A380 delays will trigger penalties: Gallois

 

The head of Airbus parent EADS acknowledged on Wednesday the planemaker would have to compensate airlines for the latest delays to its A380 superjumbo, but said the penalties would not be as steep as those which helped to drive Airbus well into the red last year.

"Of course there will be compensation but not on the scale of what we saw before," Chief Executive Louis Gallois told RTL radio.

Airbus announced the fourth set of delays to the world's largest airliner on Tuesday, trimming production by one plane in 2008 and four in 2009. It left open the possibility of delays in the 2010 delivery schedule which has yet to be determined.

"It is bad news but not a catastrophe," Gallois said.

Airbus said on Tuesday it was too early to predict the financial fallout from the new delays to the plane, which is already running two years late.

Speaking shortly after EADS posted stronger than expected first quarter results overshadowed by a weak dollar, Gallois said the whole European aerospace industry was suffering because of the US currency's fragility against the euro.

He said Airbus was producing planes at a hedged euro rate of $1.16 while the dollar had weakened to $1.55 to the euro.

He repeated that EADS needed to reduce its euro costs and buy more of its supplies in dollars.

 

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