Air Transport

China Southern Airlines' plans to have the Airbus A380 in service in time for the Beijing Olympics in 2008 have gone up in smoke following the latest delivery delay. The airline's first aircraft is not now due to arrive until 2009.

According to the state-run Xinhua news agency, China Southern - which has five A380s on firm order - had hoped to have the first in service before the August 2008 Olympics to cater for the expected surge in demand for air travel to the country. The first aircraft will now not be delivered until 2009.

Xinhua also quotes a state-run newspaper as saying Airbus may have to pay the airline $250 million in compensation for its late deliveries.

China Southern company secretary Su Liang declined to comment on the compensation report, and says that the airline does not know when exactly its first aircraft will be delivered. Airbus China will also not say when the first aircraft will be delivered to China Southern.