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PanAm_DC10
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MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:02 pm

Sept. 12 (Bloomberg) -- 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.

``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.


This is the fourth carrier to seek compensation, does this mean that other Launch carriers have the right to claim as well?

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manni
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:14 pm

"We are considering our options on this matter"

Perhaps an indication that negotiations for an A350 order are pending? Or a follow up order to the initial 6 ordered.
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Shenzhen
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:17 pm

Quoting Manni (Reply 1):
Perhaps an indication that negotiations for an A350 order are pending? Or a follow up order to the initial 6 ordered.

or cancellation, considering they are bleeding red?
 
WINGS
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:21 pm

Quoting Shenzhen (Reply 2):

or cancellation, considering they are bleeding red?

Ok, and how did you come to this conclusion? When in the report mentions the following. Try not to get carried away.

Quoting PanAm_DC10 (Thread starter):
``We are naturally disappointed with this delay,'' Malaysian
Airline's executive director Azmil Zahruddin said in a Sept. 11
statement.

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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:24 pm

Quoting Manni (Reply 1):
Perhaps an indication that negotiations for an A350 order are pending? Or a follow up order to the initial 6 ordered.

That does not always mean an A350 or extra A380 orders, but obviously Airbus will do what ever it takes to make MAS happy and obviously keep Airbuses cash flow and/or order book happy
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Udo
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:27 pm

Quoting Shenzhen (Reply 2):
or cancellation, considering they are bleeding red?

Why would they cancel when they can get the A380 cheaper as expected thanks to a possible compensation?


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Shenzhen
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:29 pm

Quoting WINGS (Reply 3):

Ok, and how did you come to this conclusion?

About the same way that a follow on order would come out of the "considering our options" statement.

Simply adding a minus to the plus to equal both out.

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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:30 pm

Quoting Shenzhen (Reply 2):
or cancellation, considering they are bleeding red?


Malaysia is famous for wanting everything big - world's tallest building, world's tallest airport control tower, the region's biggest airport.... I don't see why they should stop there and not go through with world's biggest passenger airliner. It goes too well with everything big we have here  

[Edited 2005-09-12 11:32:51]
 
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 6:36 pm

Quoting Udo (Reply 5):
Why would they cancel when they can get the A380 cheaper

I wasn't being serious... but if ordering more A380s is an option, then cancelling certainly could be an option also.

Most contracts in the world allow you an out after one side doesn't deliver after X amount of time. A380 contract with MAS.. haven't a clue.

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breiz
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 7:37 pm

Quoting PanAm_DC10 (Thread starter):
Sept. 12 (Bloomberg) -- 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.

``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,''

However, a senior Minister is reported to have said today that: "Malaysia Airlines is unlikely to suffer any fallout from the six-month delay in Airbus delivering its new super-jumbo A380 aircraft"
 
aviasian
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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 11:19 pm

Quoting PanAm_DC10 (Thread starter):
Ok, and how did you come to this conclusion? When in the report mentions the following. Try not to get carried away.

MAS recently announced a hefty quarterly loss of more than US$70 million - along with the "retirement' of the airline's Managing Director . . . a new MD has since been found - a Malaysian who had previously worked for Shell. Along with this announcement came the revelation that previous quarters' profits were derived from one-off items.

Maybe that's how Shenzhen came to that conclusion.

There were even reports that the MAS' plans to replace its B737-400 fleet could be in jeopardy. You will also be hearing of "an accord" between AirAsia and MAS that will affect the domestic operation of MAS.

MAS is certainly not in a position to purchase A350s for a while yet.

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RE: MAS Seek's Compensation For A380 Delay

Mon Sep 12, 2005 11:28 pm

Quoting KEno (Reply 7):
Malaysia is famous for wanting everything big - world's tallest building, world's tallest airport control tower, the region's biggest airport.... I don't see why they should stop there and not go through with world's biggest passenger airliner. It goes too well with everything big we have here

... And especially when pride has something to do with it, when you look south from Johor Bahru !

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RE: MAS Seek's Compensation For A380 Delay

Tue Sep 13, 2005 11:03 am

Quoting Breiz (Reply 9):
However, a senior Minister is reported to have said today that: "Malaysia Airlines is unlikely to suffer any fallout from the six-month delay in Airbus delivering its new super-jumbo A380 aircraft"

That is correct. The news report has since been updated and the following added which was not available to post yesterday.

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.


So they'll most definately be taking delivery of them.

Quoting Aviasian (Reply 10):
Quoting PanAm_DC10 (Thread starter):
Ok, and how did you come to this conclusion? When in the report mentions the following. Try not to get carried away.

Aviasion Respectfully, to clarify, you have attributed a quote to me that I did not make. The text you quote is reply #3 So I cannot answer as I did not draw that conclusion  Wink

What I find most interesting is that no-one has answered my original question though of note, all 4 carriers mentioned have outstanding RFP's which will make for quite interesting orders into year end.

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RE: MAS Seek's Compensation For A380 Delay

Tue Sep 13, 2005 11:25 am

Quoting Udo (Reply 5):
Quoting Shenzhen (Reply 2):
or cancellation, considering they are bleeding red?

Why would they cancel when they can get the A380 cheaper as expected thanks to a possible compensation?

MAS will be missing the six months profit from operating the A380, so it won't be any cheaper, or are you trying to say that the A380 does not operate at a profit?

Just wondering...  Smile
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RE: MAS Seek's Compensation For A380 Delay

Tue Sep 13, 2005 11:35 am

what he is saying is (lets say for the discussion) Airbus will 'give' MAS $50million in penalties for being late with the A380, thus making the A380 purchase $50million cheaper.

The problem with this statement is that it is not true, the $50million (or whatever the number is) is to make up for lost revenue, not to make the planes cheaper.
 
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RE: MAS Seek's Compensation For A380 Delay

Tue Sep 13, 2005 5:20 pm

Quoting Clickhappy (Reply 14):
what he is saying is (lets say for the discussion) Airbus will 'give' MAS $50million in penalties for being late with the A380, thus making the A380 purchase $50million cheaper.

The problem with this statement is that it is not true, the $50million (or whatever the number is) is to make up for lost revenue, not to make the planes cheaper.

It's still cheaper than canceling the orders and order other planes instead that will come even later with even more lost revenue... In economic terms, the 6-months delay is a so called "sunk cost" (i.e. there is nothing you can do about it - can't really make it up by ordering other planes). So if MAS does get some penalties, yes it will in fact make it cheaper than today's situation, which is what Udo said. Take you're point though that it isn't cheaper than the original pre-delay situation (but that's NOT what Udo was talking about).


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Udo
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RE: MAS Seek's Compensation For A380 Delay

Tue Sep 13, 2005 6:03 pm

Quoting EmmenezMoi (Reply 15):

Thanks EmmenezMoi, that sums it up quite well. My guess is MAS will still be better off financially in the end, despite a loss of revenue.


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Udo
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