Airlines that have already waited years for the arrival of the Airbus A380 superjumbo jet will have to wait a little longer. Tuesday, the French jet maker said that delivery could be delayed as much as seven months.
According to press reports, the jetliner's electrical system needs reworking, which has led to production delays. Nevertheless, Airbus says that Singapore Airlines, the A380's signature customer, will take delivery of the plane by the end of the year.
Financially, the delay could prove costly to Airbus parent EADS -- the European Aeronautic Defence & Space Co., a publicly traded firm on the French stock exchange. EADS had been counting on delivering between 20 and 25 of the planes next year, garnering a cool $300 million each. Now, however, Airbus says the total delivery could be less than half that.
Naturally, the stock of rival jet maker Boeing (NYSE: BA ) jumped at the news of Airbus' misfortune. The shares have risen nearly 10% since Tuesday and are still rising today as I write. Frankly, that's mystifying -- because Boeing has problems of its own.
BusinessWeek recently published a story outlining deep concerns with the production of the 787 Dreamliner, a lightweight, fuel-efficient jetliner that has proved to be so popular that it has helped fuel a resurgence at the company. In a response to those reports of trouble, company Vice President Mike Bair told The Seattle Times that Boeing would have to scrap sections of the 787's fuselage but also insisted that the company would meet its commitment to begin delivering the plane to customers in the summer of 2008.
Really? For those who don't speak aviation-ese, the fuselage is the main section of an aircraft, typically occupied by crew, passengers, and cargo. If the primary draw of the 787 is its lightweight, fuel-efficient design, the fuselage -- where a lot of weight will be carried -- must be absolutely flawless. As of now, it isn't. Color me crazy, but that sure seems like a bigger deal than either Boeing or its investors are currently willing to admit.
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- What a whopper of a jet!
- The new superjumbo first took flight last January.
- Leave it to Virgin to try turning the A380 into a flying casino.
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Fool contributor Tim Beyers would someday love to gamble on an A380. It sounds so Orient Express. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out which stocks he owns by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.