UPS Seen Canceling Airbus A380 Order

Friday, 19 Jan 2007 | 3:37 AM ET

Package delivery company United Parcel Service is expected to cancel an order for 10 freighter versions of the Airbus A380 superjumbo plane next week, French newspaper Les Echos said on Friday without citing sources.

For its part Airbus, owned by aerospace group EADS, could announce it will first focus on solving its problems with the passenger version of the A380 and await better times for it to produce a cargo version, Les Echos said.

But an Airbus spokeswoman said she had no information on the reported plans. Wiring installation problems have delayed deliveries of the double-decker plane by an average of two years, with the first delivery now due in late 2007 to Singapore Airlines, and led EADS to issue its third profit warning in less than a year on Wednesday.

A cancellation by UPS would follow a similar decision by its main rival FedEx. which in November became the first company to cancel an A380 order, citing delivery delays.

UPS already said last year it was in no rush to decide on whether it would go ahead with the order as it had enough other planes scheduled for delivery over the next two years to cover its immediate needs.

Airbus shares closed at 24.07 euros on Thursday.

Malaysia on Thursday lifted the threat of canceling an order worth $1.8 billion at list prices for A380 superjumbos by national carrier Malaysia Airline System. The world's largest jetliner has 555 seats.

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