Transportation Industry

Aircraft Finance & Leasing News - Europe

AirGuide Business, May 5, 2008

May 5, 2008

Aeroflot

Russia's largest airline Aeroflot will raise its dividend in 2007 despite lower profit. The company, which posted a net profit of RUB6.07 billion roubles (USD$256.8 million) to Russian Accounting Standards in 2007, said it would pay RUB1.52 billion in dividends or RUB1.367 per share, representing 25 percent of the annual profit. In 2006, it paid RUB1.287 per share from profit of RUB7.9 billion, a ratio of 17.9 percent. The state controls 51 percent in Aeroflot, which was previously the Soviet Union's sole carrier. Some 30 percent is controlled by the National Reserve Corporation of businessman Alexander Lebedev, around 10 percent is held by management and about nine percent is freely traded. May 1, 2008

Airbus

Airbus may run into problems selling some of its factory sites, and could be forced to further delay some deliveries on its A380 superjumbo, according to German media reports. The divestment of French plants in Meaulte and St Nazaire Ville to aerospace firm Latecoere may be terminated as financing the deal could be difficult in current market conditions, German daily Die Welt reported on Saturday, quoting Airbus Chief Operating Officer Fabrice Bregier. A decision will be taken in May, Bregier added. A spokeswoman at Airbus declined to comment. Latecoere is in exclusive negotiations to buy control of two Airbus factories at Meaulte in northern France and and Saint-Nazaire in western France. The divestment process is a key plank of Airbus's "Power 8" restructuring plan aimed at cutting costs in the wake of damaging delays to its aircraft production timetable, and in the face of a strong euro. May 4, 2008

Airbus

Die Welt and German business magazine WirtschaftsWoche also said Airbus may have to further delay deliveries of its A380 superjumbo, the world's largest airliner. The magazine said, citing an insider, Airbus would not be able to meet its target of delivering 25 planes in 2009 due to mounting production problems, and that the company had already informed customers of the delay in a letter. The plans are opposed by unions and caused political fireworks in France and Germany last year, while the relentless rise of the euro against the dollar has led Latecoere, which makes doors for Airbus and Boeing, to move its own production out of the euro zone. Asked for a reaction, the spokeswoman at Airbus cited comments Chief Executive Tom Enders made on Tuesday in the United Arab Emirates on the A380 superjumbo's delivery targets. Airbus has not ruled out fine-tuning the A380 delivery timetable, which has already slipped three times. Deliveries of the A380 have fallen almost two years behind schedule after a series of industrial problems since 2005. The A380 went into service last year with Singapore Airlines but is heavily bankrolled by Dubai-based airline Emirates, which ordered 58 of the USD$300 million planes in a historic civil aviation order worth over USD$17 billion. May 4, 2008

Airbus

Airbus paid Dubai's Emirates USD$110 million during the last year in compensation for the late delivery of the A380, of which the Arab carrier is the largest customer, Emirates said. Emirates, which has ordered 58 of the world's largest passenger planes, received AED404 million dirhams (USD$110 million) during the year to March 31 in "liquidating damages", according to its annual report released on Wednesday. Liquidating damages refers to compensation from parties who failed to meet contractual obligations with Emirates, the largest Arab airline. There were none the previous fiscal year. "A large part of that was part of the compensation deal for the delay of the A380s," Emirates President Tim Clark said in Dubai on the day the state-owned carrier said profit rose 62 percent to AED5.02 billion dirhams in the year to March 31. Clark declined to give further details about the compensation agreement with Airbus, following a near two-year delay in the delivery of the 525-seat, double-decker planes. Airbus Chief Executive Officer Tom Enders told reporters in Dubai on Tuesday that meeting a new schedule for delivering the A380 to customers was a "battle" and always of concern. The reputation of parent EADS is seen at stake as it strives to deliver 13 of the planes this year. Clark said he was confident he would receive five A380s before March 31, and expects to received another 12 in the year to March 31, 2010. "It would be a huge blow if there were further delays," Clark said. "There are rumors that are starting to rattle" about further delays, he said. May 1, 2008

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