European planemaker Airbus will make one fewer A380 superjumbo aircraft than planned in 2009 after agreeing to push a delivery into 2010, reminding investors of challenges facing Europe's largest industrial venture.
Airbus cut its 2009 delivery target on Tuesday from the most recent target of 14, as reported by Reuters. A spokesman said it would still deliver over 20 A380s next year.
Separately, Belgium's defense minister, Pieter De Crem, said everything pointed to a deal on Europe's largest defense project, the delayed Airbus A400M military transport, being reached by year-end as planned.
Also on Tuesday, global airlines body IATA said passenger traffic was recovering from the global recession but the industry remained far from a return to profit.
Shares in Airbus parent EADS , Europe's largest aerospace group, were down 0.9 percent at 155.01 euros at mid-session.
A380 production targets have been revised down repeatedly since wiring installation flaws were exposed in 2006, leading to a crisis from which Franco-German-Spanish EADS is recovering.
This time the impetus for the delay appeared to come from the buyer, but analysts said it stoked up lingering fears Airbus may not have eliminated all the gremlins that have cost it a total of more than two years of A380 production.
Paris brokerage Oddo Securities said in a note that EADS, already facing a potential major provision for the A400M, might be forced to take a further charge this year for ongoing A380 production problems.
The delivery of one fewer aircraft in 2009 has a margin revenue impact and is almost invisible at EADS operating income level but this delay puts Airbus execution risks back in focus.
Singapore Airines is one of three carriers operating the world's largest airliner, which sells for $327 million at list prices. The airline said this month it wanted to delay a total of eight future A380 deliveries, becoming the latest airline to push back new aircraft in the face of a slump in travel.
EADS chief executive Louis Gallois told Reuters on Monday this could result in one plane slipping to 2010.
He described as a non-event an incident in which a Singapore Airlines A380 turned back to Paris after one of its four Rolls-Royce engines failed on Sunday
ENTERING WAVE 2
The 525-seat superjumbo has dazzled aviation enthusiasts but provided a turbulent ride for EADS investors.
EADS shares have risen 25 percent this year, outperforming the Paris market's blue-chip index <.FCHI> by 5 percent.
But the company saw a quarter wiped off its market value in June 2006 after it was found that bundles of wiring made in Germany did not fit into planes being assembled in France.
The tantalizingly small wiring gaps forced Airbus to transfer 2,000 German workers to Toulouse to help install the 500 km of wiring on each of the first 25 planes by hand.
Company officials said 1,000 of those workers were still in Toulouse and a few hundred will stay permanently as part of a normal re-assignment process among Airbus's 55,000 staff.
Now, financial analysts are watching closely as Airbus shifts into a second automated production phase known as Wave 2. Its success will determine how quickly the A380 makes a profit.
We have just recently delivered the first Wave 2 aircraft and the second will follow very soon, Airbus spokesman Stefan Schaffrath said.
Production is heading toward two per month, he said.
(Additional reporting by Sven Egenter; Editing by Dan Lalor)