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Airbus Avoids First A380 Order Cancellation in Settlement With Malaysian
Airbus SAS, the world’s largest maker of commercial aircraft, avoided the first order cancellation for its A380 superjumbo after agreeing to compensate Malaysian Airline System Bhd. for late delivery.
Airbus will deliver the first A380 to the Malaysian carrier in April 2012, and the two sides agreed to proceed with the order for a total of six jets, Chief Executive Officer Tengku Azmil Zahruddin told reporters today.
“We’ve completed our discussions with Airbus and will be taking the six A380s,” Tengku Azmil said at an earnings press conference. He declined to provide financial details.
The Asian carrier said in June that it was considering all options after Airbus fell years behind its original delivery schedule for the world’s largest passenger plane. Some five airlines currently use the A380.
Delays are common in aircraft development. The A380 was delayed because wiring had to be reconfigured and clients demanded custom interior designs. Boeing Co., which lost the industry lead to Airbus in 2003, is also several years behind schedule on its 787 wide-body jet, with first deliveries now slated for around the end of 2010.
Airbus has delivered 35 A380s to date. Emirates now has 12 A380s in its fleet, more than any other carrier, and Air France- KLM Group received its fourth A380 last week. The four-engine jet typically carries about 525 travelers.
Malaysian was originally scheduled to take delivery of its first A380 in 2007, before delays pushed that back to January 2011, and then to the third quarter of that year. Delivery was pushed back again this year, to 2012.
Malaysian Air today reported a second-quarter loss after betting wrongly on the price of jet fuel. The net loss totaled 534.7 million ringgit ($168 million), or 16 sen per share, in the three months ended June 30, compared with net income of 874.9 million ringgit, or 42.61 sen, a year earlier.
To contact the reporters on this story: Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net.
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