The worst day of John Leahy's life, Airbus' chief salesman says, was facing Singapore Airlines executives and telling them that the very first A380 superjumbo -- already months behind schedule -- would be delayed yet again.
"They just looked at me," Leahy, the European planemaker's chief operating officer, said. "Fortunately they were speechless."
Better late than never has been the mantra, but Leahy may soon be able to breathe easier after today's handover of the much-ballyhooed but problem-ridden A380, a vital step in Airbus' efforts to recover from the vast troubles linked to the superjumbo.
Those delays have hurt more than just profits, denting Airbus' reputation and allowing US rival Boeing Co to sneak into the top sales spot last year. But Boeing itself announced a six-month delay this week to its hot-selling 787 Dreamliner, leaving the double-decker A380 -- at least temporarily -- to claim the limelight.
"The symbolism of the A380 delivery is important," said Pierre Boucheny of Kepler Securities. "What they need to do now is show they can deliver at a decent rhythm of around 40 planes a year."
At the glitzy delivery ceremony, speeches by Airbus' new CEO Thomas Enders and Singapore Airlines CEO Chew Choon Seng (周俊成), as well as John Rose, CEO of engine-maker Rolls Royce, will be followed by a sound and light show focused on the plane that has a list price of US$320 million.
Airlines usually negotiate large discounts and, as a first customer, Singapore Airlines got what Leahy described as a "good deal."
The A380's inaugural commercial flight has been set for Oct. 25 from Singapore to Sydney. Singapore Airlines has auctioned all seats on the first flight on eBay, raising about US$1.25 million for charity.
The flashy features of what Leahy calls a "cruise ship of the sky" may help visitors forget the difficulties of the past two years. But Enders warned in an interview that it was too early to celebrate the end of delays in the superjumbo program.
"The biggest challenges are really still ahead of us," Enders was quoted on Saturday as telling Der Spiegel magazine. "The A380 program will really only be over the hump when we succeed in accelerating production in the next two years as planned."
Enders said the company plans to deliver 13 of the jets in the next year and increase production to four per month by 2010.
Airbus has gone though five CEOs as multiple delays on the A380 program resulted in massive writeoffs and a restructuring plan which foresees 10,000 job cuts over four years, not to mention billions of euros in lost profit.
Morale has also been hurt by accusations that senior managers profited from knowledge about the A380's problems to cash in on share options.
A preliminary report by the French Financial Markets Authority suggests there was "massive insider trading" at Airbus' parent European Aeronautic Defence & Space Co.
Leahy admits to selling shares in 2005 and 2006, but says he is "sure there is nothing really behind" the allegations.
Another question is whether the A380 can turn a profit. Harald Liberge-Dondoux, aerospace analyst at Aurel Leven in Paris, reckons Airbus needs to sell 470 superjumbos just to break even.
Leahy said production will start at around 25-30 jets per year, ramping up to 45 by 2010. Already 16 customers have booked 189 orders or firm commitments and Leahy says that number may exceed 200 by the end of the year.
Over the A380's lifetime, Leahy predicts Airbus will sell "well over 800 planes" and is targeting every airline currently flying a Boeing 747.
"When this airplane is out flying, my marketing job will get a lot easier," he said, predicting that new orders would keep pace with production.
The company got a boost on Thursday with word that Airbus had signed a memorandum of understanding with Spanish tourism and transportation company Grupo Marsans to provide 61 aircraft, including four A380 superjumbos.
"It's unfortunate that it took us so long to build it, and its unfortunate that we ran over budget, but now that's behind us," Leahy said.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS