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Last Updated: Friday, 13 October 2006, 16:27 GMT 17:27 UK
Emirates warns on Airbus delays
Airbus A380
The flagship Airbus A380 has been hit by production delays
Airline Emirates has warned that it may cancel some of its order for 43 giant Airbus A380 planes if there are any further delays to the troubled project.

Emirates said it planned to "stick with the order for now", but said "cancellations" remained an option.

Emirates' comments come after Airbus said production setbacks would lead to a two-year delay in A380 deliveries.

The European planemaker has warned of "painful job losses" ahead as it shakes up the flagship superjumbo project.

The prospect of cutbacks at Airbus factories has roused the concern of European leaders, with French President Jacques Chirac and German Chancellor Angela Merkel saying job losses should be shared between the countries.

Virgin pressure

Emirates chief executive Tim Clark said he was looking for Toulouse-based Airbus, which is owned by Franco-German aerospace giant EADS, to put its "house in order"

"We have invested a lot in ground facilities so we have to stick with the order for now," Mr Clark told Dow Jones Newswires.

"We cannot wait forever but at this point there is nothing that comes close to the A380 as far as seat capacity."

Separately, UK airline Virgin Atlantic said it had sent Airbus a new set of proposals relating to its order for six of the 555-seater A380 superjumbos.

Virgin Atlantic refused to comment on the contents of the proposals, but said it expected a response from Airbus by the end of next week.

Job assurances

Meanwhile, on Friday, EADS rubber-stamped its purchase of the 20% stake of Airbus it did not hold, from BAE Systems for 2.75bn euros ($3.4bn; 1.85bn).

Setbacks at Airbus have led to interested parties reviewing their share ownership of EADS, in a bid to defend jobs and production.

The conservative premier of the German state of Lower Saxony said he would not rule out all German states buying a stake in EADS after carmaker DaimlerChrysler said it was looking to cut its 22.5% holding.

The Spanish government has also said it is considering almost doubling its 5.5% stake in EADS.

In the UK, where EADS employs 13,000 workers and builds wings for its planes, unions have called on management to give assurances over jobs.

The delays to the Airbus A380 are set to cost the company $6.1bn (3.3bn) over the next four years.

Airbus has sold 159 of the $250m jets to 16 airlines, many of whom are already demanding penalties for late delivery.


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