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Thu 4 Nov 2010 05:17 PM

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Qantas A380 incident poses Airbus cost challenge

Airbus can ill afford setbacks in sales of the A380, a plane which cost $17bn

Qantas A380 incident poses Airbus cost challenge
The A380 is key to Airbus growth plans in the worlds fastest-growing markets, including China and the Gulf. (Bloomberg Images)

An engine failure that forced the emergency landing of a A380 superjumbo jet in Singapore on Thursday could further delay manufacturer Airbus's bid to claw back the plane's hefty development costs.

Airbus can ill afford setbacks in sales of the A380, a plane which cost 12 billion euros ($17bn) to develop but has failed to attract airlines in some key markets including the United States and Japan.

A380 orders slowed to just four last year from a peak of 85 in 2001.

Concerns triggered by the emergency landing hit shares in Airbus parent EADS and Rolls-Royce  maker of the engine involved.

EADS was down 2.9 percent at 18.465 euros in Paris and Rolls-Royce down 3.8 percent at 629.5 pence on London's FTSE 100 as of 1100 GMT.

Howard Wheeldon, senior strategist at brokerage BGC Partners in London, said the fire reported soon after take-off in one of the plane's four engines could mean it hit birds or collected debris, cautioning against assigning blame just yet.

"Until the investigation is properly done we will not know whether it is a defined engine fault or if the explosion was caused by a malfunction of a part within the engine or outside interference such as a bird strike or debris.

"It could also be a maintenance-related issue," he said.

Australia's Qantas, operator of the plane which landed safely with 459 aboard on Thursday, has never suffered a fatal accident and said it was grounding all six of its A380s as a precaution.

Wheeldon noted as significant the fact that other carriers were still flying the plane.

Those airlines include top A380 customer Emirates; Singapore Airlines, which said that it was closely assessing the situation; and Lufthansa.

Qantas said the incident did not affect its standing orders for more A380s, of which just 37 are in operation with airlines worldwide, according to Airbus.

The A380 is key to Airbus growth plans in the world's fastest-growing markets, including China and the Gulf. Airbus developed it in hopes of attracting customers looking for aircraft even larger than Boeing's ageing 747 jumbo.

Yet EADS posted losses on several of the first ones delivered, squeezed by higher-than-expected costs, late fees and discounted prices.


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Love Bug 9 years ago

I fly millions of miles and always have confidence in Boeing. Airbus aircraft seem to lack quality and substandard compared to Boeing. Take flight in a A319, A320, A330 and compare to B767-200, 300, 400, B737, B747, and even MD80's. The hydraulic noises are unbelievable and I wonder if the CEO of DL, UA, and US Airways have taken a test drive before purchasing.

Ex-Expat 9 years ago

Love Bug, do you believe the nonsense you talk?
Ever hear about 'fly by wire'? Learn, then talk.

The Safety Inspector 9 years ago

Whilst I have every confidence in both aircraft manufacturers and the engines used, my concern still lies in the engine oils used on ALL jet aircraft. The contain toxins that can lead to very serious health problems from every flight. This very real as I know several people in the airlines who have lost their health and their jobs as a result of this!
Time for the airlines and oil companies to address this!

Joe 9 years ago

Your article seems to ignore that the problem is with Rolls-Royce jet engines and not with the with the A380. The A380s' using Engine Alliance jet engines have no problems to date.

gordon 9 years ago

I doubt if the pilot that landed the airbus on the Hudson so smoothly could have done it with a Boeing.

The airbus computers made it land perfectly, all the pilot had to do was point it in the right direction.