PARIS, 14 October 2006 — Virgin Atlantic Airways Ltd. voiced more dissatisfaction yesterday with major delays to the Airbus A380, but the plane’s biggest customer, Emirates, said it had no current plans to cancel any of its 45 superjumbos on order.
UK-based Virgin Atlantic, which has warned that A380 cancellations are among the options it is reviewing, said it had given Airbus one week to respond to “new proposals,” likely to include more compensation and earlier deliveries than the troubled European aircraft maker had offered.
Virgin Atlantic spokesman Paul Charles declined to give details of the proposals, approved by a meeting of the airline’s board on Thursday.
“We are talking with Airbus extensively,” Charles said. “It is an important decision as to what we do.”
Virgin Atlantic says Airbus told it to expect the first of its six A380s by early 2011 - more than a year behind the original schedule. The airline is jointly owned by Richard Branson’s Virgin Group Ltd. and Singapore Airlines Ltd. In a positive development for Toulouse, France-based Airbus, Emirates said yesterday it plans to maintain its order for 45 superjumbos, with a combined list value of $13 billion (10.4 billion euros).
“We have invested a lot in ground facilities so we have to stick with the order for now,” said Tim Clark, president of the Dubai-based airline, in an interview with Dow Jones Newswires.
But if there were any further delivery delay, Clark said, “there may be cancellations down the line.”
Airbus, which so far has 159 superjumbo orders from 16 customers, shocked investors and customers in June by doubling the 555-seater A380’s production delay to one year, blaming problems with wiring.
Earlier this month it doubled the holdup again to a total of two years and said the delay will wipe 4.8 billion euros ($6 billion) off the profits of its parent company, EADS, over four years. “We cannot wait forever but at this point there is nothing that comes close to the A380 as far as seat capacity” is concerned, Clark said.
The delays will make a “big dent” in Emirates’ expansion plan, which relies heavily on the world’s largest passenger jet, Clark also said in separate remarks confirmed by his office.
Emirates says it plans to plug the gap by leasing up to seven Boeing Co. 777-300s and has not yet discussed compensation with Airbus.
Air France, meanwhile, denied a report that it is demanding 100 million euros ($125.3 million) in compensation for late delivery of its 10 A380s.
French business daily La Tribune reported on its website last night that Airbus was contesting the figure and negotiations with the airline were stalled. An Air France spokesman said no compensation was being sought and no negotiations had taken place.
New Airbus CEO Louis Gallois has vowed to press ahead with “painful” restructuring amid a financial squeeze caused by the A380 delays, tougher competition from Boeing and the weaker US dollar - which hits revenue in euros from dollar-denominated jet sales.
Gallois, who is also co-chief executive of EADS, took over as Airbus CEO from Christian Streiff, who resigned Monday citing resistance to change in the boardroom of the Franco-German defense and aerospace group.
EADS said yesterday it had completed the 2.75 billion euros ($3.45 billion) purchase of the 20 percent of Airbus that it did not already own from Britain’s BAE Systems PLC. EADS said it had paid for the stake in cash from its own funds.
German airline Lufthansa AG separately confirmed that it had placed firm orders for 35 single-aisle jets from the Airbus A320 family, in a deal worth about $2.2 billion (1.8 billion euros) at list prices. Actual financial terms were not disclosed.
Shares in European Aeronautic Defence and Space Co. fell 0.6 percent yesterday to close at 21.24 euros ($26.62) in Paris.
