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Emirates-Airbus International Trade Deal Faces Delay [ August 19, 2006 ]
 

Airline Emirates warned Airbus last week regarding the further prorogation of their international trade deal. According to Emirates, it might reduce the number of its aircraft order if further delays took place during the project. It must be noted that Emirates agreed to purchase 45 A380 superjumbo planes, thus, becoming Airbus's biggest client. The airline company though, faces a 10-month delay in the first shipment of its planes. This is the second time Airbus has announced a delay in the project because of wiring problems. The delay, which has covered two years, has not only resulted in huge losses on the part of Airbus, but it has also affected all the 16 airlines, including Emirates, which closed an international trade deal with Airbus. Although the Emirates said that it is still decided to stick to its current order, it also dissuaded that it might consider some cancellations in the event of further delays.

The airline company gave its warning after Airbus announced that its production and shipment of the A380 superjumbo would be delayed in a total of two years. Moreover, the European aircraft maker has also dissuaded that it might cut jobs because of the losses caused by the delay in the project. Meanwhile, both German Chancellor Angela Merkel and French President Jacques Chirac expressed their concerns on Airbus' announcement saying that the job cuts should be divided between the nations. At the same time, Tim Clark, the current chief executive of Emirates, commented that he was expecting Airbus to settle the current problems it was encountering regarding the project. Mr. Clark further said that his company has made a lot of investments in ground facilities and that it would stick with its order under the international trade deal.

Meanwhile, UK airline company Virgin Atlantic, which also closed an international trade deal with Airbus, said that it had already sent the European plane maker new proposals concerning its six orders of A380 555 seater superjumbo. Virgin Atlantic, however, declined to give the details of its proposals. According to reports, the long delay of the project would cost Airbus around $6.1 billion losses in four years time. In separate international trade deals, the European plane manufacturer has sold a total of 159 A380 superjumbos to 16 airline companies, many of them are already seeking for delay penalties. Here are Airbus' clients and their respective orders in the project: Emirates (43), Lufthansa (15), Qantas (12), Air France (10), Singapore Airlines (10), Fedex (10), International Lease Finance (10), UPS (10), Thai Airways (6), Virgin Atlantic (6), Korean Air Lines (5), Etihad Airways (4), Qatar Airways (2), China Southern Airlines (5), Kingfisher Airlines (5), and Malaysia Airlines (6).



 

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