October 31, 2018 / 12:09 PM / a year ago

Airbus in talks to unjam some HNA, Emirates deliveries: sources

HONG KONG/DUBAI (Reuters) - Airbus faces new headaches delivering A330s to airlines tied to China’s cash-strapped HNA Group and is in separate talks with Emirates over the timing of undelivered A380 superjumbos.

A logo of Airbus is pictured at the entrance of the company's delivery center in Colomiers near Toulouse, France, July 10, 2018. REUTERS/Regis Duvignau

Industry sources pinpointed the unrelated problems as the reasons for commercial “challenges” disclosed by Airbus on Wednesday.

The planemaker said with quarterly earnings that it hoped to resolve by year-end unidentified commercial issues surrounding the current-generation A330ceo and the A380 superjumbo as it tries to soften the decline of two key long-haul models.

Wide-body A330 sales are slowing as many airlines opt for new-generation planes like the Airbus A350 or the Boeing 787.

Companies belonging to the troubled Chinese aviation-to-finance conglomerate HNA delayed payments for months earlier this year, leading Airbus to pause deliveries rather than step in to finance the aircraft itself, Reuters reported in July.

Questions over A330 deliveries to HNA have resurfaced due to financing issues, the sources said. The parties “are finding a solution,” one added.

Under pressure from Beijing, HNA Group is in the process of selling some $20 billion of assets, according to Reuters calculations and media reports, following a $50 billion acquisition spree.

Airbus declined comment. HNA could not immediately be reached.

On the A380, Airbus is in negotiations with Emirates, the single largest customer, over the timing of superjumbos built and scheduled for delivery this year, industry sources said.

Emirates and Airbus agreed two years ago to delay the delivery of 12 A380s; six were to be delivered in 2018 instead of 2017, and a further six delayed from 2018 to 2019. Emirates declined to say whether any of those jets have been delivered.

“This is a matter between Emirates and Airbus,” an Emirates spokeswoman said. Airbus also declined comment.

Some industry sources questioned Emirates’ ability to absorb new A380s at this stage.

One source said Emirates did not need them for now and had parked a number as part of efforts to manage capacity.

The airline is also managing a pilot shortage which has forced it to cancel some flights this year.

The latest uncertainty comes on top of a standoff between Emirates and engine makers over a contract needed to keep alive the airline’s order this year for up to 36 more A380s, whose production is threatened with closure if the deal crumbles.

It has invited General Electric-Pratt & Whitney venture Engine Alliance and Britain’s Rolls-Royce (RR.L) to bid.

Airbus has meanwhile moved to shore up demand for the A330neo, another slow-selling model derived from the A330ceo.

Kuwait Airways ordered 8 of the jets this month but sources said the deal involved a switch of jets meant for Hawaiian Airlines, which had canceled them and defected to Boeing.

As part of the deal, Airbus is expected to allow Kuwait to cancel some orders for newer and pricier A350s, they said.

Additional reporting by Stella Qiu, Jamie Freed; Editing by Luke Baker and Elaine Hardcastle

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