The announcement by Airbus earlier this month of a further delay in the delivery of the A380 superjumbo by up to one year has caused considerable concern among its customers, notably Dubai's Emirates airline, whose order for 45 represents 27 per cent of the planemaker's orderbook of 159.

Emirates, which was to receive its first A380 this month, will not get it until August 2008 nearly 22 months after the initial delivery was scheduled.

What does the delay mean to Dubai International Airport which has been fast gearing up for the planned A380 delivery?

Although Emirates is unlikely to cancel its mammoth order, the delay will have profound impact on the Dh15 billion expansion of the Dubai International Airport, which by 2012 will become the world's largest superjumbo hub with more than 20 double-deck contact gates, equipped to handle up to 800 passengers one way with a minimum transit time.

The A380 delay could impact the construction of the remaining terminals of the airport.

"There are a number of contact gates in Concourse 2, currently under construction that are equipped to handle the A380 superjumbo flights. These are being constructed in line with the planned delivery of the A380s," Huraiz Bin Huraiz, commercial director of Dubai Civil Aviation told Gulf News recently.

"We have already made two modifications to the airport's existing concourse, Shaikh Rashid Terminal, including altering two of its boarding gates for the A380.

"With regards to the delay in delivery of the A380s, I don't think we will need to make any fresh changes to Concourse 2/Terminal 3 package under the airport expansion plan. All these contact gates are also able to handle normal aircraft." He also did not anticipate any delay in the construction works. "Most of the tenders have already been issued and contractors are working as per schedule. We do not see any delay in that."

"Construction of the Concourse 2/Terminal 3 package will be completed next year, when the capacity of the airport will increase significantly. Last year, 24.7 million passengers passed through the airport, of which 14.5 million were carried by Emirates. Dubai airport has already exceeded the 22 million annual passenger handling capacity.

"Currently we are handling more passengers than the capacity of the existing terminals, Terminal 1, 2, and Concourse 1.

"However, tender for construction of Concourse 3 is yet to be announced, which upon completion, will raise the airport's capacity to 70 million."

The Dubai Government has already invested in associated infrastructure, including expanding the runway, constructing a Dh1.3 billion maintenance facility for the A380s. The project is almost complete and will serve a large fleet of most modern aircraft, including B777s, B747s and the A380 superjumbos.

Investment in the UAE's aviation sector, primarily driven by Dubai and Abu Dhabi, including the recently completed projects to those under planning and development will cross Dh350.5 billion ($95.5 billion). Of this, Dh295 billion, or 84.16 per cent are being spent by the Dubai Government alone, including Dh140 billion in infrastructure and airport development as well as Dh155 billion in aircraft acquisition of 143 aircraft including 30 on options and 113 firm orders. However, Emirates' Dh155 billion fleet expansion bill will not be directly financed by the government.

Emirates, currently operates a fleet of 99 wide-bodied aircraft. It will receive its 100th aircraft next month.
---Gulfnews today---

ITP Publishing wrote this today:
-------------------------------
Airbus’ A380 project has lurched from one disaster to the next. Andrew White reports on the crisis engulfing the aviation giant.

As the plane touched down, the 50,000 aviation enthusiasts sitting on the grass banks lining the runway broke into wild – and spontaneous - applause. A small puff of smoke came from the wheels, and history was made as the world watched on.

The maiden flight of Airbus’ A380 ‘superjumbo’ heralded the dawn of a new era in aviation. The four-hour test was largely conducted at around 10,000ft, above the Bay of Biscay in southern France, and the crew of six even took the craft on a flypast before landing - a glorious moment on a glorious spring day.

“A new page of aeronautical history has been written,” beamed French President Jacques Chirac. “It is a total success, and a magnificent result for European industrial cooperation.”

Yet fast-forward 18 months, and those blue skies have turned to storm clouds for Airbus, and the A380. Thousands of jobs must go, leading executives have already been shown the door, and the crisis is so severe that Airbus’ parent company has become destabilized to the extent of which government intervention may be required.

“Airbus is a successful company, but it has a massive short-term problem on its hands,” says Philip Butterworth-Hayes, editor of Jane’s Aircraft Component Manufacturers. “Every time you bring out a new aeroplane, because the investment is so huge, you almost ‘bet the company’. Airbus is just about big enough not to ‘bet the company’ on a new aeroplane, but what it needs now is sales, and it’s going to be very difficult to get sales on the A380 in the next six months or so.”

