Production delays hit airlines

The region's big three carriers are heading for a fresh round of uncertainty amid production delays.

Late arrival: The news that Emirates would have to wait an extra month for its second A380 tempered the optimism at the company.

ABU DHABI // A fresh round of uncertainties is headed towards the region's big three carriers - Emirates, Etihad Airways and Qatar Airways - as new production delays surface at the world's biggest aircraft manufacturers, Airbus and Boeing. This month's optimism at Emirates, after receiving its first superjumbo A380 from Airbus, plus two new Boeing long haul 777s, has been tempered by news that the second A380 will not be delivered in September, as expected.

Instead the second double-decker aircraft may not join the Emirates fleet until Oct 20, trade magazines have reported, making for a delay of nearly two months. Emirates had planned on having the second A380 join its first delivery on the non-stop Dubai to New York's JFK route - which would have created the first daily A380 service to the US. "The delivery of our second A380 aircraft will be pushed back by a few weeks. Discussions are underway with Airbus regarding the delivery date," the airline said.

The situation has been attributed to delays from Airbus suppliers in delivering interior outfitting. They add to a long list of challenges at Airbus in living up to its aggressive delivery schedule of the A380. The company had intended to make up for lost ground after its earlier 22-month production delay. Airbus maintains it will still be able to deliver another seven A380s to customers before the end of this year.

Gulf airlines spent the better part of the past two years waiting for production delays at Boeing and Airbus to resolve themselves. With wide-bodied aircraft in tight supply, the airlines had no other option but to scale back their plans to expand and win market share over the established long haul airlines in Asia and Europe. Emirates has ordered 58 A380s, the most of any airline, and expects to receive its first five by March next year.

The other top Gulf long-haul carriers, which also use their Middle East hubs to serve traffic between eastern and western destinations such as the popular Europe to Australia route, are also customers of the US$300 million (Dh1.1billion) A380, the largest commercial aircraft in the world. Qatar expects to receive its five A380s starting in 2011 after a two-year delay, while Etihad is scheduled to begin flying the first of its 10 A380s in 2013.

The Gulf's big three carriers have also placed billions of dollars of orders with Boeing, particularly its long-range 777 and 787 Dreamliner models. But a companywide strike affecting all production lines looms if its 28,000-strong union of machinists rejects management's latest contract offer. Union members are scheduled to vote on Wednesday. If the strike resolution passes with a two-thirds vote then a strike will begin that night, leading to a shutdown at the company's jet-assembly plants in Washington state. The last time a strike occurred, in 2005, Boeing was forced to halt commercial aeroplane production for four weeks.

Emirates, which has 39 additional 777s worth $10bn on order and expects to receive at least one a month for the foreseeable future, could be affected by a Boeing labour strike. However, a spokesman said Boeing had not officially informed the airline of any potential delivery disruptions. Such notification is required if a delay appears certain. Qatar Airways had been looking forward to becoming the first Gulf airline to receive the much-vaunted midsized 787 Dreamliner, the fastest-selling aircraft ever. That production line has also suffered from a two-year delay, and could be pushed back further if Boeing's union follows through with its strike plans.

Etihad would be less affected by disruptions at Boeing, as its 787 orders would not be delivered until 2015. But a strike could push back deliveries of the 777s it expects to arrive beginning in 2011. [e-mail]