Thai Airways To Fine Airbus For A380 Delivery Delays

[george]

Thai Airways to fine Airbus for A380 delivery delays

BANGKOK: -- Thai Airways International PCL has demanded that Airbus pay fines and additional compensation for a two-year delay in delivery of A380 aircraft, the airline said Saturday.

'Negotiations with Airbus started last month and remain underway, with the exact amount of the fines still not decided. We also demanded other forms of compensation for damages caused to our business,' said Thai Airways president Apinan Sumanaseni.

'We aim to conclude the negotiations this month. Then, it would be subject to the board's consideration by mid-December for a final decision,' he said.

The carrier has ordered six of the 555-seat A380s, but the delivery has been postponed by 22 months from the original date in 2009.

The first three are now scheduled for delivery in early 2011, while no date has been set for the delivery of the other three.

Apinan said Thai Airways had yet to rule out the possibility of canceling its orders.

'It depends on the negotiations. If we are not satisfied with the results, the deal needs to be canceled,' he said.

The Bangkok Post newspaper put the value of six A380s at 1.7 bln usd, but Apinan declined to give the exact figure, saying only that the reported number was 'too high'.

Thai Airways plans to use the aircraft on some of its most popular routes, flying from Bangkok to Frankfurt, London and Tokyo.

-- XFM-Asia 2006-12-03

[bkkandrew]

The big-faced goons should be careful. Airbus might have other customers up its sleeve and reallocate them. TG customers will eventually get fed up with the old crates they fly back and forth to LHR..

[jbowman1993]

Yet another breath of fresh air. Thanks for the insight.

[Head Snake]

GIve me some of what you are smoking jbow.

How can you have sleeves when you've already lost your shirt?

[STEELINOX]

Let them cancel; I am sure Airbus could care less. It would be far easier for Airbus to pay some fines than let the LOS airline whine about something as a delivery date being past due. They will take their (Thai) commitment and add it to another contract. As it stands the fate of the jet will be that it delivers a few years late; nothing to be surprised about here, all aerspace contractors blow delivery schedules and pay fines. Let Thai Airways cancel. But mark my words, come Dec 5th when "Gigantor" turns on final approach the Royal Orchid will be there smiling with flags a waving, and no cancellation of the contract and yes the fines will be paid when all said and done.

Thanks,

Randy

[cdnvic]

Does this mean Thai passengers or people meeting them at the airport can sue when a flight is late?

Far better a plane be introduced late and safe than rushed to completion with large cracks in it like certain airport runways I could mention.

[STEELINOX]

Does this mean Thai passengers or people meeting them at the airport can sue when a flight is late?

Far better a plane be introduced late and safe than rushed to completion with large cracks in it like certain airport runways I could mention.

LOL ! I keep forgetting about those cracks...

[jbowman1993]

Why all the hostility? This is just a business deal. If I company doesn't meet a deadline, there are usually penalities negotiated into the contract. There is an inherent nasty undercurrent to this thread.

As an American, I have no problem if Airbus drops them as many suggest that they should. Im sure Boeing will be happy to take their money instead. lol

Edited December 4, 2006 by jbowman1993

[STEELINOX]

Why all the hostility? This is just a business deal. If I company doesn't meet a deadline, there are usually penalities negotiated into the contract. There is an inherent nasty undercurrent to this thread.

As an American, I have no problem if Airbus drops them as many suggest that they should. Im sure Boeing will be happy to take their money instead. lol

All I see is ho humm ramblings about nothing as well; the klong is nothing but a shallow pool of mud and the tone of the thread really has none. I find it amusing though that the airline would spout off about cancelling the contract in the first place. Since the jet really has no competition; the Boeing jet is not even in the A380 class, should still have a clear viable market for which Thai would propose its use, unless of course their thinking on the routes it has planned for really has no viability, which means who knows what !