Shatteringly, the first A380 will not be delivered until at least late next year. The future of aviation, it appears, just can’t get off the ground.

So how did a textbook maiden flight pave the way for the mid-air disintegration of an aviation giant? And will the ‘superjumbo’ become Airbus’ ultimate white elephant – a US$20bn flightless folly?

Airbus’ dream was that the A380 should usher in a new age of luxury air travel. The project was announced to the world in 2000, after a nine-year consultation on the possibility of building a super-large passenger aircraft. Airbus - comprising four partners from France, Germany, Spain and the UK – would transform air travel across the world.

“Airbus set themselves some tough technology goals, as you have to do every time you launch a new aircraft,” says Butterworth-Hayes. “You have to raise the bar considerably with the technology that you’re integrating, or nobody will buy your aircraft.”

The twin-deck A380 would carry as many as 840 people, on the strength of four Trent 900 engines, specially designed to bear the weight of the ‘superjumbo’ over a range of up to 14,500km. Carrying a third more passengers than its rival, the Boeing 747 jumbo jet, it was hailed as an environmentally friendly jumbo, and would form the flagship of any airline’s fleet.

This dream was shared by the world’s top airlines – including Emirates Airline, Etihad Airways, and Qatar Airways – who placed record orders for the US$285m jets. Emirates placed the largest order, for 43 aircraft, whilst in total Airbus took orders for 159 of the planes. At the time, the aviation firm predicted that it would need to sell 270 aircraft in order to break even – a target that would comfortably be achieved as long as all went according to plan.

In early 2002, work began on manufacturing the aircrafts’ key components. It was a truly pan-European effort: The centre wing box, fuselage, nose section and Radome were built in France, the aft and forward fuselage and vertical tail plane in Germany, the tail planes and central belly fairing in Spain, and the wings in the UK.

Ahead of schedule, in May 2004, the assembly of the first aircraft began at a US$650m factory in Toulouse, France. Meanwhile, airports across the world began preparations to accommodate the ‘superjumbo’ in time for early 2006, when the first commercial A380s would take to the skies. At Heathrow Airport in London, part of Terminal 3 was even demolished as part of a US$180m redevelopment scheme to ensure that the world’s busiest airport would be able to host Airbus’ giant double-decker.

Later that year, however, the first cracks began to appear in Airbus’ grand design. In December 2004, Airbus’ owner, the European Aeronautic Defense and Space Company (EADS), revealed that the project was US$1.8bn over budget. There were, at this time, no mention of delays and the waiting airlines were none the wiser over the problems to come, and the A380’s maiden flight the following spring impressed even the most skeptical aviation analyst.

In June 2005, however, Airbus announced that the delivery schedule would slip by six months. It emerged that engineers were struggling to install the 700km of wiring that each plane needs, and that the complexity of the assembly programme was proving more challenging that anyone at Airbus had anticipated.

“An aircraft is a fairly customized package - every plane has a different specification and it’s a very complex piece of engineering,” says Butterwoth-Hayes. “The complex problem came when they realized they couldn’t do the customer wiring at the pre-assembly stage, they had to do it at the final assembly. That made it far more complicated, but the problem still should have been dealt with earlier than it was.”

Airbus was apologetic, but insistent that such glitches were par for the course on such a project.

“In most airline programmes of this size - including those of our competitors - things can run a little later than originally planned,” countered a spokesman. “The plane is continuing to perform well in tests.”

Yet despite Airbus’ public composure, it was at this point that alarm bells began to ring. Whilst steadfastly maintaining that the project would suffer no more delays, Airbus came under heavy pressure from both EADS and the airlines whose long-term strategies depended on prompt delivery of the A380s.

The ice broke a year later, in July 2006. It emerged that there would be a further delay of six to seven months – an announcement that was to lead to blood in the boardrooms of both Airbus and EADS.

Airbus chief Gustav Humbert tendered his resignation almost as soon as the further delays were announced. One of the German’s last announcements as chief executive revealed that only nine of the planes, instead of the scheduled 20 to 25, would be delivered next year – a failure that rendered his position untenable.

“The recently announced delays on the A380 production and delivery programme has been a major disappointment for our customers, our shareholders and our employees,” he said at the time. “As president and chief executive of Airbus, I must take responsibility for this setback and feel the right course of action is to offer my resignation to our shareholders.”

The second such departure of the summer, however, would prove far less straightforward. As soon as details of the latest delay were released, accusations began to fly that EADS co-chief executive Noel Forgeard had deliberately begun selling shares in the firm prior to the announcement.

