Emirates Shelves Plan to Switch Airbus Order

The carrier is now expected to receive its first A380 in August 2008 instead of October 2007.


Emirates, the largest airline in the Middle East, has shelved plans to convert a $4.2 billion order with Airbus for the A340-600 to the A380 after delivery delays of the A380.

Emirates, which is owned by the government of Dubai, will delay a decision because wiring problems on the A380 must be resolved, the airline's president, Tim Clark, said Friday in an interview.

''The 380 program really has to sort itself out,'' he. ''There's no point to say we're going to substitute with the 380s when the 380s are delayed two years.''

Emirates, Singapore Airlines and Air France-KLM Group are among carriers that are changing their plans after Airbus this month announced a third delay in the delivery of the A380, a 555-seat double-decker. Emirates is the biggest customer for the A380, with orders to buy 43 and lease two. On the A340-600, the airline has orders and options for 20.

The delay will ''slow down their growth,'' said Richard Pinkham, a consultant in Singapore with the Center for Asia Pacific Aviation.

''They were expecting to have 18 by the time they will get their first aircraft,'' Pinkham added.

Emirates, which plans to use the A380 to add destinations and challenge European and Asian carriers on routes connecting Asia with Europe and North America, has not canceled its order for the plane. The carrier is now expected to receive its first A380 in August 2008 instead of October 2007.

Tony Phillips, the spokesman in Singapore for Airbus, declined to comment.

Clark, the airline president, said the A380 delay created a ''big dent'' in expansion plans, which have been revised to having 156 planes by 2012 at the earliest, compared with 2010 previously.

Emirates now plans to lease five Boeing planes, the 777-300ER, to fill the capacity shortage arising from the A380 delay and is in talks with GE Commercial Aviation Services and International Lease Finance for ''a few more,'' he said.

Converting Emirates' A340 orders, including options, to A380s would generate an additional $1.6 billion in sales for Airbus, based on list prices. The A380, which was developed to help Airbus keep ahead of Boeing, costs $282 million to $302 million each, according to catalog prices. It has a range of 8,000 nautical miles, or 14,800 kilometers.

The A340-600 can carry about 380 passengers and fly 7,500 nautical miles. It costs $211.5 million to $222 million, based on list prices.

Emirates has been urging the government to encourage more budget carriers, creating a hub in Dubai, so that it can tap customers for its long-haul flights.



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