Airbus to Compensate for Delivery Delays

The double-decker Airbus A380 made its first landing in Asia on Friday, and Airbus officials said Asian airlines that have ordered the superjumbo will be compensated for delivery delays.

Seven airlines in the Asia-Pacific region have ordered a total of 49 A380s, accounting for 31 percent of 159 firm orders so far for the world's largest passenger aircraft - but deliveries have been pushed back six to eight months due to production delays.

The rollout of the plane is now on track, said Charles Champion, Airbus' head of the A380 program, and Airbus is "committed to deliver the first aircraft by the end of 2006" to Singapore Airlines, the first airline to operate the jet.

Singapore Airlines, which has ordered 10 of the jets, has complained about an eight-month delay in delivery to November 2006. Australian Qantas, which has ordered 12 planes, and Malaysia Airlines, which has ordered six planes, are also unhappy with the postponement.

Airbus will compensate airlines for the delays according to contract terms, officials said.

"It is standard practice ... payments will be made for each day of delay in delivery. It is not an enormous amount of money considering how much the aircraft is worth," said John Leahy, chief operating officers for customers.

The aircraft, which is designed to carry 555 passengers but can be stretched to accommodate 800, has a list price of $292 million.

Other A380 customers in the region are Thai Airways, Korean Air, China Southern Airlines and India's Kingfisher Airlines.

In its first long-haul test flight outside of Europe, the giant airliner touched down shortly after 10:00 a.m. at Singapore's Changi Airport after completing a 13-hour flight covering 8,389 miles from Airbus' headquarters in Toulouse, southwest France.

The great white jet, as tall as a seven-story building and stretching about three-quarters of the length of a soccer field, taxied down the runway amid tight security as hundreds of excited travelers and airport staff looked on.

The A380 prototype was originally due to arrive Tuesday in Singapore - the first stop of an Asian-Pacific tour that includes Australia and Malaysia - but Airbus postponed the trip three days to replace two of the plane's four engines.

Champion said there was no problem with the Rolls-Royce engine and the replacement was just a precautionary measure.

Airbus officials said the company is in talks to sell the jet to more carriers in China and India. Production of the plane will be ramped up, but new A380 customers will have to wait at least six years to take delivery, Champion said.

Singapore Airlines plans to start operating the jet by Christmas 2006, said Bey Soo Khiang, a senior executive vice president. He also said the company was finalizing talks over compensation for the delays.

Singapore Transport Minister Yeo Cheow Tong toured the jet Friday at Changi Airport, which has upgraded both its terminals to accommodate the mammoth A380.

With air travel expected to boom in the next 20 years, Leahy said the A380 will help to ease airport congestion at major passenger hubs.

By 2006, he said 20 airports will be ready for the A380 including Singapore, Melbourne, Kuala Lumpur, Sydney, Paris, Dubai and New York. By 2008, 38 airports will be ready and 60 by 2010.

"Asia-Pacific is clearly an important market for the A380... we are talking to more airlines in China and India," Leahy said, adding that Airbus expected to achieve its break-even sales point of 250 orders "very soon."

By 2023, Airbus predicts the world's major airlines will need 1,250 very large, fuel-efficient aircraft like the A380 to cater to rapid growth in intercontinental travel.

It forecasts Asia-Pacific will account for 62 percent of world demand, or 774 aircraft. European carriers will need 20 percent of the colossal jets to meet travel growth to Asia, with North America and the Middle East taking 17 percent or 215 aircraft between them.

China and India are key growth markets, Airbus says, noting that current A380 customers have made plans that will result in 130 weekly A380 flights to China alone by 2010.

Airbus is hoping the A380 will help it maintain its edge over Boeing Co., whose aircraft deliveries are likely to fall behind Airbus for the third straight year. Boeing expects to deliver 290 airplanes this year, while Airbus expects to deliver 370.

The A380 leaves later Friday for Australia - with stops in Brisbane, Sydney and Melbourne - for Qantas' 85th birthday celebrations. It heads to Malaysia on Nov. 17.


Associated Press Writer Gillian Wong contributed to this story from Singapore.

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