With A380 delays, Airbus offers THAI discounted A330s

Airbus has offered Thai Airways a US$10-million (Bt358 million) discount on each of eight medium-range A330-300 aircraft, with an option for four more, in compensation for delays in the delivery of six A380 superjumbo jets.

Four board members - Sirin Nimmanahaeminda, Pichai Chunhavajira, Sivaporn Dardarananda and Apinan Sumanaseni, who is also THAI president - have been appointed to the negotiating team, THAI chairman Chalit Pukbhasuk said late on Thursday.

Following a meeting with Airbus representatives yesterday, Apinan said Airbus had also proposed paying THAI a total of $28 million in compensation for the delayed delivery of the six superjumbo jets. "We've reached no agreement. The compensation should be higher," he said.

Chalit added that any details ironed out in the meeting would have to be referred to the board of the state-owned company and then to the Cabinet for approval. He added that no date had been set for the next board meeting.

Delivery of the first A380 is expected to be delayed about 22 months, forcing the national carrier to reduce revenue projections, Chalit said.

The airline has ordered six of the long-awaited double-decker jumbos. Three were originally scheduled for delivery in 2009 and another three in 2010.

Chalit said the board decided to continue negotiations with Airbus on the size of the deposit required for the medium-range A330-300s, the first of which could be delivered late next year or in 2009.

With the newly offered discount, the A330-300s would cost $90 million each. Chalit said the board was likely to accept Airbus' offer, because THAI planned to retire dozens of planes over the next decade after 20 years in service. The carrier plans to retire three planes in the near future and a total of 40 in 10 years.

Chalit said it was still "possible" that THAI would cancel the purchase of the A380s if it were not satisfied with the outcome of negotiations. Cancellation, however, would mean the airline would forfeit a total deposit of $97 million on the six aircraft, he said.

Chalit said the discounted price of the A330-300 aircraft - $90 million each - would not be subject to further negotiations.

The delays in delivery of the A380s will reduce revenue projections, because each of the aircraft seats about 500 passengers, while the A330-300 seats about 300, said Chalit.

He said that in order to retire the old fleet, THAI needed 24 new aircraft in the next five years and another 40 in the five years after that - 64 new aircraft total in the next decade. Added to the new fleet will be Airbus A330-600s, Boeing 747s and Boeing 777s.

Apinan added that delayed delivery of the six Airbus A380 superjumbos would affect THAI operations, because THAI needed aircraft that offered 550 seats, rather than the 390-seaters now in service.

"If we can't have aircraft with more seats, our operating costs will rise."

The Nation, Agencies

The Nation Thailand
Sunday January 28, 2007