Airbus Will Pay China Southern $250 million

October 12, 2006 at 12:01 pm (China, Companies)

Following yesterday’s post about Airbus, a Chinese airline company will be compensated with $250 million from Airbus for the delay of the delivery of A380.

China Southern, an embattled airline company that has been in the red, will be paid by Airbus, said Xin Jingbao, a Beijing local newspaper. The newspaper said it’s the largest compensation that Airbus has ever promised for its repetitive postponing on A380 delivery.

The windfall, if confirmed by the European plane maker, will turn China Southern from the red to the black.

According to Airbus’ current schedule, China Southern will not be able to get A380, the largest airplane in the world, before the 2008 Olympics. Market analysts said the huge plane can only do China Southern good if it is delivered before the Olympics. The plane is of more importance on the airline company’s brand than on practical operation, as the cost of running such a huge plane will be more significant than the real profit.

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