EADS Says A380 Jet to Be Delayed a Year

Virgin Atlantic and Emirates - the plane's biggest customer - hinted that the new setbacks could lead to order cancelations.

The ripple effect of the fresh A380 delay is likely to hurt the group's industrial shareholders and to benefit U.S. rival Boeing Co., which is developing a 400- to 500-seat version of its 747 jumbo to compete with the A380.

German automaker DaimlerChrysler AG - which owns 22.5 percent of EADS - said it will review its own operating profit guidance as a result of the Airbus problems. Shares of Boeing rose $1.81, or 2.3 percent, to close at $81.78 on the New York Stock Exchange.

EADS also announced the launch of a new cost-cutting program to counter the impact of A380 delays as well as the weaker dollar and growing competition from Boeing. EADS gave few details of the plan but said it aims to generate annual cost savings of 2 billion euros ($2.6 billion) from 2010.

Management oversight of Airbus is also being tightened up at EADS - expected soon to buy the 20 percent of the aircraft maker that it does not already own from Britain's BAE Systems PLC. BAE shareholders vote Wednesday on a management recommendation to go ahead with the 2.75 billion euro ($3.5 billion) sale.

Shares in European Aeronautic Defence and Space Co., which had fallen recently in anticipation of the A380 delays, closed 1.1 percent higher at 22.65 euros ($28.85) in Paris before the company's statement, but after those issued by Emirates and Lufthansa.

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