Aircraft News - Europe.

Oct 9, 2006

Aer Lingus, Ryanair, Boeing

Ryanair said its buying power would give Aer Lingus added negotiating strength to buy new planes either from Ryanair's preferred supplier Boeing or from Aer Lingus's usual supplier Airbus. Oct 5, 2006

Aeroflot. Airbus, Boeing

Aeroflot will now split a long awaited order for new aircraft between Airbus and Boeing chief executive Valery Okulov CE told reporters at an economic forum in the Siberian city of Irkutsk last week. It seems that Aeroflot wants 22 Airbus and 22 Boeings. However Russian politics being what they are these cannot be considered firm orders and both manufacturers have declined to comment. Aeroflot is owned by the state which through the national bank recently acquired a 5% interest in EADS, soon to become the sole owner of Airbus. http://www.aeroflot.ru/eng Oct 2, 2006

Air France-KLM, Airbus, Boeing

Air France KLM's Van Wijk said the Franco-Dutch airline expected to invest much of the merger savings in new planes, noting that KLM had several Boeing 747s that were 25 years old, the company needed to replace MD-11s and Air France is buying new A380s. Oct 4, 2006

Airbus

Adding to speculation that the recently installed Streiff might be leaving was a French media report on Friday which linked the Airbus boss with a move to automaker PSA Peugeot Citroen. Airbus denied the report, which was published in French magazine Challenges. Streiff is new to Airbus, hired as an outsider in July to shake up the world's top-selling maker of airliners. After his initial review of the company, he issued his rescue plan this week, sparking nervous response from politicians and labor groups in the four countries most likely to be affected by expected job cuts and plant sales. Officials in Germany stressed that any trimming of Airbus operations must be spread evenly, because Germany has more plants than France, Spain or Britain. A German government spokesman on Friday confirmed that Chancellor Angela Merkel and French President Jacques Chirac were expected to discuss the company's woes when they meet in Paris next Thursday. EADS as parent of Airbus is Europe's aerospace champion, the product of a deal which merged German, French and Spanish firms in 2000 to build scale needed to compete against much larger US companies. Oct 8, 2006

Airbus

Germany Expects On-Time Delivery Of Airbus A400Ms. Germany expects Airbus to deliver on time the 60 A400M military transporters it has ordered, a spokesman for the Defence Ministry said on Friday. The comment came after Airbus Chief Executive Christian Streiff said in a newspaper interview on Thursday that the A400M program was "on the edge". A total of seven European NATO countries have ordered the A400M and need the plane to bolster their airlift capacity. The A400M is the aircraft maker's first major venture into the military field and delays to it would be a huge blow. Airbus is in the midst of a crisis surrounding its A380 superjumbo. The world's largest airliner is now running two years behind its original delivery schedule as engineers struggle to overcome wiring problems. Oct 6, 2006

Airbus

Airbus A380 customers made clear their intention to seek compensation for the extensive program delays and some may consider cancellations. German Finance Minister Peer Steinbruck was one of many German officials to express concern yesterday over Airbus CEO Christian Streiff's plans to reduce overhead costs by 30%, warning that shifting A380 work away from Hamburg, where the company employs 11,000 workers, must not be "to the detriment of Germany." In France, union leaders representing Airbus plant workers called on the French government to step in and prevent major job losses, which appear likely given Streiff's call for ambitious cost cuts. Prime Minister Dominique de Villepin said he would be "vigilant" in monitoring Airbus job reductions. Oct 5, 2006

Airbus

Airbus could slow 2007 deliveries to just two aircraft said one newspaper report, down from a target of 25 that was chopped to nine in June. Analysts have said Airbus needs to deliver about 300 of the planes to break even. Airbus Chief Executive Christian Streiff was appointed in July to sort out the company's problems and has pledged to put an end to its fitful performance on delivery of the A380 and launch of the mid-sized A350. He presented the EADS board on Friday with a proposal to revamp how and where Airbus builds planes, which major shareholders DaimlerChrysler and Lagardere objected to, according to France's Les Echos newspaper. It said Streiff threatened to quit if his reforms were not adopted. The EADS board has lined up a meeting on Wednesday with the company's works council and managers. EADS acknowledged last month that fresh delays in the world's biggest airliner were likely but has not yet spelled out how big a delay or the likely costs. Airbus faces rising compensation claims from airlines which will have to lease other planes until Airbus sorts out the wiring troubles holding back the A380. Oct 3, 2006

