Airbus to payout $1.1 billion in compensation for delays in A380 programme
31 Jul 2008
Airbus will be paying out a whopping billion dollars by way of compensation payouts to airlines, it said yesterday. Despite the massive hit, parent EADS said its profits increased by almost half in the second quarter thanks to a ''remarkable order intake'' and cost savings.
EADS said it had booked a charge of $1.109 billion to cover compensation for late delivery of its A380 super jumbo, after announcing the latest round of production delays in May. It will now be building only 21 A380 super jumbos in 2009, four less than it had originally planned because of production delays.
The super jumbos costs about $327 million each and so far the Toulouse-based manufacturer has orders for around 200. It needs to sell a little more than 400 of these aircraft to break even on the programme.
EADS said it expects Airbus to capture more than 850 orders in 2008, despite a severe downturn in the global aviation market. This revised estimate is 150 more than what it had predicted in May.
