Emirates Airlines Orders 4 More A380s

DUBAI, United Arab Emirates -- European aircraft maker Airbus announced Monday it would compensate Emirates Airlines for a two-year delay in delivering its order of 43 A380 superjumbos.

The Dubai state-owned carrier responded by announcing it would buy four more of the world's largest passenger plane for a total of 47 - Airbus' largest outstanding order.

The A380 sells for as much as US$280 million (euro206 million) at retail prices, but large airline customers typically negotiate steep discounts. Neither Emirates nor Toulouse, France-based Airbus agreed to discuss the terms of Airbus' compensation.

The announcements appeared to indicate that the strained relationship between Airbus and Emirates had made amends and gave a confidence boost to the flagging European consortium.

Still, Emirates President Tim Clark told Dow Jones Newswires Monday the carrier is also looking at buying some of Airbus rival Chicago-based Boeing Co.'s forthcoming long-range planes, the 787 Dreamliner.

Emirates chairman, Sheik Ahmed bin Saeed al-Maktoum, has said his airline's rapid expansion plans had been hurt by the delays. Emirates was hoping to use the A380 to meet Dubai's goal of 15 million visitors a year by 2015. Dubai counted 6.5 million visitors last year.

Emirates, the largest customer for the A380, is conducting a strategic fleet review in preparation for carrying an expected 45 million passengers a year by 2025.

Airbus, a wholly owned unit of European Aeronautic Defense & Space Co, said Emirates will receive the first of the aircraft in the third quarter of 2008.

In a statement, Airbus President and Chief Executive Officer Louis Gallois called Emirates' repeat order "a huge vote of confidence" for Airbus.

Sheik Ahmed said in a prepared release that Emirates' order for more A380s "should leave no one in any doubt about our faith in Airbus, the company and the quality of the aircraft."

Production of the 555-seat A380 has been delayed by several technical problems. The first delivery, to Singapore Airlines, is now planned for August 2008. Emirates had expected to have 18 of the planes by then.

Airbus and Emirates had been in protracted talks over compensation for the late-arriving A380 that the airline needs to boost capacity on its fast-growing routes to Asia-Pacific and the Americas.

To date, Airbus has sold a total of 160 A380s to 14 airlines. On Monday, Airbus' chief operating officer John Leahy told reporters in India that it is discussing further potential A380 sales among Indian carriers, Dow Jones Newswires reported.

Earlier this year, Airbus announced plans to slash 10,000 jobs to help recover from the delay to the superjumbo that wiped some euro5 billion (US$6.7 billion) off profit forecasts for 2006-2010.

In February, cargo handler UPS Inc. announced it had agreed with Airbus' revised delivery dates for its 10-plane order, but rival FedEx Corp. responded to the new plane's delays by canceling its A380 order and announcing it would purchase 15 Boeing 777 freighters with an option to buy 15 more.


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