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A380 repair bill weighs down EADS profits

written by australianaviation.com.au | May 21, 2012

EADS spent 158 million euros fixing wing cracks in A380s, the company has disclosed. (Airbus)

Airbus parent EADS spent 158 million euros (A$205m) fixing wing cracks in A380 superjumbo jets during the first quarter of the year, throwing a wrench in its plans to improve the program’s profitability.

Despite the massive repair bill and the wider economic troubles in Europe, however, EADS still reported healthy first-quarter profits of 133 million euros. Revenues climbed 16 per cent from the same period last year to 11.4 billion euros, driven in part by healthy deliveries of commercial aircraft. Airbus has said it expects to deliver about 570 aircraft this year, up from 534 last year.

“Demand for commercial aircraft and civil helicopters remains healthy and our institutional business fared reasonably well despite European budget pressures and an uncertain economic environment,” said Louis Gallois, CEO of EADS, which also includes Eurocopter.

Still, EADS acknowledged that its target of delivering 30 A380s this year has been made “more challenging” by the wing cracks. First discovered late last year, the hairline cracks on brackets connecting metal ribs to the wing’s interior have since been found in virtually the entire global A380 fleet, including those operated by Qantas.

Airbus says the cracks do not pose a safety risk, but the European air safety regulator has ordered inspections of all A380s. EADS said the 158 million euro first-quarter repair bill would be a one-off expense representing a permanent fix to the problem.

Airbus delivered four of the 525-seat double deckers in the first quarter, bringing the global fleet to 71.

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