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Labor union urges Malaysia Airlines to scrap order for six A380 planes

Labor union urges Malaysia Airlines to scrap order for six A380 planes

Malaysia Airlines' labor union Wednesday urged the money-losing carrier to scrap its order for six A380 superjumbos after Airbus announced further delivery delays.
Airbus on Tuesday pushed back the delivery date for the first A380 jet for the third time until the second half of 2007 due to wiring complications. The plane is now two years behind its original schedule.
The 8,000-strong Malaysian Airline System Employees Union reiterated its call for the state-controlled carrier to scrap the planned purchase.
Union secretary Mustafa Maarof said the airline does not need new planes and warned such huge double-decker aircraft will strain its finances and also manpower following recent layoffs.
The list price of the A380 is around US$300 million (euro81.7 million).
"It defeats the purpose because the cost (of buying and maintaining) A380 is too high. The company is just beginning to recover and we don't have enough cash-flow," he told The Associated Press.
"We should be a lean organization, and not take on new debts."
A Malaysian Airlines spokesman said the company will issue a statement later Wednesday.
Malaysia Airlines ordered the six A380s several years ago when the company was doing well. But it has run into deep financial troubles, forcing the management to slash jobs and close down unprofitable routes under a plan to return to profitability in 2007.
Chris Eng, an analyst at OSK Research, said the carrier is likely to receive its first A380 plane in July 2008, instead of January 2007, but this could be a blessing in disguise.
"As part of its turnaround plan, this delay may allow Malaysia Airlines more breathing room to sign code shares and consolidate its routes," he said in a research note.
Virgin Atlantic and Emirates _ the A380s biggest customer _ have hinted that the delivery delays could lead to order cancelations.


Updated : 2021-04-24 02:39 GMT+08:00