Airbus to lose much, leaked minutes hint

DUBAI — Leaked minutes from an Airbus audit committee reveal that the embattled plane-maker could make heavy losses on the first deliveries of its snag-hit A380s to launch customers including Emirates Airlines, Singapore Airlines and Qantas.

By Isaac John (Chief Business Reporter)

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Published: Sun 2 Jul 2006, 11:05 AM

Last updated: Sat 4 Apr 2015, 2:55 PM

Emirates, the largest customer of A380 with 45 super-jumbo orders, however, refused to give any specific details about the extent of the compensation claims but said discussions with Airbus on the topic are progressing.

Talking to Khaleej Times, Mike Simon, Divisional Vice-President for Emirates Corporate Communications, said he also would not comment on reports quoting Airbus Middle East President Habib Fakih about Emirates airlines talking with the European aircraft manufacturer on replacing the 20 A340-600 planes it ordered in 2003 with more A380s or A350s.

On the long-awaited decision about the new mid-size aircraft type which Emirates is expected to order at this week's Farnborough air show in London, Simon said the final choice between Boeing 787 Dreamliner and Airbus A350 would be delayed. "I can confirm that we will not be announcing our choice between the two models at Farnborough. We are still studying the two options "

The minutes, posted by French newspaper Le Monde, suggest that the planes due to be delivered to Singapore Airlines, Qantas and Emirates next year could lose money by compensation payments to airlines for delivery delays running to more than a year.

In the leaked minutes of an audit committee meeting, Airbus Chief Executive Gustav Humbert tells the two chairmen and two CEOs of EADS — Co-owner of Airbus with BAE Systems — that the first two A380s to Singapore Airlines would be sold at a loss and there could be more.

EADS has filed a legal complaint over the leakage of the internal documents hinting at problems at Airbus. It has also started an internal probe into the leak.

EADS Co-chief executive Noel Forgeard, who is embroiled in a scandal about insider trading, told the meeting that he asked Airbus about the risk of losses on other A380 deals, including some of the planes ordered by Qantas and Emirates Airlines.

"Forgeard reported that he has asked the Airbus team whether they can guarantee that some of the A380 contracts will not be at loss if it happens that penalties or cost overruns take place, without obtaining a clear answer," the minutes said.

Apart from the three airlines, several other carriers including Etihad Airways, which are among the 16 carriers hit by the production bottlenecks of Airbus A380, have also hinted that they would look into the contractual provision for penalty over delivery delays of the superjumbo planes.



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