Co-chief executive of Airbus since 2005, Forgeard had continually denied any wrongdoing over his selling of EADS shares. He told investigating market regulators that he sold the shares in question in March of this year, and that he did not know of delays in the production of the A380 until April.

Nevertheless, when the delays were announced, Airbus’s share price slumped 26%, and Forgeard’s protestations of innocence were not enough to calm shareholder outrage. Initially refusing to stand down – he told a French parliamentary committee that such a move was “out of the question” – he eventually had no choice but to fall on his own sword. The A380 had claimed its second, most high-profile management victim.

“The management certainly hasn’t helped at Airbus,” says Butterworth-Hayes. “As a result you have a company that has different views of the market, and different approaches, alongside immensely complicated technical problems.”

Less than three months later, and another hammer blow following an audit of the entire A380 production process. A further delay of up to 12 months was announced - the first A380 would now be delivered to Singapore Airlines in October 2007, 20 months after the carrier had intended to start services. With the first deliveries now due to be almost two years late, and the firm facing operating losses of US$3.6bn (as part of a US$6.1bn anticipated drop in profits) over the next four years, Airbus moved ruthlessly to install a series of cost-cutting measures. Humbert’s successor, Christian Streiff, outlined a series of sweeping changes to the board. He demanded job cuts, and urged that all production of the A380 be shifted to Airbus’ headquarters in Toulouse. Meanwhile, single-aisle jet programmes, including the A320, would be concentrated in Hamburg.

Behind the scenes, EADS was also preparing to take full control of the ailing aircraft manufacturer. BAE decided to dispose of its 20% minority stake, for just over US$3.5bn, reportedly wary of further delays to the troubled project. In a statement, BAE said it thought that, “a significant amount of management focus, time and investment would be required to address the issues currently facing Airbus”.

At the time, EADS co-chief executive Louis Gallois maintained a brave face, saying that BAE’s comments had come as no surprise. “We knew we were facing considerable challenges. We are working on them and we will have a complete overview in a few weeks,” he said.

However, it quickly became apparent that Streiff’s proposals were unpopular politically. In Germany, where Airbus employs over 12,000 people, the pressure began to mount on EADS to reign in their fiery new chief executive. German finance minister Peer Steinbrueck urged Airbus to safeguard jobs in Germany, and thus in the week that EADS agreed to take full control of Airbus, they also demanded that Streiff permit them close, day-to-day oversight of the aviation firm.

All this was too much to take for Streiff, who demanded autonomy and a free hand to run the firm, making decisions based on commercial rather than political concerns. To the indifference of the majority of the EADS management, who had grown tired of Streiff’s unwillingness to play political ball, the new chief executive walked just two months after taking the reigns.

“There’s certainly a tension between EADS and Airbus,” says Butterworth-Hayes. “There would not be an Airbus without the French, who have been the key driving force both in political and economic support. They have been an absolutely vital element in the company’s historical success.

“Going forward, however, you have to ask whether that model can continue,” he adds. “There has to be a cultural change – the French system works extremely well when you’re trying grab market share; when you need a lot of money and investment; when you need time to develop competitive products. It seems to me it works less well when you’re in a position of superiority and you have to continue that momentum.”

Such shenanigans have only served to worsen the moods of airlines, whose long-term business strategies are increasingly being threatened by Airbus’ woes. After many months of refusing to comment on speculation that the A380 project was in trouble, many of the manufacturer’s key clients have attacked Airbus.

Though no airline has yet cancelled orders, several – including Emirates, Qantas, Virgin and Singapore – have expressed deep disappointment at the latest delays. In a strongly-worded statement, Emirates said that it was “reviewing all its options” and that the delay will “definitely have an impact” on growth. Virgin said the delays had “serious implications” for growth, whilst Qantas was “disappointed” by the delays. Air France, in addition, has already announced plans to seek financial compensation for the postponed delivery of 10 A380s. Analysts predict that compensation is a likely option for each airline, and Airbus is braced for a massive bill, which some forecast could reach US$2.5bn.

The A380s’ delivery delay now stands at two years, and British aircraft engine-maker Rolls Royce Plc has even suspended the production of engines for the ‘superjumbo’. Even more alarmingly for Airbus, the manufacturer has now calculated that it must sell 420 A380s just to break even on the project – a giant leap from the previous estimate of 270.

