Market Scan Airbus Claims To Have A380 Wires Straight Chris Noon, 01.22.07, 10:22 AM ET Airbus claims it has fixed electrical problems related to its A380 = superjumbo jet. About time, the company's shareholders and customers = may say. = The company, whose parent is European Aeronautic Defense and Space, = said over the weekend that it had "passed a major milestone" for the = plane's production and added that deliveries to Singapore Airlines, = its first customer, were scheduled to arrive in October. EADS shares = were up 33 euro cents (43 cents), or 1.4%, at 24.72 euros ($31.97), = in mid-afternoon trading in Paris. = "We have finished the electrical installation," said Tore Prang, an = Airbus spokesman. "We have handed the aircraft to the cabin equipment = team to install the first A380." Last week, Airbus Chief Executive = Louis Gallois said the firm was "determined to complete this first = delivery in October 2007, as we announced, and to prepare ourselves = for the next deliveries in 2008." = It shouldn't be too proud of itself. Problems with the A380 have left = Airbus two years behind its earlier delivery schedule and cost the = firm more than $6 billion. There could be additional charges to come. This also may not be the last word on the wiring fiasco. "Under no circumstances has the wiring issue been totally resolved. = >From my understanding, Airbus have now got to the bottom of the = problem with the first aircraft, i.e. have removed all the old = mismatched wiring, cables, harnesses, rigging, fasteners, ties and = supports and have either completely installed a new set or else will = do this contemporaneously with the installation of cabin equipment in = Hamburg," says Doug McVitie of Arran Aerospace, a former Airbus = employee. McVitie added that Airbus "wants people to believe that the = plane is ready to be fitted out," and questioned why is it would take = a minimum of nine months to complete that job. = There are also questions about the aircraft's weight. The A380 = was "over-weight by about four tons" as of last June, said = McVitie, "part of which is due to wiring." So until Airbus says the = aircraft has met its weight targets, it hasn't. "That news would be = worth 50 centimes on the EADS share price," McVitie says. = Several major carriers have had second thoughts about the A380. One = of them, Emirates Airline, whose order for 43 jets has been valued at = roughly $13.5 billion, asked the European consortium to clarify the = aircraft's delayed delivery schedule last year. Singapore Airlines = has agreed to buy 19 A380s. Other customers include Thai Airways, = Virgin Atlantic and Qantas. = "I know Singapore Airlines doesn't believe in the delivery date and = have spoken to no-one outside Airbus who does. They're almost = certainly planning on December or at latest January. December is more = likely. Gallois gave a personal commitment that delivery would be = made, which is worrying. If he'd given a corporate one, it would have = been better. But he knows he can't do that as it's not verifiable and = could have an affect on share prices which could get him in hot = water," said McVitie. = Gallois' determination to deliver the aircraft is all very well, but = Airbus customers shouldn't be surprised if new delays arise from the = A380 project. Wiring the twin-deck A380 has proven a much more complex industrial = challenge than expected. This is understandable when you consider the = wires in each plane stretch the length of the Hudson River. Another = part of the wiring problem is linked to airlines asking for = extensively customized interiors. Wires controlling in-flight entertainment, lights, air conditioning = and the plane's operating systems are bundled in harnesses throughout = the aircraft. Airbus, perhaps foolishly, allowed each customer to = customize its entertainment systems, which means getting the right = wire in the right place is tricky. = While delays of this magnitude are not uncommon in such a large = project, Airbus' perceived lack of transparency toward its customers = and shareholders added to its problems. EADS has been distinctly = uncommunicative on the length of setbacks to the program. = EADS said at an investors' forum in October that in order for the = A380 program to break even, it had to sell 420 of the aircraft, as = opposed to the 270 originally planed. If that is the case, things = aren't going well for the Franco-German company. So far, Airbus has = received 166 orders for the double-decker planes. Unless the company = can start selling A380s at close to list price, as well as drive = costs down, the program will struggle to break even, let alone = deliver profits. = Some analysts believe Airbus' bacon may be saved by the fact that = existing A380 customers have few alternatives to the superjumbo. = Oxford Analytica has pointed out that Boeing's 787, or the long-range = version of the U.S. company's 777 -- currently configured for = freight -- could be alternatives for angry customers. However, it = adds that "Boeing will not necessarily be the immediate beneficiary = of Airbus's A380 travails, given its current emphasis on long-range, = mid-sized airliners." The best slide auction on the net: http://www.auctiontransportation.com/sites/psa188/