=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2006/10/03/financial/= f213328D66.DTL --------------------------------------------------------------------- Tuesday, October 3, 2006 (AP) Airbus A380 Delay Could Aid Boeing Sells By ELIZABETH M. GILLESPIE, AP Business Writer (10-03) 21:33 PDT Seattle (AP) -- It's unlikely that many airlines will cancel their orders for Airbus' A380, but the latest delay for the superjumbo could give rival Boeing Co. a boost as it tries to win a launch customer for a larger version of its 747, industry analysts say. Airbus SAS' majority owner, European Aeronautic Defence and Space Co., announced Tuesday that it doesn't expect to deliver its first A380 until the second half of 2007 — delaying the plane by another year, and prompting some airlines to consider canceling orders. "I think this could be the tipping point — not necessarily for tho= se customers that have already ordered the A380, but for those who are about to order some large aircraft," said J.B. Groh, an analyst with investment firm D.A. Davidson & Co. After a series of delays, the A380 is now two years behind its original schedule. Airbus CEO Christian Streiff said the latest snag was caused by problems with installing some 300 miles of wiring on each plane. Despite any frustration over the delays, some analysts said A380 custome= rs have good reason to stick with their orders, because the cost of those planes drops with every concession and fine Airbus is forced to pay. "By the time the airlines get through extracting all the penalties and concessions out of Airbus for all of the delays ... they're going to have the cheapest damn widebody in the world. They'd be crazy to let that deal get away from them," said Scott Hamilton, a Seattle-area aviation industry analyst. John Walsh, president of the consulting firm Walsh Aviation, also noted that some airlines have committed to flying the A380 into airports that have spent a lot of money building gates and lounges and configuring runways and taxiways to fit the enormous plane. It's been almost a year since Boeing announced it would begin offering customers a stretch version of the four-engine 747. To date, the company has won 30 orders for the cargo version of the 747-8 but no major orders for the passenger version — only one for a single plane from a customer that asked not to be identified. Boeing is designing the 747-8 to seat about 450 passengers, but the plane could be configured to hold as many as 500 people. The A380 will carry 555 passengers in a standard three-class configuration. One of Boeing's advantages in the battle for jumbo jet customers is that the 747-8 is a derivative of a plane it's been building for four decades, Hamilton said, which means it could have an easier time than Airbus convincing customers it can deliver on its promises. Nevertheless, airlines couldn't get any new 747 passenger planes until after late 2009, when Boeing is scheduled to deliver its first cargo 747-8s, said Tim Bader, spokesman for Boeing's 747 program. "Airbus at least has the benefit that Boeing doesn't have a competitive product that can be a substitute for the A380 in the next two years," Hamilton said. Some analysts suggested the A380 delays might give Boeing a freer hand to offer discounts on the 747-8, while others said Boeing is more likely to hold its ground on price, since it knows airlines will have to wait for the A380. Richard Aboulafia, an analyst with the aviation consulting firm Teal Group, said the biggest potential benefit for Boeing is that problems with the A380 program could slow development of the mid-sized A350. "I think the real market change is just pushing off the prospects of a n= ew 777 and 787 competitor," Aboulafia said. "That's where the action is." Boeing spokesman Peter Conte declined to comment on the A380 delay or how Boeing's sales team is responding. "We continue to pursue opportunities across our entire product line, but we simply do not discuss particular sales campaigns," Conte said from the Seattle-based headquarters of Boeing's commercial airplanes unit. The A380 will overtake Boeing's 747 as the world's largest passenger jet when it enters service. So far, the A380 has won 134 orders from 14 airlines and leasing companies, plus 25 for its freighter version. Shares in EADS, which had fallen recently in anticipation of the A380 delays, closed 1.1 percent higher at 22.65 euros ($28.85) in Paris before the company's announcement, but after Emirates and Lufthansa issued statements saying they would be taking delivery of their A380s later than expected. Boeing shares closed up $1.81, or 2.3 percent, at $81.87 Tuesday on the New York Stock Exchange. --------------------------------------------------= -------------------- Copyright 2006 AP