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Malaysian Air may seek compensation for A380 problems

Malaysian Airline System Bhd, the nation's biggest carrier, said it's seeking compensation from Airbus SAS because of a delay in the delivery of six A380 aircraft from the manufacturer.

Penerbangan Malaysia Bhd, the parent of Kuala Lumpur-based Malaysian Airline, placed a US$1.6 billion order for six A380 planes in December 2003, scheduling them for delivery in January 2007. With an average delay of six months, the plane will be delivered starting in July 2007 until May 2009, the airline said.

"We are naturally disappointed with this delay," Malaysian Airline's executive director Azmil Zahruddin said in a Sept. 11 statement. "We are considering our options on this matter."

Malaysian Airline joins Emirates, the largest customer for the A380, Qantas Airways Ltd and Singapore Airlines Ltd in seeking damages after the world's biggest maker of commercial aircraft said in June the first deliveries of the new 555-seat aircraft will be delayed as much as half a year. The delays are a blow for Toulouse, France-based Airbus, which is counting on the A380 to keep its sales lead over Chicago-based Boeing Co.

The A380, which will be the biggest passenger plane when it comes into service, costs US$282 million to US$302 million each, based on catalog prices.

Malaysian Airline will consider "reappraising" the deployment of planes for existing and future routes as well as its weekly frequencies to minimize the impact of the delayed A380 delivery, the carrier said.

The carrier last month reported a loss of 280.7 million ringgit (US$74.5 million) in the quarter ended June, compared with last year's profit of 26.6 million ringgit, after record oil prices raised fuel costs. Malaysian Airline is seeking to cut costs and boost long-haul flights to stem losses.

Singapore Airlines, Asia's most profitable carrier, plans to be the first airline to fly the A380 in December next year.
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