Southeast Asian Airline Wants Its Pound Of Flesh

State-owned Thai Airways is now demanding Airbus pay fines and compensation for delivery delays of the A380 superjumbos it's ordered.

Thai Airways president Apinan Sumanaseni told AFX News Limited, "Negotiations with Airbus started last month and remain underway, with the exact amount of the fines still not decided. We also demanded other forms of compensation for damages caused to our business."

The airline was to receive the six A380s it ordered in 2009, but like everyone else on the order list has been told to expect them 22 months later.

At list prices, that order is worth $1.7 billion, but a spokesman for the airlines says their order was less that.

Sumanaseni said, "We aim to conclude the negotiations [with Airbus] this month. Then, it would be subject to the [airline's] board's consideration by mid-December for a final decision."

He said despite the airline's calls for fines and compensation, it still hasn't ruled out cancelling the order completely.

"It depends on the negotiations. If we are not satisfied with the results, the deal needs to be canceled," he said.

To date, only Fedex has cancelled its order for the tardy aircraft, but several airlines still haven't said what their final plans are.

Presumably, holding cancellation over Airbus' head might lead to better terms for any finalized deal. Airbus has said it needs to sell around 550 of the superjumbo airliners to break even on its development costs. The planemaker's customers likely believe it will go to great lengths to hold onto the 150 or so orders it now has.

No matter how things turn out, Airbus is sure to be the biggest loser.

FMI: www.thaiair.com, www.airbus.com