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Wednesday, November 1, 2006

Airbus A380 Delay May Impact MROs

By Thierry Dubois

The 18- to 24-month delay in the deliveries of the Airbus A380 will certainly impact maintenance, repair and overhaul (MRO) service providers but the extent is still undetermined. Lufthansa Technik (LHT), Air France Industries and Emirates are among the companies who have invested in MRO hardware for the super jumbo. All firms promised the financial impact will be limited, but none gave figures.

Emirates, the largest customer of the double-decker, with 43 orders, is in the final phase of building eight dedicated hangars at its Dubai airport base. "They are almost ready to use," Jean-Luc Grillet, the airline's manager for Belgium, France, Luxembourg and the Netherlands, told Aviation Maintenance. He added that the financial translation of the delay should be limited to the underutilization of the facilities. However, he said, these hangars should be made available for other aircraft types in Emirates' fleet.

Air France Industries (AFI) had also launched the construction of A380 maintenance hangars at its base. In Paris Charles-de-Gaulle (CDG) airport, fabric works are well underway. Asked what the financial consequences of the delay in operating these hangars will be, an AFI spokeswoman had no comment. In Paris Orly airport, the Air France subsidiary is setting up a facility for supporting the GP7200 engine - one of the engine options on the A380. No significant parts or equipment order has been placed, the spokeswoman insisted.

With European archrival LHT, AFI is forming a company for A380 component support. Dubbed Spairliners, the 50-50 joint venture was targeting early 2007 for start of operations. The idea was to be ready for the entry into service of the A380 with early customers such as Singapore Airlines.

"Investment in Spairliners has been marginal so far. Focus has been on organization and processes," the AFI spokeswoman told AM. Her LHT counterpart expects "no financial impact" of Spairliners. The German flag carrier's maintenance arm is building an A380 maintenance base in Frankfurt. Ground breaking took place in September. The spokesman said the construction schedule remains unchanged. "These hangars will be useful for other aircraft types, either from Lufthansa's fleet or from customers under line maintenance contracts," he asserted.

Separately, the so-called N3 engine MRO facility, a joint venture with Rolls-Royce, is under construction in Arnstadt, Germany. N3 will service Airbus long-haul airplane Trent engines. "We are not planning to slow the ramp-up," the spokesman said.

The overall impact on LHT is pledged to be minimal. The spokesman even emphasized a silverlining in the delivery delay "We will be better prepared at entry into service," he said. Nevertheless, parent company Lufthansa is expected to ask Airbus for offsets to the delay.

Analysts will now watch for A380 delay provisions in 2006 financial reports.