Thanks,

Randy

[zink]

All I see is ho humm ramblings about nothing as well; the klong is nothing but a shallow pool of mud and the tone of the thread really has none. I find it amusing though that the airline would spout off about cancelling the contract in the first place. Since the jet really has no competition; the Boeing jet is not even in the A380 class, should still have a clear viable market for which Thai would propose its use, unless of course their thinking on the routes it has planned for really has no viability, which means who knows what !

Thanks,

Randy

What's so amusing about it? It's a normal practise to receive more compensation/better discounts for future purchases from the company. For example, Emirates that has ordered 43 A380's has threatened several times to cancel their A380 order.

Airbus has much more to lose if airlines cancel orders since they haven't sold that many A380's and few cancellation would put whole project in jeopardy.

[STEELINOX]

All I see is ho humm ramblings about nothing as well; the klong is nothing but a shallow pool of mud and the tone of the thread really has none. I find it amusing though that the airline would spout off about cancelling the contract in the first place. Since the jet really has no competition; the Boeing jet is not even in the A380 class, should still have a clear viable market for which Thai would propose its use, unless of course their thinking on the routes it has planned for really has no viability, which means who knows what !

Thanks,

Randy

What's so amusing about it? It's a normal practise to receive more compensation/better discounts for future purchases from the company. For example, Emirates that has ordered 43 A380's has threatened several times to cancel their A380 order.

Airbus has much more to lose if airlines cancel orders since they haven't sold that many A380's and few cancellation would put whole project in jeopardy.

[Dakhar]

Be careful, Thailand may start manufactureing their own planes.

[cdnvic]

Be careful, Thailand may start manufactureing their own planes.

Great. We'll have pilots beating up competitors at Phuket airport.

[Berty]

I'm sure airbus are shaking in their boot!!!

[basjke]

Now we know why they landed in bangkok.They came to pay the fines.

[george]

Update:

THAI threatens to cancel Airbus A380 order

BANGKOK: -- Thailand's national flag carrier Thai Airways (THAI) may cancel its order of new A380 superjumbos from Europe's leading aircraft manufacturer Airbus if talks on fines for 22-month delay of the first delivery remain unsettled, THAI president Apinan Sumanaseni said on Wednesday.

Mr Apinan said the delay has caused a huge revenue loss for the airliner as the first delivery is 22 months behind schedule, now set for 2011 due to Airbus' production problems.

The airliner has ordered six of the 555-seat planes. It has planned to use the giant planes to service passengers on its popular routes to major European cities.

"THAI has to review its financial plan after an expected revenue loss as it is unable to service the new superjumbos from Bangkok to London, Frankfurt and Paris as earlier planned," Mr Apinan said.

THAI president made the comments a day after the world's largest plane carrying 55 passengers and a crew of five made its first arrival in the kingdom on Tuesday.

The Airbus A380 is a double-deck, four-engine airliner with a maximum range of 15,000 kilometres. It first flew on April 27, 2005. Commercial flights are scheduled to begin in 2007 after lengthy delays.

--TNA 2006-12-06

[Axel]

THAI president made the comments a day after the world's largest plane carrying 55 passengers and a crew of five made its first arrival in the kingdom on Tuesday.

--TNA 2006-12-06

If compensation is in ratio to 55 passengers should not be too high.

Edited December 6, 2006 by Axel

[Rinrada]

Just got in from Sing Air........

GOOD NEWS ......from Singapore Airways...

Dear Mr Rinrada.

AIRBUS A380 RECEIVES JOINT EASA &

FAA TYPE CERTIFICATION

The Airbus A380 reaches another key milestone towards becoming the largest passenger airliner to enter commercial service.

On 12 December 2006, the A380 aircraft, powered by Rolls-Royce Trent 900 engines, received joint Type Certification from the European Aviation Safety Agency (EASA) and Federal Aviation Administration (FAA), certifying that the aircraft has fulfilled the regulatory bodies' requirements for the safe conduct of flights.

This double seal of approval provides clear evidence of the technical soundness of the A380 and confirmation that the aircraft is meeting or exceeding expectations in terms of performance, range, environmental friendliness, and cabin comfort.

