A-380, Dreamliner delays may prove boon for carriers

Delays in the deliveries of the next generation Airbus A380 super-jumbo aircraft and the Boeing 787 ‘Dreamliner’ planes are turning out to be a blessing in disguise...

Delays in the deliveries of the next generation Airbus A380 super-jumbo aircraft and the Boeing 787 ‘Dreamliner’ planes are turning out to be a blessing in disguise for airlines in the country. Not only will airlines be pushing for compensation from the two aircraft makers for ‘losses owing to postponement of planned induction’, but with crude oil prices crossing $ 135 a barrel, delays in inducting the next-gen aircraft will also mean significant fuel savings.

State-run National Aviation Company of India Ltd (NACIL) which runs the Air India-Indian combine claims that delays in the delivery of the Dreamliner is no cause of worry. “Most airlines are scaling down their capacity expansion plans. A delay in delivery suits us very well, since there is a general slowdown in the industry and we can easily do without the B787 addition at this point in time,” a senior NACIL official said. “Meanwhile, we are also going to claim compensation from Boeing on delayed deliveries. It’s a win-win.”

Air India was scheduled to receive the first of the 27 Dreamliners on order in the second half of 2008, the deadline has now been pushed to February 2009. Jet Airways, too, is scheduled to receive10 Dreamliners from the company and the company has said it will push for compensation if the delay extends beyond the current six months. Kingfisher Airlines, which has ordered five A380 super-jumbos, is also taking the delay comfortably in its stride. “No one’s in a hurry to get the aircraft because of the way the industry is moving,” a Kingfisher airlines official said. “As it is, airport infrastructure in the country is so poor that there is no way that such aircraft will be able to land. Except for Hyderabad international airport, no other airport can accommodate the A-380. Even Delhi International airport doesn’t come close.” Kingfisher has placed five firm orders and five optional orders for the super-jumbo aircraft. While the carrier had expected deliveries to come in by late 2010, it had been pushing for pre-poning deliveries to end of 2009. With the delay however, it seems unlikely that any deliveries of the A380 would be made before 2010-11.

“No decision has been made on compensations for delayed delivery,” the Kingfisher official said. Fuel constitutes 40 per cent of an airline’s operational cost and has been making a big dent on airline profitability. To cope with losses, most airlines including low cost carriers SpiceJet, IndiGo and others have been pushing back planned capacity additions and have been exploring options to give their new fleet additions out on wet-lease.