Airbus Plans for US Dealt Blow

The troubled Airbus A380 program was dealt a potential blow on Friday when an influential US congressmen said federal funds should not be used to upgrade US airports to accommodate the world's largest passenger aircraft.

John Mica, chairman of the House aviation subcommittee, claimed it could cost as much as much as $1 billion to refit up to 18 airports to handle the 550-seat A380, which is due to enter service next year despite ongoing production delays.

The congressman said any use of federal funds from the Airport Improvement Programme to allow A380 operations would be "patently unfair" in the wake of the controversy over European state subsidies for the aircraft's development.

However, aviation experts said such estimates were inflated, while A380-related improvements were also needed to handle new Boeing aircraft.

Los Angeles, San Francisco, Miami and New York's JFK are expected to be the first four US airports to handle A380s. The size of the aircraft will require the municipally-owned airports build stronger runways and air bridges, as well as enlarge some terminal facilities.

Mr Mica commissioned a report on the costs from the Government Accountability Office, with the $1 billion he cited relating to the 18 airports which may eventually handle the A380.

"The costs have traditionally been overestimated," said Dick Marchi, senior advisor for policy and regulatory affairs at ACI North America, a trade group. He said the GAO had assumed all of the airports would choose a more expensive path to modernise their runways, while most had so far not gone down this route.

Mr Mica said he planned to introduce legislation that would bar federal funds from being used in A380-related projects, noting that no US passenger airlines have ordered the aircraft.

"Until a US airline chooses to acquire and operate the passenger version of the A380, foreign airlines that operate A380 passenger service to and from the US should pay for any needed infrastructure improvements at the airports they serve," he said in a statement.

However, Mr Marchi said the runway-strengthening work would also be required for Boeing's new 747-800 model, which holds less passengers than the A380 but has a similar wingspan.

The federal airport programme gives around $3.6 billion a year in grants, though much of this goes to smaller airports, and larger gateways have tended to use the bond markets for large-scale investments. Mr Marchi said federal funds accounted for around 15 per cent of capital spending at the large US hubs.

While airport operators cast doubt on the practicality of Mr Mica's plan, any efforts to thwart the A380 would impact US companies, despite the absence of any orders for the passenger model.

FedEx and UPS have ordered the cargo version, and Los Angeles-based ILFC, a leasing group, has 10 orders. Moreover a large number of US companies are key suppliers of components for the A380.

However, any delay to fitting out airports for the A380 comes at a sensitive time for Airbus. The program has already run into production problems which will delay the first deliveries and could see Airbus co-owned by EADS and BAE Systems facing millions of dollars in compensation payments to customers. ILFC has threatened to cancel orders if the production delays persist.

Mr Mica's intervention also comes amid the long-running spat between the US and European governments over launch-aid to commercial aircraft projects. The dispute is currently before the World Trade Organisation, and threatens to expand into an order for new tankers for the US Air Force on which Airbus and Boeing have rival offerings.

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