Airline 'Down Under' Confirms Earlier Commitment

Australia's flagship carrier Qantas has a need, a need for more seats. Now it's going to get them with a few more of Airbus' new A380 superjumbo airliners.

Qantas already had 12 of the giant aircraft on order, but just one day after Singapore Airlines added nine more to its order, Qantas confirmed an earlier commitment to purchase eight more.

This brings order totals for the A380 to 166 -- that's eleven over the previous total before FedEx cancelled its ten-plane freighter order in November.

BBY transport analyst Fabian Babich told Bloomberg, "Its good news for Airbus. It's a greater level of commitment and a certain level of risk that previously existed from Airbus's perspective has now been eliminated."

Qantas is to take first deliveries staring in August 2008 -- almost two years behind schedule. The planemaker says installation issues with the giant airliner's 300 miles of wiring caught engineers off-guard. Analysts say the delay will cost Airbus and parent company EADS upwards of $6 billion.

The latest figures from Airbus predicts the A380 program will break even on development costs with the sale of aircraft number 420. The initial estimates on that number before Airbus announced massive delays with the program were closer to 270.

As for how the delivery delay is affecting Qantas, its CEO Geoff Dixon told Bloomberg, "We've reviewed capacity and made other arrangements and have coped quite well. Initially there was some frustration about it, but as in most airlines you deal with issues as they arise."

Singapore Airlines chose to keep details of compensation Airbus may have paid it for delivery delays confidential. The company's CEO would only say the pair have reached a "satisfactory agreement."

Details of compensation, if any, Qantas may have received are also being kept under wraps.

FMI: www.qantas.com, www.airbus.com