The EASA and FAA A380 Type Certificates were awarded at a ceremony held at the Airbus facilities in Toulouse, France. Senior officials from EASA, FAA and international Civil Aviation Authorities were in attendance.

The certification by the two major international governing bodies comes after the A380 successfully completed a stringent programme of certification trials. These trials took the aircraft and its systems well beyond their design limits to ensure the aircraft satisfies or exceeds all airworthiness criteria. The A380 is also the first aircraft to which 21st century certification standards were applied.

The long and varied series of flight tests have also demonstrated the A380's many exceptional qualities as a passenger aircraft. It has very low fuel burn, contributing to the lowest operating costs and very low emissions. An environmental champion, it is also quieter than any other airliner, meeting stringent noise restrictions at London Heathrow Airport. It has the quietest cabin in the skies, and pilots who have flown it enjoy its remarkable handling qualities.

To date, five aircraft have been involved in the intensive flight test programme, four of which are powered by Rolls-Royce Trent 900 engines. The aircraft have accumulated over 2,600 flight hours in 800 flights, and over 80 airline and certification pilots have flown the aircraft. During the flight test programme, the A380 was also welcomed at 38 airports around the world, proving its easy airport acceptance and compatibility.

Singapore Airlines is the launch customer of the Airbus A380. It has 19 aircraft on firm order, of which the first four are scheduled to be delivered from October 2007.

Stay tuned as the airline looks forward to continuing its tradition of historical firsts when it becomes the first airline to fly this exceptional aircraft.

[eyespan]

My my, is this on a first come first serve basis?

[phazey]

I'm sure these "fines" would be far less substantial compaired to compensation payouts for each passenger due to an unsafe aircraft falling out of the sky...

[HenryB]

Be careful, Thailand may start manufactureing their own planes.

Don't laugh it easy to build planes I heard that England builds planes

[deathmetalxxx]

Does this mean Thai passengers or people meeting them at the airport can sue when a flight is late?

Far better a plane be introduced late and safe than rushed to completion with large cracks in it like certain airport runways I could mention.

LOL ! I keep forgetting about those cracks...

deal with it. Suvarnabhumi is one of the best airports in the world, far superior to many crapbags called airports in western nations

[Jai Dee]

Airbus A-380 delivery to Thai Airways delayed by 21 months, TA seeks compensation

The Thai Airways company is drafting a 5 year plan to acquire Airbus A-330-300s in compensation for a 21 month delay in the delivery of the Airbus A-380 by Airbus Industries.

The President of the Thai Airways company, Flight Officer Apinan Sumanaseranee (อภินันทร์ สุมนะเศรณ), reported on Thai Airways 5 year plan to acquire 10 Airbus A-330-300 aircrafts in lieu of monetary compensation for the 21 month delay in the delivery of the Airbus A-380 aircrafts by the Airbus Industries company. Airbus Industries will be offering a discount on the aircraft purchase, while Mr. Apinan said that Thai Airways compensation for the economic loss in the aircrafts delay must not be less than that received by Singapore or Quantas Airlines in similar incidents. Mr. Apinan said that the Airbus A-330-300 was a medium range aircraft.

Thai Airways will also be negotiating for its prior down payment for the delayed Airbus A-380 as well as future payments for Airbus planes.

Source: Thai National News Bureau Public Relations Department - 21 December 2006

[Rinrada]

Airbus A-380 delivery to Thai Airways delayed by 21 months, TA seeks compensation

The Thai Airways company is drafting a 5 year plan to acquire Airbus A-330-300s in compensation for a 21 month delay in the delivery of the Airbus A-380 by Airbus Industries.

