Airbus Rollout Faces Political Backlash
By Doug Cameron, Chicago, theaustralian | Jun. 26, 2006
THE troubled Airbus A380 program was dealt a potential blow on Friday when an influential US congressman 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 $US1 billion ($1.3 billion) to refit up to 18 airports to handle the 550-seat A380 -- which is expected to enter service next year despite production delays.
Mr Mica said any use of federal funds from the Airport Improvement Program to allow A380 operations would be 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 to build stronger runways and air bridges, and to enlarge some terminal facilities.
Mr Mica commissioned a report on the costs from the Government Accountability Office, with the $US1 billion he cited relating to the 18 airports which may eventually handle the A380.
"The costs have traditionally been overestimated," said Dick Marchi, senior adviser for policy and regulatory affairs at ACI North America, a trade group. He said the GAO had assumed all 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 had ordered the aircraft.
"Until a US airline chooses to acquire and operate the passenger version of the A380, foreign airlines that operate A380 passenger services to and from the US should pay for any needed infrastructure improvements at the airports they serve," he said.
However, Mr Marchi said the runway strengthening work would also be required for Boeing's new 747-800 model, which held fewer passengers than the A380 but had a similar wingspan.
The federal airport program gives about $US3.6 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 about 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 affect 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 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.