EADS hit by Airbus wing cracks
Airbus parent EADS took a charge of 158m euros for the cost of overcoming wing cracks on the A380 superjumbo as it posted better-than-expected first-quarter results on Wednesday buoyed by resilient aircraft and helicopter demand.
The move, following 105m euros (£83m) covered by an existing warranty provision, reflects efforts by Europe’s leading aerospace group to draw a line under the episode in balance sheet terms but leaves Airbus facing a potential drag on operating profit for the next two years.
The cracks on a handful of fixing brackets inside the aircraft’s wings were first discovered in January and were blamed on a combination of manufacturing flaws and the choice of materials.
Authorities ordered checks on the superjumbo fleet, but said the A380, in service since 2007, is safe to fly.
Airbus said on Wednesday it had come up with a retrofit that would provide a long-term solution to the problem. But it said this was more complicated than first thought and went beyond the amount normally set aside for repairs under warranty.
Applying the fix to aircraft still in production will weigh on efforts to reduce A380 operating losses in 2012 and 2013 but should not derail the target of breaking even on the plane “by the beginning of 2015”, EADS said in a statement.