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A380s to Australia

DW staff (jam)October 30, 2006

Australian flag-carrier Qantas Airways announced Sunday that it had placed firm orders for eight more Airbus A380 superjumbo jets despite repeated delivery delays.

An A380 jet flies over Sydney's harbor
Qantas is adding 20 A380 jets to its fleetImage: AP

The vote of confidence in the world's largest passenger aircraft comes after Airbus announced a series of setbacks putting the arrival of the first of the airline's original order of 12 aircraft about two years behind schedule.

"Our decision to increase our order has been made after an extensive review of the recent problems at Airbus," Qantas chief executive Geoff Dixon said in a statement.

"We are convinced that these problems relate to industrialization issues at Airbus and will be remedied, and in no way relate to the technical capacity of the A380."

Airbus parent, the European Aeronautic Defense and Space Company (EADS), announced earlier this month that production problems had forced it to delay A380 deliveries by another year on average, the third setback for the program since June 2005.

Airbus has also sharply revised down its profit targets for the A380 project, saying it will now have to sell 420 planes to break even instead of 270 as previously announced. The Qantas order brings to 167 the total of A380s sold so far by Airbus.

Putting the final touches on the A380 has been a giant headache for AirbusImage: AP

"The A380 has breakthrough technology and everything we have seen reinforces our view that it is the best available aircraft for Qantas," Dixon said.

The A380s will be deployed on dense long-haul routes from Australia to the United States, Britain, Europe and possibly the Middle East. The 20 airliners are due to be delivered between August 2008 and 2015. Qantas has an option for 12 more of the superjumbo jets.

The A380 has a list price of around $280 million (220 million euros) and can carry 555 passengers.

Dixon said the terms of the new contract provided, among other things, protection against any further delay in the A380 delivery schedule.

Boeing, too

Qantas had also contracted with Boeing to acquire up to 115 B787 "Dreamliner" aircraft from 2008, Dixon noted, saying the new generation aircraft had "the very latest technology for aircraft in the 300-seater range."

"The Boeing 787 and the Airbus A380 both have up to 20 percent lower operating costs than existing aircraft and will form the nucleus of the fleets out to 2015 for Qantas and our low-cost airline Jetstar," Dixon said.

Qantas would use a combination of outright purchase and operating leases in acquiring the aircraft.

"All the costs of these new aircraft will be met by operating cash flows," he said.

The A380's first flightImage: AP

Qantas had also decided to buy five more Boeing 737-800 aircraft for delivery from February 2008. Qantas this month upgraded its full year earnings guidance in a statement to the airline's annual general meeting.

"Given recent improvements in our trading conditions, we now expect the current year's results to exceed last year's," Qantas chair Margaret Jackson told shareholders.

Qantas reported a net profit of $3.63 million for the year to June -- a 30 percent slump over the previous year which was blamed on spiralling fuel costs.

Emirates audit

On Monday, Airbus said that it was not worried by a visit by auditors from Emirates Airlines to check on the progress of its A380 superjumbo jets on order. Emirates is the A380's biggest customer, having ordered 43 planes worth $13 billion.

Airbus press officer Justin Dubon told the Associated Press that it was "something agreed to at the time of Christina Streiff, the former CEO who was replaced on Oct. 9 by Louis Gallois, the fourth Airbus head in 16 months." "He promised customers that they would be kept up to date ... and briefed on the progress of the A380."

A story on Sunday on the Wall Street Journal Web site reported that Dubai-based Emirates was cancelling an order for 10 A340-600 jetliners. The article quoted Emirates President Tim Clark as saying it would not take the 10 planes, which the newspaper reported have a catalog value of $2.25 billion.

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