The President of the Thai Airways company, Flight Officer Apinan Sumanaseranee (อภินันทร์ สุมนะเศรณ), reported on Thai Airways 5 year plan to acquire 10 Airbus A-330-300 aircrafts in lieu of monetary compensation for the 21 month delay in the delivery of the Airbus A-380 aircrafts by the Airbus Industries company. Airbus Industries will be offering a discount on the aircraft purchase, while Mr. Apinan said that Thai Airways compensation for the economic loss in the aircrafts delay must not be less than that received by Singapore or Quantas Airlines in similar incidents. Mr. Apinan said that the Airbus A-330-300 was a medium range aircraft.

Thai Airways will also be negotiating for its prior down payment for the delayed Airbus A-380 as well as future payments for Airbus planes.

Source: Thai National News Bureau Public Relations Department - 21 December 2006

I use to get replys from TG/DM when I sent in my complaints over the years.....Rip off prices,No decent pubs,bad bus services from Bangers,ban smoking at Airport (yes it was me...)...etc..and i always got my very polite replys from their head honcho who was always a "Flight Lt." ...fair enough ...

Noticed however that the No 1 Guy -President even....is a.. Flying Officer .... ...eh ...Head of an Airline...

Dont they ever promote them to say General or Field Air Marshal with Golden Wings and BIG Expense Account...or summit.....wonder wot the corporals do?

[usatrader]

(April 2006)With a 2008 delivery date, more than 400 Dreamliners have been ordered. With Dollar lower even cheaper than originally priced vs Euro and Sterling..

http://www.consumeraffairs.com/news04/2006...dreamliner.html

Boeing has not yet delayed the launch of its key aircraft like the 787 Dreamliner, nor has it missed its delivery dates on the 747s. So far this year, Boeing has received orders for over 700 aircraft as of November 2006, whereas Airbus has received just over 200. This is due to serious delays in Airbus's $16 billion project called A380. They delays have been attributed to software incompatibilities between two locations working on the A380, and will ultimately cost Airbus $6 billion over the next 4 years.

Earlier this month, Airbus announced yet a third delay in the production of these aircrafts, pushing delivery date of A380 for its customers like UPS to May 2010 instead of the previous delayed date of September 2009. Such delays are causing commercial air carriers to review their Airbus orders and perhaps even switch to Boeing.

Again with the dollar lowering and more expected until the yet delayed delivery date of the 380, the edge may increase more for the 787 and cancellation for 380 will increase as well perhaps.

http://transport.seekingalpha.com/article/18988

A comparison of the 380 and 787...

http://www.smarttravelasia.com/AirbusVsBoeing.htm

We septics need the help falling apart in decline and doom as we are...

[Rinrada]

Airbus scores in Boeing battle with $2.7bn superjumbo deal

David Robertson, Business Correspondent...(times with thanks)

Airbus won a significant moral victory in its annual end-of-year orders battle with Boeing, its American rival, after gaining a $2.7 billion (£1.4 billion) order for the troubled A380 superjumbo.

The order from Singapore Airlines for nine of the double-decker aircraft is the first new commitment to the superjumbo this year. Singapore also said that it was taking options on a further six A380s.

This has been the A380’s annus horribilis, with production delays pushing delivery back two years later than Airbus was promising last year. The delays will cost the company €4.8 billion (£3.2 billion) in lost earnings and have claimed the scalps of two chief executives.

Problems with the aircraft have prompted FedEx to cancel an order for ten A380s and both Virgin and the International Lease Finance Corporation have deferred their orders.

The expression of confidence that Singapore Airlines is showing in the A380 will be greatly appreciated at Airbus’s Toulouse headquarters, where morale has been battered by this year’s difficulties.

However, analysts said yesterday that the Singapore order was first revealed during the Farnborough Air Show in July.

The hoarding of order announcements to the end of the year is a common tactic in the aerospace industry.

Every year Boeing and Airbus become obsessed by the need to win the order-book race and the salesforces of both companies pull out all the stops to complete deals by December 31.

As a result, there is usually a rush of order announcements in the final weeks of the year.

As well as the Singapore Airlines deal, Airbus yesterday announced the sale of 11 A320s to Singapore’s subsidiary, Silk Air.