Airbus

The troubled Airbus A380 was designed as a flagship product for Airbus, a symbol of its supremacy over Boeing and its ageing 747 jumbo. Analysts now say the project poses an increasing risk to Airbus as it ties up money and engineering resources which the planemaker needs to use to build its next plane, the A350 positioned in a much more profitable segment of the market. Oct 3, 2006

Airbus, EADS

A profitable Airbus is also key to EADS for funding defense operations which it hopes to expand deeper into the US and other markets, partly to offset the cyclical nature of the civil airliner market. Analysts expect demand for airliners to slow as the industry's typically decade-long cycle comes off its 2005 peak. Sales of the A380 superjumbo have stalled and buyers appear to be holding off on the planemaker's A330 and especially its A340 model as the mooted A350 threatens to eclipse both. Streiff's mandate is to cut costs to help counter overruns on the A380 superjumbo which is running two years late as well as to do something to counter the weak dollar, which in an industry priced in dollars is helping US-based rival Boeing. He also needs to spearhead Airbus's strategic efforts, which most urgently require a design for the A350 model due in 2012 which can claw back market share being lost to the 787 due in 2008 and the larger 777. Earlier this week, EADS pushed back the A380 superjumbo by another year as engineers struggle to fix problems encountered in wiring the mammoth 555-seat planes. Oct 8, 2006

Airbus, EADS

Airbus Denies CEO Leaving, EADS Silent. Airbus on Friday denied a media report saying Chief Executive Christian Streiff had resigned and that his departure had been approved by parent firm EADS. "I want to reconfirm that Streiff has not resigned, contrary to the indications," an Airbus spokeswoman said. An EADS spokesman declined to comment. The Associated Press reported that a person close to EADS had said its co-CEOs had received and accepted Streiff's resignation. Reuters was told by a source close to the matter that Streiff had earlier backed his bold proposals for reforming Airbus with a pledge to resign if they were not implemented. However, Streiff would need EADS' co-CE0s Thomas Enders and Louis Gallois to agree to his resignation, something the parent firm had not issued as of Friday. Oct 8, 2006

Airbus, EADS

French PM Defends Airbus Chief As Speculation Rises. France's prime minister defended the head of troubled plane maker Airbus on Sunday, saying he saw no reason for Christian Streiff to resign as speculation swirled that he was set to leave after just three months at the helm. The comments, by Dominique de Villepin in a televised interview, came amid a deepening crisis at the Toulouse-based group, linked to extended delays on its high profile double-decker A380 superjumbo. Brought in to lead the group in early July after problems with the A380 forced out his predecessor Gustav Humbert, Streiff has vowed to cut costs, saying deep changes are needed at the plane maker's network of manufacturing sites. But his plans have run into resistance at EADS, the Franco-German parent of Airbus, and reports surfaced on Friday that Streiff's departure was imminent. Oct 8, 2006

Airbus, EADS

Airbus and EADS officials concede Boeing advantage. Airbus CEO Christian Streiff admitted that the manufacturer now is up to a whole decade behind rival Boeing, while parent EADS co-CEO Tom Enders conceded that it no longer may be feasible to pursue the A350 XWB program. The revelations came yesterday as Airbus continued to deal with the fallout from Tuesday's announcement that the A380 will be delayed an additional year and the company will undergo a radical restructuring dubbed "Power8" aimed at slashing overhead costs by 30% Streiff told Le Monde that his review of Airbus operations has uncovered serious production inefficiencies. "It will take us about 10 years to catch up with Boeing in terms of development and efficiency," he said. Oct 6, 2006

