Emirates cancells Airbus billion dollar order due to delays

Dubai-based airline Emirates, the biggest customer for the Airbus A380, said it had given no thought to canceling its billion order, but is looking at compensation for manufacturing delays, Reuters reports.

 

"We are not considering cancelling our order," an Emirates official told Reuters on Wednesday. "We have not thought about that." Emirates said it was informed by Airbus, which is controlled by European aerospace company EADS, of a further six-month delay in deliveries of the world's largest passenger jet and that it hoped to put the aircraft into operation by January 2008.

 

A delay of up to seven months for the A380 announced last week and blamed on wiring complications has angered customers, sparking calls for compensation and warnings that some may rethink their orders.

 

The A380 has suffered similar problems before. Emirates said it will begin talking to Airbus in the next few weeks and that compensation provisions in the carrier's agreement with Airbus would be discussed.

 

"Compensation is one of the components that will be looked at," the official said. The biggest aircraft leasing firm, International Lease Finance Corp., ILFC, has warned it may cancel deals to buy the A380 and the planned A350 model, contracts worth more than billion at list prices.

 

Emirates has ordered 43 of the A380 planes, by far the largest order for the plane. Emirates expects to receive its first A380 in October 2007, a year after delivery was first expected, to be put into operation in January 2008.

 

The mammoth A380, along with the long-range 777-300ER from Boeing, are key to the expansion plans of fast-growing Emirates, which is planning more routes into Africa and to South America.

 

Emirates, based in the Gulf Arab region's trading hub of Dubai, is also considering an order from Boeing or Airbus that could be worth up to billion for mid-sized airliners.  

 

Emirates said last month that once Boeing and Airbus settle on their respective offerings for mid-sized planes, the airline could purchase up to 100 aircraft.