Airbus is expecting one-off charges to implement a retrofit solution to the A380 wing-rib cracking problem to reach €260 million ($330 million) over 2012.
The airframer's parent, EADS, revealed in its first-quarter results that it had already taken a €158 million charge relating to fixing 71 in-service A380s - a fix which, it says, is "more complex" than originally anticipated in March this year.
"This charge is now treated as a one-off since the anticipated retrofit costs go beyond the recurring warranty levels," it adds.
But the company is still expecting to deliver 30 A380s this year. EADS will continue to treat the matter on a one-off charge basis.
Based on the projected deliveries the total charge over the year, says EADS, could reach about €260 million.
The A380 delivery schedule for 2012 is "becoming more challenging" because the delivery pattern has become "more back-loaded", says EADS, admitting that it had expected to hand over more than the four A380s delivered in the first quarter.
EADS says the final wing-fix solution was finalised over the "last few days" and discussions are taking place with certification authorities.
Once the changes secure approval from the European Aviation Safety Agency, implementation of the retrofit will begin towards the end of this year with initial deliveries in 2013.
But while implementation of the line-fit solution will take place around the same time, the lead times mean that the first A380s with the line-fit fix will be delivered in 2014.
"Implementation in production of the final fix will temporarily generate headwind on the year-on-year A380 [earnings] improvement in 2012 and 2013 to account for non-recurring costs and delivery adjustments," says EADS.
"General discussions are on-going with customers. However, this should not jeopardise the reaching of [A380] break-even by the beginning of 2015."
Source: Air Transport Intelligence news