Airbus, EADS

EADS's Enders, speaking at a Berlin news conference, said the A350 XWB program is under review. "We will discuss intensively in the next weeks whether we have the financial and engineering resources to actually take on this program," he said. Both executives and EADS co-CEO Louis Gallois have said repeatedly this week that no firm decisions regarding the Power8 plan have been made. "Everything's possible but nothing's decided," Streiff said. Speculation over job cuts and transferring assembly work, including moving A380 production from Hamburg to Toulouse, already have generated political controversy in France and Germany. German Economics Minister Michael Glos warned at a press briefing that job cuts and facility closures must be "equally [and] fairly distributed" between France and Germany. Airbus employs 42,000 workers in Germany, including 11,000 in Hamburg. What is clear, however, is that EADS will incur significant losses due to the A380 delays. Former Airbus CEO Gustav Humbert and former EADS co-CEO Noel Forgeard resigned shortly after a six-month delay to the A380 program was announced in June.. Airbus now says it "underestimated" its problems at that time. Oct 6, 2006

Airbus, EADS

Airbus A380 Delay Stretches To 2 Years. Airlines revealed production troubles on the Airbus A380 will now delay it by two years, putting a board meeting at parent EADS under fresh pressure to map out how it will get the USD$15 billion superjumbo back on track. Emirates, the biggest buyer of the A380 with 43 on order worth USD$13 billion at list prices, called the program's latest delay "very serious" and warned it was reviewing how to respond. Emirates said its planes would come 10 months late, while Lufthansa said it now expected a fresh delay of a year. Air France said it would receive its first A380 only by spring 2009. A spokeswoman said the original delivery target of spring 2007 had already been postponed by a year. Virgin Atlantic and Qantas also confirmed a delay in deliveries. Oct 3, 2006

Airbus, EADS

EADS Board To Meet On Costs, A380 Delay. The board of Airbus parent EADS is expected on Tuesday to decide on a cost-cutting program and assess the impact of the latest delay in its A380 superjumbo plane, which one newspaper report said could now slow 2007 deliveries to just two aircraft. Airbus said in June it expected to deliver nine A380s next year, down from an original target of 20 to 25. It said last month there would be fresh delays, but declined to be more specific pending the outcome of the board meeting. A spokeswoman confirmed the company's board would meet on Tuesday, after holding an inconclusive session on Friday, but declined to comment on details. La Tribune newspaper said the board would meet by videoconference. An announcement from the firm may have to wait until Wednesday, however, as a meeting is scheduled then with the company's works council and managers. According to La Tribune, Oct 3, 2006

Airbus, EADS

EADS is due to announce it will shift the bulk of A380 production to its Toulouse factory in France. In compensation, its German factory in Hamburg will take over production of the A320 single-aisle aircraft and play a lead role in building the new A350 mid-sized model which is due to be launched soon. But Les Echos newspaper said an overhaul of the production process, proposed by new Airbus Chief Executive Christian Streiff four days ago, was seen as too drastic by the company's main shareholders. DaimlerChrysler has a 22.5 percent stake in EADS, the French state holds 15 percent and Lagardere has 7.5 percent. The paper said Streiff had threatened to resign if his plan was rejected. EADS had no comment. Trade union sources on Friday said that the cost savings envisaged by Streiff could be as much as EUR2 billion (USD$2.54 billion) by simplifying the production process. The work is currently spread out over the former Airbus consortium's founder member's countries with a fleet of special 'Beluga' transport planes ferrying parts between plants. Germany and France are very sensitive about the geographical spread of plane production due to the high numbers of jobs involved. EADS in Hamburg has fought a long battle with environmentalists to extend the plant's runway specifically to be able to take part in the A380 project. The second delay in A380 deliveries, announced in June, not only revealed industrial difficulties at Airbus but also a management problem at EADS which re-opened French-German tension. Streiff and new EADS co-CEO Louis Gallois were brought in and the company announced a new revamp of its long-mooted A350 dubbed the XWB for "extra wide body", signaling a break with the past. But on September 21, after an audit by Streiff of all Airbus programs, the company announced a third delay to the A380 without giving a new timetable. The June delay triggered a 26 percent drop in EADS shares after the company said the setback would cost it EUR2 billion between 2007 and 2010. Airbus is expected to maintain the delivery of the first A380 to Singapore Airlines this year but it is unclear what will happen in 2007. La Tribune said deliveries of the plane, which can seat 555 passengers in a three-class layout, would be limited to two or three in 2007. Oct 3, 2006

