as loads on the route were averaging around 75% right up till mid February, when it started to slow down dramatically...

 

The A330? The A320?! :mellow:

 

EK have absolutely NO use for the A320, seeing as they are already able to achieve close to 90% load factors on their regional sectors when deploying widebody aircrafts such as the A330 and 77W's. More A330's are definitely not needed.

 

and...no...EK shouldn't dump the plane. They are definitely capable of weathering out this storm, and trust me, they will do just that.

[C.Foo 3]

320's for more point to point to compete head to head with EY. But EK bought to many 380's. Better should have bought 748's. But that comes in to question also.

 

 

And more of a welcome next time!

 

 

First of all, EK had many justifications as to why they should have purchased the plane, perhaps the QUANTITY they initially signed for was rather epic. However, the current economic crisis is to blame for the fact that its proving much tougher to fill up the A380, as loads on the route were averaging around 75% right up till mid February, when it started to slow down dramatically...

 

The A330? The A320?! :mellow:

 

EK have absolutely NO use for the A320, seeing as they are already able to achieve close to 90% load factors on their regional sectors when deploying widebody aircrafts such as the A330 and 77W's. More A330's are definitely not needed.

 

and...no...EK shouldn't dump the plane. They are definitely capable of weathering out this storm, and trust me, they will do just that.

Edited March 19, 2009 by C.Foo

[Seth K 3]

Welcome C.FOO

 

Emirates bought the A380 is more like for long term plan/demand. Me myself, flew on their A380 twice JFK-DXB vv, witnessed 100% load factor during peak season. After recession, with increasing number of world population, I am sure the demand will be there for those 40~ A380.

[Isaac 0]

After recession, with increasing number of world population, I am sure the demand will be there for those 40~ A380.

True. And this is Emirates after all. Haha ...

 

Welcome C.FOO !!!

 

[S V Choong 4]

Hope my upcoming Airbus A380 flight with Emirates won't be disrupted, thats all!