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Singapore Airlines, other carriers assess options after latest Airbus A380 delay

Singapore Airlines, other carriers assess options after latest Airbus A380 delay

Singapore Airlines, Australia's Qantas Airways and Malaysia Airlines said Wednesday the latest delay in the delivery of the Airbus A380 superjumbo was disappointing and that they were assessing their options in dealing with postponement.
Singapore Airlines Ltd. was originally scheduled to be the first customer to receive the A380 in December after an previous one-year delay due to wiring problems.
Now the Southeast Asian city-state's flag carrier said it expects its first superjumbo delivery in the fourth quarter of 2007 after Airbus on Tuesday pushed back the delivery date for the third time.
Deliveries of subsequent aircraft are scheduled for 2008 and beyond.
"The delays are disappointing; all the more so because the flight test and certification program is proceeding well, and the delays are down to production issues," the carrier said. "Singapore Airlines is assessing the impact that the delays ... will have on forward capacity growth, and assessing options to mitigate the situation."
The statement said new capacity will be added to the carrier's fleet with the first of 19 Boeing 777-300ER aircraft to be delivered next month. Six such aircraft will be delivered by the end of the year.
Singapore Airlines said Airbus, based in Toulouse, France, would compensate it for the latest delay, but said the terms of the compensation were confidential.
The airline has 10 A380s on firm order and options for a further nine. The A380's largest customer is Dubai-based Emirates Airline, with 45 aircraft on order worth over US$13 billion at list prices.
The delays caused frustration among many carriers that had been counting on using jumbos on their most heavily traveled air routes.
Qantas' Chief Financial Officer Peter Gregg said Wednesday the carrier now expects to have four of the 555-seat aircraft by August 2008 and a further seven by mid-2009.
The airline's executive general manager John Borghetti told Dow Jones Newswires that while contingencies to maintain capacity were in place to cover the initial delays, "we're also taking a step back and reviewing the whole lot in terms of what we do."
Borghetti said Qantas been shifting some aircraft between its international and domestic fleet to help deal with the delays.
Qantas has already received compensation of A$104 million (US$77.6 million; euro61 million) from Airbus for the earlier delays and Borghetti confirmed it would pursue Airbus for further compensation under the terms of the contract.
Malaysia Airlines, which has ordered six jets, expressed disappointment with the delay and said it was "currently awaiting a clear delivery plan from Airbus."
"We will also consider and assess all available alternatives and options," it said.
Earlier Wednesday, the 8,000-strong Malaysian Airline System Employees Union reiterated its call for the money-losing carrier to scrap the planned purchase, with the union secretary saying the airline does not need new planes and warning such huge double-decker aircraft will strain its finances and also manpower following recent layoffs.
Emirates Airline said Tuesday the company was "reviewing all its options" after a further 10-month delay on the delivery of its A380s, which the president called "a very serious issue."
Airbus' majority owner, European Aeronautic Defence and Space Co., or EADS, said the latest delays will lop an extra euro2.8 billion (US$3.6 billion) off operating profit and announced a restructuring plan to cut costs and boost productivity at Airbus.
Airbus sees no significant signs that cancelations are likely from any of its A380 customers, CEO Christian Streiff said Tuesday.
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Associated Press writer Eileen Ng in Malaysia contributed to this report.