The Beijing News quoted an unnamed insider as saying that the compensation could possibly help China Southern get back into the black.

Neither Airbus nor China Southern confirmed the report.

The Guangzhou-based airline ordered five A380s last year and was expected to receive the first one at the end of 2007 and the second in 2008. The two jets were planned to serve the 2008 Beijing Olympics. The airline reported a net loss of 825 million yuan (US$104 million) in the first half of this year.

Airbus is working on the fuselages of two A380 jets ordered by China Southern, which are currently being assembled in Hamburg, Germany.

Airbus said last week that the A380 delivery would be further delayed, the second announcement of a delay in less than six months. Fellow A380 customer Singapore Airlines will receive its first jet in October next year, 10 months behind schedule. Airbus has slashed its delivery targets to 13 in 2008 and 25 in 2009.

The company said the delay was caused by problems with the installation of the 480 kilometres of wiring aboard each plane.

Christian Streiff resigned on Monday as chief executive of Airbus. He is the second top official to step down due to the A380 delivery delay. Gustav Humbert resigned after the announcement in June.

(China Daily 10/12/2006 page10)

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