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Aviation History
2001
2001 - 0017.PDF
Lufthansa closes on A380 deal JULIAN MOXON AND ANDREW DOYLE/TOULOUSE RAMON LOPEZ/WASHINGTON DC LUFTHANSA IS preparing to add its name to the Airbus A3 80 customer list following the 19 December decision by the manufacturer's supervisory board to industrially launch the airliner formally known as the A3 XX. The launch is meanwhile set to spark a trade war with the USA unless the aircraft's backers can convince Washington that devel opment is not illegally subsidised. The German flag-carrier is understood to be looking at order ing a mix of A3 80 passenger and freighter versions and industry sources say a deal could be finalised during the first quarter. "We see a need for a large aircraft from roughly 2007-2008 which could be used for daily flights from Frankfurt to New Delhi, New York, Tokyo and Singapore," says Lufthansa, adding that it is still studying Boeing's pro posed 747X development. "We do have time," the airline says. "We are such a good customer of Airbus and Boeing that we do not have to cling to a certain date for launch customer discounts." The A3 80 could be heading for a turbulant ride amid a US/EUfunding row Prompted by Boeing the Clinton Administration has been threatening action over A3 80 gov ernment launch aid for several months as the four Airbus govern ments of France,Germany, the UK and Spain committed to providing reimburseable advances for €2.3 billion ($2.14 billion) of the $10.7 billion development costs, to be repaid over 17 years. Tension over a potential dispute was heightened just 24 hours prior to launch approval with President Clinton raising die issue at a US- EU economic summit held in Washington. He warned the EU that a trade fight could erupt over European ''subsidies" for aircraft development. The USA could file a complaint against the EU with the World Trade Organisation (WTO) if the four nations proceed with their finance plans. Boeing says the deal includes debt forgiveness and below-market interest rates on government loans, violating a 1992 US-EU agreement on aircraft subsidies, and a 1994 WTO sub sidy code requiring loans be made on a commercial basis. The European Commission (EC) rejects "completely" the US administration's criticism of the loan conditions, saying that the government funding is in the form of repayable loans, not subsidies. It insists that the funding "conforms to the 1992 agreement on subsidies to the aeronautics industry. If the USA decides to initiate a procedure against the European Union, the Commission will not hesitate to propose that the Council of Minis ters take in response similar mea sures against the indirect subsidies which benefit Boeing through its contracts with NASA and the Pentagon". The EC says, however, that the incoming Bush Administration will have to take account of the 22,000 employees in the US equip ment industry that will benefit from the A3 80 programme. Airbus chief executive Noel Forgeard says "We are in strict compliance" with the 1992 agreement, which allows 3 3 % of direct subsidy and up to 4% of indirect. Deputy US Trade Represent ative, Susan Esserman has had preliminary and "cordial" talks with senior EU trade official Peter Carl during the recent summit. She formally raised the issue with the USA and EU, agreeing to resume talks on 11 January. Esser man says that "the terms of the gov ernment financing are not set yet, which is all the more reason to dis cuss the issue now, given its impor tance. We need to resolve it to avoid a problem." • Airbus tries new marketing approach with A380 designations THE FULL go-ahead for the A3 80 passenger model, with the backing of commitments from six customers for 48 orders, sees the 555-seat passenger ver sion designated the A3 80-800. A formal go-ahead for the -800F cargo variant, for which Emirates has placed two firm commit ments (of its seven), has been delayed until the firm orderbook can be increased to 10-15 aircraft. Airbus expects to sign at least two more A380F customers "during the next few weeks". Airbus chief executive Noel Forgeard says the A3 80 designa tor was chosen after a "long debate" as the "8 suggests double- decks, one on top of the other". Other planned members of the A3 80 family include a 656-seat stretch and 480-seat reduced capacity version, to be known respectively as the A3 80-900 and -700. A longer-range version of the basic variant will be the -800R. Airbus says these will be launched when it identifies suffi cient market demand. The -700/800/900 suffixes reflect a first-time commitment to airlines that the three models will be "fully developed aircraft" atservice-entryandnotsubjectto the introduction of incremental performance enhancements which previously saw the initial version become quickly dated. "We have done this in order not to affect residual values," says Airbus chief commercial officer, John Leahy. EADS co-chairman Manfred Bischoff believes there is a market for750A380sinthenext 15years. "We expect to break even at 2 50, and to see a return in 2011". Most, if not all, of the present 50 firm A3 80 commitments are expected to be converted to the firm orders backlog in the next few weeks. Launch customers are Emirates, Air France, ILFC, Singapore Airlines (SIA), Qantas and Virgin, which have benefited from a 3 0% discount on the A3 80 catalogue price of $230 million. Philippe Jarry, vice-president, development, large commercial aircraft, says "there are some more [launch customers] in the pipeline whom we've made pro posals to who are ready to sign in January". He adds: "We'll proba bly say OK to them as well - its in the business case." The A3 80 is scheduled to make its maiden flight during the fourth quarter of 2004, and enter service with SIA in March 2006. The Rolls-Royce Trent 900, already selected by SIA, Virgin and ILFC, will be the lead certifi cation engine. It will be followed by the rival Pratt & Whitney- General Electric Engine Alliance GP7200. The freighter is due to enter service in 2008. • See A3 80 cutaway P66 FLIGHT INTERNATIONAL 2 - 8 January 2001 15
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