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Tuesday, September 05, 2006

Airbus Stumbles, Does Boeing Get A Break?

Reuters reports that Airbus has replaced the head of its super-jumbo Airbus 380. The news service reports that problems with the plane have cost 2 billion euros.

Boeing has had problems of its own. After announcing poor earnings due to late products and a settlement with the government over fraud charges on an Air Force contract, Boeing disclosed troubles with its own big jet project

However, in the mid-sized jet market, the new 787 has orders totaling 350 compared to 100 for the new Airbus 350.

Boeing has been hurt by questions about its C-17 military transport, which the company said it will cancel, and the ongoing investigation of an Air Force contract which has already cost the company over $600 million in settlement costs with the government. Boeing also lost the chance to build the next manned space capsule when Lockheed got the contract for the project. Boeing announced at $3 billion stock buyback recently, but the stock was not helped much by the news. The stock trades just above $75, down from its 52-week high of almost $90.

If the news that the head of the Airbus super-jumbo program is an indication that the 380 is facing more problems, it may give Boeing a chance to sell more of its new 747 stretched version.

Boeing shareholders need the relief.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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