Airbus Sees A380 Sales Recovery After Deals Prolonged Slump

European Aeronautic, Defence & Space Co. expects demand for the Airbus SAS A380 superjumbo, the world’s biggest passenger jet, to recover after the global financial crisis and a manufacturing flaw crimped sales.

“While we cannot be happy with the sales level that we have today, I strongly believe that the A380 will recover,” EADS Chief Executive Officer Tom Enders said in Sydney today.

The Toulouse, France-based planemaker has open production slots as early as 2015 for the aircraft amid a protracted sales slump that saw the backlog dwindle to 148 A380s last month. Airbus, targeting the sale of 25 superjumbos this year, won a commitment for 20 A380s in June from lessor Doric even as Deutsche Lufthansa AG scrapped contracts for three last month.

Demand “was a bit impacted by the financial and economic crisis,” Enders said. Cracks in the planes’ wing structure that have required repairs also have set back bookings, he said.

EADS shares were trading 0.3 percent lower at 48.63 euros in Paris as of 10:41 a.m. The stock has advanced 65 percent this year.

Asian Demand

Sales of the A380 will pick up because there is a strong trend for ever larger aircraft, particularly in Asian countries and markets in the Middle East, Enders said in an interview with Bloomberg Television.

Photographer: Chris Ratcliffe/Bloomberg

An Airbus SAS A380 aircraft operated by British Airways performs in a flying display on the second day of the Paris Air Show in Paris. Close

An Airbus SAS A380 aircraft operated by British Airways performs in a flying display on... Read More

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Photographer: Chris Ratcliffe/Bloomberg

An Airbus SAS A380 aircraft operated by British Airways performs in a flying display on the second day of the Paris Air Show in Paris.

“There’s quite a lot of potential,” he said.

Airbus said last month there was demand for 1,334 A380-sized passenger aircraft in the next two decades. Boeing Co. (BA) sees a need for only 760 units and has slowed output for the rival 747-8 jumbo jet amid slow sales.

Newer models from Airbus and Boeing Co., which is working on a 400-seat version of its popular 777 long-rang jet mean the economics of the A380 need further improvement, Tom Williams, Airbus executive vice president for programs, said in June.

The A380’s size, which most carriers have configured to carry fewer than 525 passengers, means airlines have to push harder to make flights profitable, Williams had said. Airbus has begun talks with airlines about an 11-abreast seat configuration in economy class on the A380 to improve economics. The A380 has an average list price of $403.9 million.

Airbus, the world’s second-largest planemaker, surpassed its 1,000-order annual sales target with three months to spare. The company won 1,112 orders in the first nine months before cancellations after securing deals for 170 planes in September alone. Boeing said Oct. 3 it had booked 1,023 gross orders.

Photographer: Angel Navarrete/Bloomberg

European Aeronautic, Defence & Space Co. Chief Executive Officer Tom Enders said, “While we cannot be happy with the sales level that we have today, I strongly believe that the 380 will recover.” Close

European Aeronautic, Defence & Space Co. Chief Executive Officer Tom Enders said,... Read More

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Photographer: Angel Navarrete/Bloomberg

European Aeronautic, Defence & Space Co. Chief Executive Officer Tom Enders said, “While we cannot be happy with the sales level that we have today, I strongly believe that the 380 will recover.”

The European planemaker has exceeded 1,000 orders only four times in its history, setting a record total in 2011, when it secured 1,608 gross sales.

EADS booked 820 million euros ($1.1 billion) in charges last year, with the wing-rib fixes on the A380 consuming 522 million euros. The A380, which entered service in October 2007 through Singapore Airlines Ltd. (SIA), also suffered a blow in 2010 following an engine explosion on a Qantas Airways Ltd. (QAN) superjumbo. The Sydney-based carrier grounded its fleet of A380s for more than three weeks following the accident.

To contact the reporters on this story: David Fickling in Sydney at dfickling@bloomberg.net; Rishaad Salamat in London at rishaad@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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