Moreover, the A380 problems have impacted upon work on other projects, notably the A350 ‘Widebody’, which has suffered as a result of the short-term cashflow crisis. “Potentially with the A350 they have a very powerful product,” says Butterworth-Hayes. “The problems with the A380 have affected work on the A350, which is the really important one for Airbus. The A350 is their next cash cow, and they really could have done without the knock-on from the A380.”

At the beginning of this month, Airbus announced that there would be “painful” job losses as a direct result of the A380 fiasco. A week later, the firm’s latest chief executive, Louis Gallois (who is also co-head of EADS) revealed that the company was to cut 66 head office staff, and freeze the salaries of senior managers. The firm said the job losses would be “split roughly half and half” across its twin headquarters in Munich and Paris, which employ 666 staff in total.

In addition, thousands of Airbus workers - many of whom were present as the A380 touched down for the first time in Toulouse – are expected lose their jobs over the coming months.

These are bleak days for the European aviation giant, and its parent company are feeling the pressure as German motor giant DaimlerChrysler is considering reducing its own shareholding in EADS. It has signaled its intention to sell a 7.5% stake – a move that has forced the German government into considering buying a stake.

Worried that Germany’s influence within EADS could diminish if non-Germans bought Daimler shares, German finance minister Peer Steinbrueck intervened, saying: “We can’t let Airbus fall headlong because some mismanagement has left it in a difficult position.”

Meanwhile, Airbus’ chief rival is taking advantage of the European firm’s troubles. Just 18 months ago, on the day of the A380’s maiden flight, US manufacturer Boeing quietly published their quarterly results for the first three months of 2005. Profits had slipped – down to US$535m from US$623m in the same period the previous year. As Airbus wowed the aviation world with their ‘superjumbo’, it looked as though Boeing were slipping further behind the Europeans.

Boeing chief executive, James Bell, congratulated Airbus, but reinforced the US manufacturer’s belief in their new aircraft, the ‘Dreamliner’ – a project that is, today, on target and scheduled to arrive years sooner than Airbus’ equivalent, the A350.

“Boeing are doing extremely well – the ‘Dreamliner’ looks like a very fine aeroplane and it’s just what the market wants,” says Butterworth-Hayes. “It’s extremely adaptable, and it’s going to be 15-20% cheaper to operate than the competitor. You have to say at the moment that it looks pretty good for Boeing.”

“Of course we thought the A380 would fly, that is what aircraft are made to do,” said Bell, 18 months ago. “But we thought our bet on the mid-range [airline] market was a better bet, and we still do.”

Right now, as Airbus fights to keep the A380 project alive, the shrewd money might well be on their rivals on the other side of the Atlantic. The ‘future of flight’, it appears, has a long way to go.

www.sience-forum.org wrote:
Will the United Arab Emirates actively participate in the european
aircraft industry?
The debacle of the delayed delivery of the huge Airbus A 380 reminds one of
the early 70ies of the last century. At that time a design problem on the 747
almost lead to the collapse of BOING Aircraft Industries. Unforgotten is the
picture when the aircraft on its first flight broke down on the runway.
Restructuring Expert Dr. Nicole Essiger-Munk:
The near-default of BOING is an always present reminder!
The default of BOING, at that time, seemed to be inevitable. Only with the
largest credits in banking history and Government guaranties the US aircraft
manufacturer could be saved from defaulting.
If the A 380 crisis at AIRBUS (EADS) continues, a similar scenario could
develop.
Management Errors and Shortage of Capital underestimated?
The rating agencies are about to revise the rating of the Airbus parent
company EADS to reflect the higher credit risk. This would increase the cost of
lending an estimated capital requirement of EURO 10 BN enormously, and at the
same time scare Investors.
AIRBUS insolvent?
The Restructuring Expert Dr. Nicole Essiger-Munk warns of a default at AIRBUS
INDUSTRIES and suggests a basic restructuring of the EADS Group. Suggested
saving procedures remain unsatisfactory to reach a sustained establishment on
solid ground and to prevent lack of capital.
Dubai in the role of the White Knight for AIRBUS?
In the prevailing scenario the United Arab Emirates could not only be
financially strong Investors, but could also employ their impressive management
know how and assist with their experience in running large projects.
Large projects will be realized by Sheikh Mohammed in the shortest
possible time
During her informative visit to the UAE the Author of her book:
”Insolvenzprophylaxe für Deutschland” (Restructuring policy for Germany) Dr.
Nicole Essiger-Munk has studied this ability of the Emir of Dubai, the leader of
the desert state, Sheikh Mohammed Bin Rashid Al-Maktoum. He has shown how huge
Industrial- and Infrastructure Projects can be finished within a very short
time.
The World’s largest Airport Dubai World Central is being built at Jebel
Ali
While on the expanding Dubai International Airport the special terminal for
the A 380 is being built, the airport at Jebel Ali is already under construction.
The airport is laid out to have 6 runways and will be able to handle 120 Million
passengers per year.
Together with the airport a new city is for one Million people is being
created, with schools, the DAE University and a huge Logistics Center with
direct connection to the largest man made port of Jebel Ali.
Dubai Aerospace reforms the future of air transport
One of the newest examples for Dubai’s ambitious aims in the air transport
industry is the foundation of the Dubai Aerospace Enterprise (DAE).
This Billion Dollar Aerospace project of the United Arab Emirates will
embrace all airline activities also that of EMIRATES and will be the world’s new
yard stick in that industry. With the unique capital funding of 15 Billion US
Dollars, the know how to produce aircraft components (DAE Engineering), its own
Aerospace University (DAE University) and the boom in leasing aircraft (DAE
Capital) the history of the air industry may well be re-written.
EMIRATES Airlines have ordered a full years production of AIRBUS/BOING:

