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Malaysia Airlines looking at 'alternatives' after A380 delivery is delayed

Malaysia Airlines looking at 'alternatives' after A380 delivery is delayed

Malaysia Airlines said Wednesday it was disappointed with further delays in the delivery of Airbus A380 superjumbos and would assess all available alternatives.
The airline has ordered six the jets. Airbus said Tuesday it would push 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.
"We are very disappointed with this further delay and are currently awaiting a clear delivery plan from Airbus," the state-controlled carrier said in a statement.
"Malaysia Airlines and its holding company, Penerbangan Malaysia Berhad, will continue discussions with Airbus on this matter. We will also consider and assess all available alternatives and options," it said.
It didn't say whether these options may include scrapping its order for six A380 planes.
Tengku Azmil Zahruddin, its chief financial officer, said the delays will not affect the money-losing carrier's turnaround plan to return to profitability by 2007.
"We will be able to adapt to the changes required," he added.
Malaysia Airlines had ordered 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 its restructuring plan.
Earlier Wednesday, the 8,000-strong Malaysian Airline System Employees Union reiterated its call for the 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."
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 : 2020-12-03 02:35 GMT+08:00