• Home
• /
• Business

Emirates voices dismay over A380 delay; Airbus says it's worth waiting

DUBAI — As Emirates voiced its disappointment over a projected delay of up to six months for the delivery of Airbus 380 superjumbo, Airbus yesterday insisted that it was worth waiting for a good product.

David Velupillai, regional manager, Airbus SAS, speaking to Khaleej Times from his headquarters in Toulouse, said the European aircraft manufacturer could understand the disappointment of customers. "But we prefer to deliver a good quality product a bit later than earlier. Indeed, it is worth waiting for a good product like A 380," he said.

Airbus Chief Commercial Officer John Leahy yesterday blamed the delays on Airbus underestimating the engineering complexities of the aircraft.

Asked if the change in delivery schedule would trigger compensation demands from customers, Velupillai said Airbus would be discussing the consequences of the delay with all its customers.

Ruling out the possibility of any cancellation of A380 orders by carriers, Velupillai said he did not expect the delay to impact Airbus sales this year. "The delay in delivery varies from two months to six months, depending on customers. However, we will stick to the new delivery schedule and we insist that we have a very good product which our customers want." He said the superjumbo, which had its maiden flight test last month, is getting excellent feedback, and Airbus is confident that it has an excellent product to offer.

Emirates, which has placed orders for 45 Airbus 380, as part of a mega aircraft purchase for 71 aircraft worth $19 billion, said it was quite concerned about its impact of the delivery delay for the new 555-seat A380 on the airline's aggressive growth plans. Emirates was to take the delivery of the first aircraft by October 2006.

An Emirates spokesman said the airline, one of the fastest growing carriers in the world today, was expecting confirmation from Airbus about the delay as well as a revised delivery schedule. "The delay is disappointing, though hardly unprecedented in totally new aircraft launches," he pointed out.

"We are concerned about effect of the delay on Emirates' growth plan, and will study the new timetable carefully as soon as we get it to ascertain its impact in detail," he said.

"The sooner we get the revised schedule, the better we can prepare for the challenges that the delay will pose. We will make every effort to present it from slowing down our aggressive growth plans," he said. On the provision of compensation, the spokesman said the airline expected Airbus to fully meet its obligations in accordance with the contract between the two companies.

Singapore Airlines, which will be the first to fly the superjumbo A380, may seek penalty payments, Chief Executive Chew Choon Seng said. Qantas Airways Ltd., Australia's biggest, said it will seek damages.

"If there was an inexcusable delay, then that is a matter for compensation," said Airbus Chief Commercial Officer John Leahy.

The European planemaker said March 9 that the break-even point on the 380 programme has risen to sales of 300 planes from 250, as projected development costs of $16 billion increased as much as 15 per cent because of delays and the challenge of technical issues, such as cutting the plane's weight.

Aviation industry analysts said the delays are a blow for Airbus, which is counting on the A380 to maintain its sales lead over Boeing which has won orders for its new 787 Dreamliner from such longtime Airbus customers as Northwest Airlines and Air Canada.

Airbus has 144 firm orders for the A380, to be the world's largest passenger plane. The orders from 13 customers are worth $40.3 billion at list prices. Boeing has received 266 orders from 21 customers for the 787 since it first started selling the new plane last year. The orders are valued at as much as $31.9 billion.