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Tue 29 Apr 2008 04:08 PM

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Mideast airlines face further A380 delay

Airbus carrying out major review of delivery targets for superjumbo, CEO Tom Enders says.

European aircraft maker Airbus is carrying out a major review of delivery targets for the A380 superjumbo and might meet them, its chief said on Tuesday, raising the possibility of further delays.

"I am currently conducting a major review of the ramp up plan," Chief Executive Tom Enders told reporters in the UAE.

"We are conducting a review right now, [it] might well be that we achieve that," he said in response to a question on whether Airbus would achieve its delivery targets.

Airbus' targets called for 13 deliveries of the world's biggest passenger aircraft in 2008 and 25 in 2009.

"This is a very steep ramp up and this is something one always needs to be concerned about," he said, calling it a "difficult subject".

An Airbus spokesman quickly dampened speculation of further delivery delays, telling newswire Reuters after Enders' comments: "We are confident of achieving our delivery target."

Emirates airline President Tim Clark told reporters he was confident of taking delivery of four A380s by the end of 2008 and another by next March. Dubai-based Emirates has ordered 58 A380s, making it the single largest customer for the jetliner.

Enders said the company had a limited ability to save money by cutting jobs because it needs staff to meet its delivery obligations. Airbus has already announced plans to slash 10,000 jobs and sell plants to restore its competitiveness.

"At a time of ramp up, cutting jobs has its limits so we are thinking seriously about structural measures," he said.

Enders said it might consider offshoring "major parts of the work in manufacturing as well as engineering because the cost is a very serious problem for us with the dollar at $1.50 to $1.60 [against the euro]."

Airbus incurs most of its production costs in euros but sells its aircraft in dollars, putting it at a disadvantage to US rival Boeing.

But the challenge to off-shoring, he said, was in finding "high quality and trained personnel" to ensure standards are maintained. Enders also noted that meeting its targets also required suppliers to come through.

"The industry has multiple supplier problems and stuff like that obviously has to be taken into consideration as well," he added on Tuesday. "There will be no miracles." (Reuters)

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