Airbus feels the pressure of A350

Tom Enders settled into the pilot seat of a helicopter, before taking the chopper through the skies of northern Germany on its 20-minute flight to Hamburg.

"It's going to be a hellish ride," the German Airbus CEO had told a crowd at a jet component factory on Aug. 31 before taking off. Luckily for his three passengers, Enders wasn't talking about his skills as a pilot.

Rather, the source of his concern is the new A350 wide-body jet being created under increasing time pressure at factories across Europe. Enders has reason to navigate with caution, as he tries to avoid the delays that dogged the world's largest aircraft maker and rival Boeing on recent programs. Boeing is almost three years behind on its 787 Dreamliner, a plane built from composites that inspired Airbus to respond with the A350.

Shepherding the A350 to its first delivery in 2013 would hand Enders his best chance yet to blunt Boeing's dominance in wide-body jets, a segment that makes up 40 percent of the $70 billion commercial aircraft market. The A350 would cement his standing with Airbus parent European Aeronautic Defence and Space Co. at a time when CEO Louis Gallois prepares to retire by 2012.

"It's the make-or-break project for Enders," said Horst Niehus, co-chairman of Airbus Europe's employee council and council works chairman at Hamburg, the center of German operations. "If he pulls it off, then nobody can stop him."

Much of Enders' leadership since he took over Airbus in 2007 has been an exercise in troubleshooting. Both the A380 superjumbo, years behind schedule and billions of euros over budget, and the delayed A400M military transport were brainchildren of Frenchman Noel Forgeard, who ran Airbus from 1998 to 2005 before becoming EADS co-CEO along with Enders.

EADS fired Forgeard in 2007 following the delays on the A380, and Enders moved down one rank to take over Airbus, while the EADS top job went to Frenchman Gallois, now 66. Enders, 51, joined EADS in 2000 when the company was created, and led the defense unit until he took charge of the entire company with Forgeard five years later.

Enders tackled the A380 delays by integrating French and German engineering teams and giving them identical design software, allowing Airbus to turn over at least 20 A380s this year, twice the figure from 2009. On the A400M, he brought management of the military transport from Spain under his control in Toulouse, and coaxed the seven government customers into an agreement to share the burden of cost overruns.

"This is about learning lessons from our mistakes in the past, from the competitors," said Enders. "But lessons learned are only one side of the coin. The other side is anticipating new problems, and that relates to the new technological challenges."

From aluminum to composites

Boeing forced Airbus' hand on the A350. When the U.S. maker unveiled plans for its 787 with a structure largely made of composites, Airbus tried to counter by hanging new engines on its existing A330. Airlines balked, and it took Airbus two years until carriers backed its concept of the all-new A350.

The 787 and A350 have much in common. Both manufacturers use carbon-fiber composites for more than 50 percent of the structure, a departure from traditional reliance on aluminum. Composites, made from petroleum-based products filled with epoxy resin and then cooked, are four times stronger than aluminum, and considerably lighter, making them attractive to jetmakers.

The two aircraft makers opted for different approaches constructing their jets' fuselage, which are traditionally built in panel sections over a skeleton. Boeing departed from that method by building large barrel sections with no internal structure. Airbus kept the traditional concept on the A350, arguing that the structure is more flexible to adapt.

Airbus may have some other advantages. While Boeing's last all-new plane, the 777 wide-body, was designed in the early 1990s, Airbus' most recent model, the A380, was designed earlier this decade. That will allow Airbus to use and improve upon many of the systems and innovations used in that plane, said Yan Derocles, an analyst at Oddo Securities in Paris.

Airbus has taken the move from metal to carbon-fiber more gradually than Boeing. The A380 was 25 percent made from composites, up from 15 percent on the A340-600 jet. Boeing jumped from 15 percent on its 777 to more than 50 percent on the 787, giving it a steeper learning curve.

Learning from Boeing

To limit its own investment on the $13 billion model, Airbus has given risk-sharing partners 53 percent of the A350 work, while keeping processes such as wing design and building largely in-house. Boeing, by contrast, moved 70 percent of 787 work to suppliers, including the wing to Japan, a move that contributed to some of the delays on the jet when parts delivered by partners didn't meet specifications.

"Airbus has probably learned a lot from what Boeing has done with the 787," said Gary Chapman, president of Emirates Group Services and Data, whose airline unit has 70 A350s on order. "These new programs are fraught with challenges."

Airbus has secured 535 orders from 33 customers for the A350, compared with 847 for the 787. The largest variant of the A350, the A350-1000, will challenge Boeing's popular 777, and the U.S. planemaker is considering improvements to protect its market. The A350 will seat about 260 to 350 passengers, depending on the configuration, compared with as many as 290 on the 787, slated for service in early 2011.

Enders maintains that the A350 program is largely on track for first delivery to Qatar Airways Ltd. in mid-2013, even after a three-month delay in the design process that forced Airbus to shorten a flight test schedule to nine months from 12.

Airbus completed the design phase in July and started production last month. Among challenges it needs to tackle is the plane's weight, according to Enders. Airbus is studying the designs on a so-called mock-up of a fuselage section that includes seats, electrical systems and pilot sleeping compartments, to complement the digital master plan.

"The A350 needs to be more or less on time, because if it's not, every time a new plane or a new engine is announced, investors are going to run a country mile," said Sandy Morris, an analyst at Royal Bank of Scotland, who advises investors buy EADS shares. "The heat is on for management to get this right."