Airbus Earnings Hit By A380 Wing Cracks

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Airbus is taking another €158 million charge linked to the costs associated with wing component cracking on its A380s.

That comes on top of a €105 million charge taken in March against 2011 results because of the same problem. “This final retrofit fix is more complex than initially anticipated in March; therefore, the group updated the cost for the retrofit solution leading to an additional charge of € 158 million in the first quarter,” Airbus parent EADS says in releasing its latest results.

The issue was initially caused by a flaw in its production set-up that imparted too much stress on some of the L-shaped wing rib-feet, causing them to crack. As a result, the European Aviation Safety Agency issued an airworthiness directive that forced A380s to be grounded as an interim fix was installed.

The aircraft maker says, also, that it now has determined the final fix to stop some of the wing rib-feet from cracking. EASA still has to sign off on the fix. That will then trigger another airworthiness directive to direct operators to implement the fix. When the fix will be certified is still to be determined, as is when repair kits will be available, EADS CFO Hans-Peter Ring says.

Qatar Airways, for instance, has said it will only take A380s once the final fix is installed on its aircraft -- the first handover to the Middle East carrier is due next year.

The fix also has hit A380 delivery plans. Airbus has temporarily slowed A380 production, but the impact of that move is not expected to be seen until 2013.

For this year, the aircraft maker expects to hand over 30 A380s. But Airbus CFO Harald Wilhelm warns achieving that target "is becoming more challenging with a more backloaded delivery pattern."

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