Qantas “orders” more A380’s or are they?

Qantas announced yesterday that despite the current delay debacle, the airline was ordering another eight Airbus A380’s, throwing the troubled aircraft manufacturer what appeared to be a confidence lifeline.

All is not quite as it appears though, as while Qantas appears to be ordering another eight A380’s, the reality is that the Australian carrier already had a firm commitment to purchase twelve A380’s and options in place to purchase a further twelve.

A Qantas spokesperson confirmed to The Mole yesterday that the announcement reveals that Qantas is actually only taking up eight of the further twelve option, therefore not ordering the full twelve with the reality being a shortfall of four.

The confirmation of part of the option available to it nevertheless does make Qantas the second biggest A380 customer behind Emirates, which has forty five on order.

As a result of Airbus’ ongoing delivery delays, Qantas was in a very strong negotiating position, having already announced compensation from Airbus of $A104m, but the Qantas spokesperson would not confirm to The Mole if the announcement was part of a further comprehensive delay compensation deal by Airbus to the carrier, only confirming that a very attractive package had been negotiated, with the twenty aircraft to be delivered between 2008 and 2015.

The Qantas spokesperson would also not confirm the amount of money being spent by Qantas with CEO Geoff Dixon saying in a press release that Qantas would use a combination of outright purchase and operating leases in acquiring the aircraft and that all the costs of the new aircraft would be met by operating cash flows.

Qantas’ “order” follows Virgin Atlantic confirming last week that it was pushing back delivery of its first Airbus A380 by four years, claiming to be giving Airbus time to sort out the wiring problems the manufacturer is encountering.

Virgin Atlantic said that it still intended to take delivery of all six of the USD$300 million planes it has on order, but that it had reached agreement in principle with Airbus to defer deliveries of its Airbus A380 aircraft until 2013.

Virgin Atlantic also said that by then they believe that the A380 will have proven its innovative design over several years in commercial service and the deferral would also enable Airbus to prioritize production and deliveries for its launch customers, such as Singapore Airlines, set to be the first airline to fly the A380 -interestingly Singapore Airlines is a substantial 49% shareholder in Virgin Atlantic.

Virgin Atlantic says that they have extended leases of several of Boeing 747-400 aircraft in to meet fleet needs and future growth plans, but would not comment on whether Virgin had sought financial compensation for delays to A380 deliveries.

Emirates President, Tim Clark, also told reporters in London last Friday that Emirates was concerned that the A380 was 5.5 tonnes heavier than expected and that Emirates would be sending its own audit team to the Airbus factory in Toulouse, France, to assess whether there could be further delays.

Qantas CEO Geoff Dixon, said that after making three visits to the Airbus factory in recent weeks he was convinced the A380 was the “right aircraft” for Qantas’ dense long-haul routes, such as Los Angeles and London.

He also said that the agreement with Airbus included that there would be no further delays, with delivery slide options available to Qantas should the airline wish to defer delivery.

Qantas also announced yesterday that as part of the package to secure the additional A380s, Qantas will acquire four A330-200s and it also announced plans to buy five Boeing 737-800’s for use in the Australian domestic market.

Report by The Mole