Airbus, EADS

Industry reports said EADS might look to trim production costs by consolidating A380 work in the southwest French city where Airbus is headquartered. It would concentrate work on the smaller A320 series at its factory in Hamburg, Germany. Goldman Sachs analyst Sash Tusa in a report last week said Airbus should also look to sell plants to help reverse some of the vertical integration which the A380 has only increased -- a step which rival Boeing has already taken. Formed through a merger of major aerospace players in Germany, France and Spain in 2000, EADS faces a delicate balancing act in how it divides its managerial power, jobs and technology -- something that could mean EADS finds it harder to reform than its US rival did. Its bid to cut jobs at loss-making maintenance unit Sogerma earlier this year saw French Prime Minister Dominique de Villepin wade in to save jobs. Oct 3, 2006

Airbus, EADS

EADS issued a short statement Friday saying the board would "continue this [A380] discussion in the near future." Airbus sources suggested to this website that the board did not endorse the extent of the restructure recommended by new Airbus CEO Christian Streiff. Sources also said that the board "wanted to gauge reaction from airline customers" to the revised delivery timetable. Oct 2, 2006 Airbus, EADS

Key customers were to be notified over the weekend of the full extent of the latest delivery delay for the A380. Two customers said that "we expect to have something to say Tuesday." On Sept. 21, EADS confirmed that the program faced further delays due to complex wiring issues. The board of EADS met in Amsterdam Friday to consider what is reported to be a far-reaching restructure of Airbus with transfer of more A380 assembly work to Toulouse and in the longer term more outsourcing of work beyond Europe. Oct 2, 2006

Airbus, EADS

Airbus A380 stories continue to be rife within the airline community with several very senior executives privately showing exasperation with the whole program. All do seem to agree that once the aircraft actually enters service the problems will be quickly forgotten except as one VP put it. "If there is a minor technical difficulty down the line there could be chaos. We don't have a back-up for 500 delayed passengers". EADS, the senior partner in the project, has confirmed more delays in the program and the planned delivery of the first aircraft to SIA before the end of the year looks increasingly unlikely. On the plus side a series of four trial passenger flights, for which Airbus employees took part in a draw, appear to have been a success, the longest no less than 15 hours. http://www.airbus.com Oct 2, 2006

Airbus, EADS

EADS To Unveil EUR2 Bln Airbus A380 Shakeup - Report. European aerospace group EADS will unveil restructuring measures this week aimed at saving EUR2 billion euros (USD$2.54 billion) a year after new delays in deliveries of its A380 superjumbo, a newspaper reported. The delays, discussed in a board meeting on Friday, are likely to cut EUR2 billion from the group's earnings by 2010, financial daily Les Echos said in an article on Monday, without quoting sources. The restructuring plan, which would come on top of a three-year EUR1.5 billion (USD$1.9 billion) savings plan launched in 2003, would involve a shakeup of industrial operations and assembly sites, increased use of external suppliers and the sale of sites judged non-strategic, the paper said. Les Echos said details of the plan would be presented to staff representatives on Wednesday. EADS, the world's second-largest aerospace group after Boeing has been hit by a series of crises over the past year, culminating in further delays to deliveries of the A380 superjumbo, which is now about 18 months behind schedule. The company, which called Friday's meeting to discuss a revised delivery schedule for the A380, is under pressure to present a clear picture of the future to ward off a further loss in confidence in its superjumbo. Oct 2, 2006

Airbus, Rolls-Royce

Rolls-Royce Suspends Work On A380 Engines. Rolls-Royce said on Friday it had suspended work on the Trent 900 engine for the Airbus A380 super-jumbo for about 12 months. The A380 is now not expected to start deliveries until the last quarter of 2007, two years late, as engineers work to fix problems in wiring the mammoth double-decker plane. He said the company did not expect immediate layoffs or any change in its financial guidance for the year. The Trent 900 makes up a small part of Rolls-Royce's annual turnover, which includes production and support for engines for several models of planes from Airbus, Boeing and other manufacturers. In addition to aircraft engines, Rolls-Royce manufactures ship engines and equipment used in the energy industry. Oct 6, 2006

BAE Systems, Airbus

BAE approves Airbus stake sale; manufacturer under fire. BAE Systems shareholders, as expected, voted in favor of management's plan to sell its 20% holding in Airbus to EADS for [euro]2.75 billion ($3.52 billion), making EADS the sole stakeholder, while lawmakers and labor unions warned Airbus that they may challenge the "Power8" restructuring plans outlined Tuesday to deliver [euro]2.1 billion in cost reductions and drive [euro]5 billion in cumulative cash savings by 2010. Oct 5, 2006

