Econ 101b: Fall 2006: October 5, 2006 Lecture Notes
Eddie Lazear and Rob Portman Try to Communicate

Airbus Delays New Jumbo Jet a Second Time

Has Airbus's nationally-balanced structure made it more difficult to manage?

Airbus Delays New Jumbo Jet a Second Time - New York Times: By NICOLA CLARK, International Herald Tribune

The first deliveries of Airbus's troubled A380 super jumbo jet were delayed again today, this time by as much as another year, pushing the program off by a full two years.

European Aeronautic Defense and Space, the parent company of Airbus, confirmed the delays and warned that persistent assembly-line problems would shave earnings over the next four years by 4.8 billion euros -- more than double the amount forecast in June.

And for the first time since the latest problems surfaced three months ago, Emirates, the largest customer for the A380 plane, signaled publicly that it might cancel a portion of its multibillion-dollar order from Airbus.

The EADS board also said that it would investigate the conduct of individual managers at EADS, the European alliance of the governments of France, Germany and Spain that controls Airbus. EADS said it would also examine the actions of managers at Airbus itself during the period preceding the announcement in June of the first A380 delays. It said it was reserving the right to pursue legal action against managers.

"Shareholders have lost billions of dollars," the EADS chief executive, Tom Enders, said. "This is very serious. We are not excluding anything."

In separate statements, EADS and Airbus said that just one A380 would be delivered next year, to Singapore Airlines in October, down from nine that had been promised in June. Thirteen planes will be delivered in 2008 and 25 in 2009, while 45 planes will be delivered in 2010, the companies said...

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