Another disappointment for Airbus

Amy Scott Jan 19, 2007

TESS VIGELAND: Airbus could really use a break. But today is not the day for that to happen. The company’s had all kinds of bad news of late. It’s fallen behind its rival Boeing for the first time in six years. Mostly thanks to problems with its new A-380 super-jumbo jet. Now a French newspaper reports another customer is rescinding its orders for the cargo version of that jet.

Quel dommage!

Marketplace’s Amy Scott has more.

AMY SCOTT: The French paper Les Echo says the United Parcel Service is expected to cancel its order for Airbus’s much-delayed A-380 cargo plane. A few months ago rival FedEx did the same thing. The paper did not identify its sources, and Airbus and UPS won’t confirm the story. But if UPS did drop out, that would bring the remaining orders down to zero.

PAUL NISBET: Which probably for Airbus, under current circumstances, would be a blessing in disguise.

That’s aerospace analyst Paul Nisbet with JSA Research. He says Airbus has spent too much time and money on the A-380. The project is two years behind. Losing this last cargo order would allow the company to focus on developing its new A-350 passenger planes. They’re meant to compete with Boeing’s wildly successful 787 Dreamliner.

Ned Layard with the consulting firm Air Cargo Management says he believes UPS will cancel its order. But not until it can do so without penalty. If the project is delayed long enough, Layard says UPS can walk away free and clear.

NED LAYARD: You know and this sort of begs the question of most observers as to whether there’ll ever be an A-380 freighter. But we don’t happen to see it that way.

Layard predicts this plane will eventually be built. He says it offers more cargo space than any Boeing freighter. But he expects Airbus to delay production until the next decade. By then problems with the A-380 will have cost Airbus an estimated seven-to-eight billion dollars.

In New York, I’m Amy Scott for Marketplace.

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