Boeing, Travel Service

Travel Service of the Czech Republic placed an order for two firm 737-900ERs plus two purchase rights, Boeing announced this week. The order is valued at $150 million at list prices and deliveries to the Prague-based carrier will commence in the fourth quarter of 2009. Travel Service operates a fleet of 10 737s including seven dash 800s, offering scheduled services through its Smart Wings brand and charter services to more than 230 destinations. Oct 5, 2006

Helios Airways 

The Helios Airways August 14, 2005, crash was the worst aviation disaster in Europe in 2005 and the worst on record for Greece or Cyprus. Communications Minister Haris Thrassou declined to comment on the report, saying the official findings of the investigation had not yet been given to the authorities. "I expect this should happen in the coming week," he said. Oct 6, 2006

Helios Airways, Boeing

Cyprus Helios Airways Crash Probe Blames Human Error - Report. Human error was the main cause of Cyprus's worst airline disaster, in which an aircraft crashed into a hillside north of Athens last year killing all 121 people on board, a Cypriot newspaper reported on Friday. Errors by ground and air crew were among eight factors logged by Greek investigators who are expected to hand the result of their official probe into the disaster to Greek and Cypriot authorities next week, the daily Phileleftheros said. Cypriot authorities declined to comment on the report. The crash was highly unusual because the Boeing 737-300, operated by Helios Airways on a Larnaca-Prague flight, flew on autopilot for two hours, its pilots slumped over the controls, before crashing into a Greek hillside when it ran out of fuel. Two Greek air force fighters were scrambled when the plane lost radio contact, and their pilots saw a flight attendant, apparently the only person still conscious on the plane, grappling with the controls before the aircraft crashed. A failure to switch the aircraft's decompression system to automatic from manual mode, by both technicians on the ground and the pilots themselves, triggered the sequence of events, Phileleftheros reported. The system regulates the oxygen supply, which therefore decreased as the aircraft gained altitude and rendered the pilots and passengers unconscious. Oct 6, 2006

Messier Services, Tyrolean Airways

Messier Services signed a five-year agreement with Tyrolean Airways covering landing gear overhaul and repair for Tyrolean's 12 Dash 8-300s. Oct 3, 2006

PrivatAir, Boeing

PrivatAir of Switzerland will take delivery of a 767-300ER in December and reconfigure it as a 56-seat luxury charter aircraft. It will be placed into service in April, replacing a 28-seat BBJ. Oct 5, 2006

Rolls-Royce, Monarch Airlines, Boeing

Rolls-Royce Signs USD$1 Bln Monarch Deal. British engine maker Rolls-Royce said on Thursday it had won an engine and maintenance deal from the UK's Monarch Airlines worth USD$1 billion at list prices. The Rolls-Royce Trent 1000 engines are to power Boeing 787 Dreamliner planes which Monarch has ordered, Rolls said in a statement to the London Stock Exchange. The planes are scheduled for delivery from 2010. Oct 5, 2006

Ryanair, Boeing

Ryanair Orders 32 Boeing 737s. Budget airline Ryanair ordered 32 Boeing 737-800s on Friday worth USD$2.25 billion at list prices for deliveries beginning in 2008. The orders are from options Ryanair held on buying the popular single-aisle planes. The airline has ordered 281 of the 737 airliner to date. Oct 2, 2006

Silverjet

Silverjet, a UK startup that will offer business-class service between London Luton and Newark, announced the acquisition of charter carrier Flyjet and aircraft lessor Skylease, for which it will pay a combined [pounds sterling]4-[pounds sterling]5.5 million ($7.5-$10.4 million) over three years depending on its performance. Flyjet provides an AOC and an operating license while Skylease offers immediate use of a 767-200. It also leases two 757-200s to tour operators through Flyjet. Silverjet said it will be ready to fly "within three to four months." It reached a 10-year, $37 million deal with Novus Aviation in September to sell and lease back two 767-200s acquired from Thomsonfly for delivery by March 31 and Oct. 31, 2007. It will launch with the Skylease aircraft. Oct 6, 2006

Editor: Aram Gesar, eMail: [e-mail]

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Oct 2, 2006