The airline EMIRATES with a majority of its shares owned by the Government
and managed by Sheik Ahmed Bin Saeed Al-Maktoum, an uncle of the Emir, Chairman
of EMIRATES AIRWAYS and President of the Aviation Board, with 43 firm orders for
the A 380 is the largest single customer for this aircraft. The airline is
growing in double digit figures and has ordered a total of 100 aircraft from
AIRBUS/BOING. The late delivery of the A 380 endangers the expansion plans of
EMIRATES. The indications are, that Dubai will play an active roll in the
restructuring if AIRBUS to make certain its plans in the airline business is
ensured.
Dubai’s entry into AIRBUS – with an option to further develop the aircraft
manufacturer – would definitely firm up its position in the aircraft business.

The perspectives of growth in the neighborhood to booming markets of ASIA
remove all doubts that Dubai will be the strategic hub and future center air
traffic.
Such consistent pursuits of ideas have not been seen in Europe since
the days of the economic boom years. Dubai remains exciting.
http://www.drnicolemunk.de/we_demo_2/news/Airbus-Reorganisation-Ruling-Familiy-Al-Maktoum-Dubai.php

Dubai and Hamburg: The first Emirates Airbus A380 touched down on schedule in Dubai on Tuesday evening.

The aircraft took off from the German city of Hamburg for its new home in Dubai.


The giant plane left Germany with its cargo of dignitaries and journalists at 11.18am (UAE time) on Tuesday morning, and is due to land in the UAE at around 5pm.

The 489 seat double deck aircraft, which features showers in first class and lounge areas for premium passengers, will go into service on August 1 when it flies to New York.


A380 flight diary:

11.30am (UAE time): We took off shortly after 9.15am (Hamburg time) time and will soon be cruising at 40,000 feet.
Noon: The media are sitting in business class, breakfast is being served shortly and everyone has spent the past 30 minutes pushing the mass of buttons on their fully reclining seats

1pm: Emirates chairman Shaikh Ahmad bin Saeed Al Maktoum is in first class. The showers are just in front of me so I might try to pop in to freshen up before landing.

1.50pm: I've just popped down to lower deck to check out economy class. It is surprisingly spacious. Seats are bigger than normal I think and the TVs are too. 10.6 inch. It is like a ghost town in here though. Everyone is understandably lording it in business class

3pm: The A380 is scheduled to touch down more or less on time. The latest landing time being given is 5.32pm.

4pm: I've just been wandering around the first class area which has suites better equipped than some hotels I've stayed in. I also bumped into Shaikh Ahmad on the stairs - certainly an unusual event on a plane. He gave his personal endorsement of the A380 catering, saying he loved the food he'd been served.

4.15pm: The news everyone has been waiting for...The food. Simply, it is confirmation that Shaikh Ahmad is a man of taste. I just had dinner. A morello cherry roulade for dessert but the highlight was the poached fillet of beef in pumpkin sauce. A far cry from my usual airline fare of chicken or fish? I could get used to this business class life. Best ask for a pay rise when I land.

4.20pm: We're due to land in Dubai in around one hour. The flight has been very smooth and it is quite remarkable how quiet this plane is. Taking into account the sheer size of it, it barely makes a whisper.

5.30pm: Airbus A380 touched down on schedule in Dubai on Tuesday evening.