Press: Airbus hit with A380 compensation

17th Jul 2006

Airbus, the maker of the delayed A380 superjumbo has already been approached for compensation by some of its airline customers, The Business reported. A spokesman for Virgin Atlantic, the only British carrier to have placed an order for the A380, said it was in talks about possible compensation.

“We are in talks with Airbus about possible compensation and/or a mixing of our fleet in terms of aircraft and volume if our order is not ready in time,” the spokesman told the newspaper.

Virgin has placed an order with Airbus in excess of 1 bln stg for eleven aircraft in total.

Shares will take a further tumble as the City factors in details of compensation negotiations taking place on the eve of the Farnborough Air Show, the newspaper said.

The compensation negotiations, which are also thought to be taking place with Emirates, Singapore Airlines and Qantas, will lead to the first figures agreed since the production delay was announced some weeks ago, the article added.


There has been some speculation that Airbus profits would be hit annually by 628 mln usd due to the rise in production costs, lost revenue and late delivery penalties.

Airbus had hoped the A380, which will be showcased at Farnborough this week, will become the flagship aircraft for airlines.

It has received 159 orders from 16 customers including Singapore, Emirates, Qantas, and Virgin Atlantic. Some had banked on receiving their order as early as the end of this year.

“Talks are frustratingly slow because the change in management has left the business in paralysis. Airbus is on the back foot and dont have a strong negotiating position,” another airline source reportedly told the newspaper.


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