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Airbus delay lifts Boeing

Alisa Roth Jun 14, 2006

KAI RYSSDAL: Score one for Boeing. Shares in the plane maker jumped today after European rival Airbus anounced more delays for its new super-sized aircraft. From New York, Marketplace’s Alisa Roth has that story.

ALISA ROTH: Airbus says trouble customizing the planes and setting up complex wiring systems will delay delivery of its first A-380 for another 6 months. It’s the second time in a year that the world’s largest plane has been delayed.

Airbus still plans to finish the first one, for Singapore Airlines, by the end of the year. But it expects the backlog to last at least into 2009. But rival Boeing’s stock rose today. And Singapore Airlines put in an order for as many as 40 of the Boeing 787 Dreamliner aircraft.

Boeing analyst Cai von Rumohr says Singapore’s decision is probably just a coincidence.

CAI VON RUMOHR: I don’t think that even though they are upset with Airbus for being late on delivery, that they would have bought the 787 for that reason.

Plus, Airbus is the only company that makes anything like the A-380, so buying the 787 isn’t exactly a threat.

Consultant Wolfgang Demisch says the aircraft business tends to be cyclical, with fat and thin years coming about every decade. He worries that Airbus’s problems today could keep haunting the company for years to come. The company is losing money when it needs to be saving.

WOLFGANG DEMISCH: So you’re gonna be starving for resources to feed your engineering in the early part of the next decade and that’s really what people are concerned about.

Airbus says the delays will cost it as much as $2 billion in profit through 2010. It may have to pay penalties to airlines whose deliveries are put on hold.

In New York, I’m Alisa Roth for Marketplace.

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