Meanwhile, Boeing was basking in the news that Royal Jordanian Airlines was considering buying five 787 Dreamliners to replace its ageing Airbus fleet.

Airbus then countered with an announcement that it was selling two A320s to Israir — the first time an Israeli airline has bought non-Boeing jets.

Despite the flurry of late order announcements, it will be almost impossible for Airbus to overtake Boeing, making it the first year since 2000 that the Americans have won the order race.

Boeing has sold more than 865 aircraft in 2006, compared with about 700 sold by Airbus.

Boeing has scored particularly well with its new 787 Dreamliner, which will come into service in 2009.

With a 50 per cent carbon- fibre fuselage and new internal architecture, the Dreamliner has captured the attention of many airlines. Boeing has this year sold 144 of the aircraft, worth more than $23 billion at list prices.

In the past week alone, Boeing has sold 787s worth more than $1.1 billion.

Air New Zealand ordered an additional four 787s to add to the four that it has already bought and Kenya Airlines ordered three.

[Jai Dee]

Airbus offers Thai Airways discounted planes due to A380 delays

BANGKOK, Thailand: Airbus has offered Thai Airways a $10 million (€7.7 million) discount on each of eight A330-300 aircraft, with an option for four more, in compensation for delays in the delivery of the A380 suberjumbo, the airline's board said Friday.

Delivery of the first A380 is expected to be delayed about 22 months, forcing Thai Airways to reduce revenue projections, Thai Airways Chairman Chalit Pukbhasuk told a new conference after a board meeting that broke up around midnight.

The airline has ordered six of the long-awaited double-decker jumbos. Three of the A380s were originally scheduled to be delivered to Thai Airways in 2009 and another three in 2010.

Chalit said the board decided to continue negotiations with Airbus on the size of the deposit required for the A330-300s, the first of which could be delivered in late 2008 or 2009.

With the newly-offered discount, the A330-300s would cost $90 million (€69 million) each. Chalit said the board was likely to accept Airbus' offer because Thai Airways plans to retire dozens of planes over the next decade after 20 years in service. The carrier plans to retire three planes in the near future and a total of 40 in 10 years.

Chalit said it was still "possible" that Thai Airways would cancel the purchase of the A380s if it was not satisfied with the outcome of negotiations. Cancellation, however, would mean the airline would forfeit a total deposit of $97 million (€75 million) on the six aircraft, he said.

Board members were scheduled to meet again with France-based Airbus representatives Friday afternoon.

Any agreements made during the meeting still need final approval from the board and then the government before being finalized, he said.

Source: International Herald Tribune - 26 January 2007

[xbusman]

Odd, 90 million is about the average sales price of a A330. I think Thai Airways got hoodwinked a bit.

Actually its about time. Sounds like Thailand where the price is tripled and then a 10% discount if you push them. Good on airbus for being a tough negotiator.

[lomatopo]

TG needs the A330-300's to replace the A300-600's, and they currently operate 12 A330-300's, so a good deal all around. The only option would have been 777's. Unless one is intimate with all of the details of the contract (engines, interior, etc) it is impossible to tell who, if anyone, got hoodwinked. List used to be 124 - 131 million USD. In theory businesses each seek to maximize profits/benefits and usually reach a mutually satisfactory deal. I strongly suspect TG got a great deal, and Airbus gets to build out more older aircraft that they already know how to build, with associated cost reductions.

[xbusman]

Seriously, aircraft valuation firm Avitas says A330s went out the door for around $94 million on average in 2006, so $90 million strikes me as believable but hardly compensation for two years of lost revenue.

The other factor no one is talking about is how the cracks are going to effect the A380s when they come in 2010. They cant land at Don Muang and sounds like these heavy monsters might just punch straight through the new runways. Its not a plane that can be diverted to any local airport. Could get more interesting as time goes on, thankfully its only tax money we are talking about with AOT, Airbus and Thai, not real money that people earn and use.