Emirates seeking $294 million in compensation

[Midnight Mike]

Emirates Says Airbus Delivery Delay Has Hurt Badly, Wants
Posted: December 27th, 2006 11:21 AM PDT

The airline Emirates has confirmed it is seeking financial compensation from Airbus, saying the two-year delay in delivery for the super-jumbo A380 plane had affected it "badly."

But the airline declined Tuesday to confirm compensation figures published in the French press, saying the compensation clauses for the contract to purchase 45 of the European-built planes were "confidential."
"We don't intend to say any more," said the statement issued by the Emirates media office.

The rapidly expanding Emirates is the world's biggest customer for the A380, having ordered 45 models of the 555-seat, double-deck aircraft in a deal worth about US$13.5 billion.
"We are determined to claim compensation. We've been badly hurt by this delay," the chief executive of the airline, Sheik Ahmad bin Saeed Al Maktoum, was quoted as saying in an interview published Monday by the Emirates newspaper Al-Bayan.

"After the first delay, we had the option of canceling the deal, but we didn't - maybe because the results would have been worse," Al Maktoum said.

Airbus, which is based in Toulouse, France, has announced three delays in delivery for the super-jumbo since early 2005. The latest delay, declared in the past few months, stretched delivery to two years.
Al Maktoum was quoted as saying Emirates expected to receive its planes by August 2008.

The French newspaper Le Parisien reported Tuesday that Emirates is seeking euro223 million (US$294 million) in compensation.

An Airbus representative in France declined to confirm the figure and said that discussions with Emirates over compensation were "nothing new."
Another customer for the super-jumbo, Singapore Airlines, has said Airbus had agreed to provide compensation for the delivery delay, but that the terms were confidential.

Airbus has received a total of 167 firm orders for the A380.

[cancidas]

well, they'll easily be able to pay this from thier canadian lawsuit winnings. still can't believe they're doing that! amazing!!!

[nwafan20]

Airbus better raise that break even number again!

[T-Bird76]

So Airbus will give them a couple of planes for free, big deal. When you think about the cost involed in Emirates purchase this isn't a huge amount of money for Airbus.

[Midnight Mike]

So Airbus will give them a couple of planes for free, big deal. When you think about the cost involed in Emirates purchase this isn't a huge amount of money for Airbus.

Tommy

I understand what you are saying about keeping the customer happy, but, this is huge considering that Emirates had already received as much as a 60% discount for the A380, Emirates was able to cancel the A340 order with no penalty & other perks, you are talking about a lot money.....

[T-Bird76]

[quote=Midnight Mike]

So Airbus will give them a couple of planes for free, big deal. When you think about the cost involed in Emirates purchase this isn't a huge amount of money for Airbus.

Tommy

I understand what you are saying about keeping the customer happy, but, this is huge considering that Emirates had already received as much as a 60% discount for the A380, Emirates was able to cancel the A340 order with no penalty & other perks, you are talking about a lot money.....[/quote:8a049]

I disagree Mike. Emirates never said they want Airbus to write them a check for the money. This kind of compensation can be spread out to future orders, service, training, promotions and whatever else. Airbus would lose far to much if Emirates dumped the order all together. With the way Emirates is growing another large order for A380s could be around the corner.

[hiss srq]

I see Ek as a carrier that might not hang around the French for too much longer though to be honest. Airbus EADS dug a big grave for themselves really with the scandalous secrecy etc that shrouded the super frog.

[Midnight Mike]

I disagree Mike. Emirates never said they want Airbus to write them a check for the money. This kind of compensation can be spread out to future orders, service, training, promotions and whatever else. Airbus would lose far to much if Emirates dumped the order all together. With the way Emirates is growing another large order for A380s could be around the corner.

What? You disagree that is not a lot of money?

I never said anything about cancelling orders, just commenting that is a big pill to swallow. As far as writing it off, it all depends what the customer wants & when. Perhaps Emirates may want the next "3" A380 aircraft free. Of course if Airbus can write it off over a period of 10 years, it would not be as bad.....