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EADS warns on having to write off Airbus A350 design and late delivery costs

By Helen Massy-Beresford in London

EADS has warned that it faces having to write off costs relating to the redesign and late delivery of the A350 widebody family

Announcing a "solid" set of half-year results last week, EADS said that, following the high-profile relaunch of the twinjet as the A350 XWB, it will have to deal with the consequences of the redesign and service-entry delay for some time. The A350 XWB is not expected to be industrially launched until October, despite attracting 100 firm orders and a further 82 commitments in its earlier incarnation. Service entry has been pushed back from late 2010 to mid-2012.

After industrial launch, EADS says it "will have to assess the costs and benefits related to previously signed A350 contracts, which may result in non-recurring charges".

EADS insists the orders already booked for the A350 still form part of its order backlog. However, some customers have said they are unwilling to pay more for the aircraft (Flight International, 25-31 July). EADS confirms that negotiations with customers to determine new prices and delivery dates in the light of the relaunch will take place in a "fairly rapid process".

"We're not striking 100 out of the backlog - although I suppose one or two customers might give up their delivery slots," says EADS.

Analyst Sandy Morris of ABN Amro agrees the company is likely to hang on to most of its orders for the aircraft. "If the 787 wasn't your thing, you should still be pleased with the A350 XWB," he says.

Meanwhile, EADS foresees the possibility of further charges related to A380 delivery delays. "The EADS review of the A380 engineering, development and ramp-up schedule including possible consequences on other programmes may also lead to the recognition of further expenses," it says.

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