Airbus A380 Crisis

The hits just keep on coming for Airbus.

As if lost sales and slipping delivery dates weren’t enough to worry about, the EADS subsidiary lost two top executives today:  the CEO of the company, and the guy who ran the Airbus division.

Humbert said the delays to the A380 had been a “major disappointment for our customers, our shareholders and our employees,” adding that he felt it was the right course of action to offer his resignation to shareholders.

Relations between Forgeard and Humbert, his soft-spoken former No. 2 at Airbus, have appeared prickly and Airbus was reported to be furious when Forgeard diverted blame onto his former teams in Toulouse, southwest France, for the A380 crisis.

But some analysts had said the future of both men had become intertwined simply because of the scale of the A380 problems.

The A380 delays are expected to cost EADS some 2 billion euros in lost operating profits between 2007 and 2010. Its shares fell 26 percent, wiping out 5 billion euros of value in one day when the A380 delays were announced in mid-June, sparking a hunt by French regulators to know exactly who knew what and when.

The sell-off and disclosure of what was going wrong inside the A380 assembly plants also angered Britain’s BAE Systems.

Shades of the Concorde?  Perhaps.

Forty years ago, Concorde was touted as the future of commercial aviation.  Now they may have been right from a technical standpoint, but Concorde was an economic disaster for those who built it.  Predictions of thousands of supersonic birds traversing the planet gave way to just a dozen aircraft, each sold to their respective airline for the princely sum of one dollar.

If Airbus isn’t careful, people far more influential than me will start making that connection.

On the other hand, billions of dollars worth of infrastructure improvements necessary to accomodate the mammoth A380 appear to be moving ahead without regard for the machinations taking place at Airbus.

Here in Southern California, LAX is about to close one of its four runways for as long as two years.

Around midnight July 29, airport workers will paint large yellow Xs on the southernmost runway, a signal to pilots that it is closed. Then, multitudes of dump trucks, graders and excavators will roll onto the airfield, not far from where hundreds of airliners will continue to take off and land each day.

The first major project at Los Angeles International Airport in two decades aims to improve safety and prepare the airport for a new generation of jumbo jets. Work will begin just as the airport enters its most hectic month of the year, putting pilots, airlines, air traffic controllers — and members of nearby communities — on edge.

“I think delays will be more significant than the original forecasts,” Jon Russell, a safety coordinator for the Air Line Pilots Assn., said of the $333-million project to move the runway 55 feet south — closer to the airport’s boundary with El Segundo — and build new taxiways.

The impending mix of heavy construction equipment and commercial air traffic at a crowded airport about to lose one-fourth of its runways has officials looking for ways to head off long delays, which could trigger problems at other airports as well.

LAX can probably operate with three runways and maintain partial on-time performance.  The problem is that it doesn’t leave them with an ounce of additional capacity.  No wiggle room to deal with contingencies.  It’s a point the FAA makes in the last paragraph of the article:

With construction in full swing in a matter of days, air traffic controllers caution that mechanical problems or bad weather could throw off their best-laid plans.

“If there’s an aircraft mishap, like someone’s gear collapses on the runway, and now we’re down to two runways,” the FAA’s Shappi said, “all bets are off.”

It’s hard to imagine that LAX wouldn’t have events like that from time to time.  A blown tire, brake fire, rejected takeoff, overweight landing, runway incursion, bird strike, or a dozen other problems might close another runway.  That’s when things will really get interesting.

  5 comments for “Airbus A380 Crisis

  1. peter
    July 4, 2006 at 11:02 pm

    Hi Ron,do i detect a whiff of sour grapes,Concorde may well have been a success if the US hadn’t been against it.the aircraft industry took a giant step backwards with the grounding of Concorde.iv’e no love for the French but it seems the US can’t stand competition.

  2. Ron
    July 5, 2006 at 1:21 am

    No sour grapes here. I’d have been as happy as you to see the Concorde continue flying. It’s a shame to see the fleet sitting in museums instead of flying at Mach 2 as it was intended to do.

    My point was simply that the schedule slips, budget overruns, leadership turnover, and other bad news reminds me of the Concorde program. Initially, there was supposed to be a market for several hundred Concordes. Then it was down to 100. Then 50. In the end, very few were built.

    If the A380 is successful, more power to them. I wish the Airbus team the best. I think the competition between Airbus and Boeing results in better airplanes on both sides.

  3. peter
    July 5, 2006 at 8:00 am

    i can’t fault your argument ron.

  4. Robert Harris
    July 17, 2006 at 7:42 am

    I read in several sources that this second delay of the A380 is due to wiring problems, but none of these sources are more specific. A year or two ago the Wall St. Journel ran a long article on some of the inovations involved in the 380 program. I remember being suprised at the time that they were using aluminum wire instead of copper, this was billed as a weight saving measure. GE tried it in locomotives in the ’60 s( and it didn’t work well). I wonder?

  5. Ron
    July 17, 2006 at 6:41 pm

    I was surprised at that, too. But you gotta keep the weight down or you won’t sell many airplanes, so I suppose you have to get creative once the obvious weight loss decisions are implemented.

    I read an article on the 787 today that described how the Dreamliner was having some weight issues of its own.

    It’s not limited to transports. I see this problem with general aviation aircraft, too. My ’63 PA28 has an 1170 pound useful load. Compare that to a 2006 model at 850 lbs.

    We want to luxuriate in fine fabrics, soundproofing, cushy leather, and advanced electronics. This is the price we pay.

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