U.S. News

Airbus Loses Lone Order for A380 Freighter


The Airbus superjumbo program suffered a major new setback Friday as UPS canceled its order for 10 A380Fs, leaving the European aircraft maker with an empty order book for the suspended cargo version of its much-delayed flagship.

Atlanta-based UPS had only last week agreed with Airbus to postpone its first A380 delivery by three years to 2012. In a statement, the world's largest shipping carrier said it decided to cancel after Airbus halted development work on the freighter to focus on delivery commitments for the A380 passenger plane.

UPS "now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane," UPS Chief Operating Officer David Abney said in the statement.

"We no longer are confident that Airbus can adhere to that schedule," the company said.

The cancellation by UPS, four months after rival FedEx also scrapped its 10-plane order, leaves Airbus with no firm orders for the A380 freighter -- dealing a new blow to the A380 program, whose two-year delay has $6.6 billion (5 billion euros) off profit forecasts for 2006-2010.

"We respect the client's decision," Airbus spokeswoman Barbara Kracht said in response to the cancellation. "UPS is and remains a valuable and strong customer and business partner for Airbus."

The A380 program as a whole "is progressing well and in line with the new timetable, with the first delivery to the first customer in October 2007," she said.

UPS spokesman Mark Giuffre said the company, also known as United Parcel Service, is evaluating its options, but was not ready to say whether it will order other aircraft from Boeing or Airbus to make up for the cancellations.

"We're looking at our next steps," Giuffre said.

Boeing announced this week that it won orders for 51 commercial jets in February, double its total from the same month last year.

As to the Airbus decision, Giuffre said UPS did not know when it signed its revised agreement with Airbus last week that Airbus would divert employees from the A380 freighter program.

Shares of Airbus parent European Aeronautic Defence and Space had already tumbled earlier in the day on the freighter program freeze, announced late Thursday. The stock slid further after the UPS announcement, falling as much as $1.97 (1.49 euros), or 6.1%, in Paris trading.

The A380 setback came as French unions called for a one-day strike next Tuesday to protest 10,000 planned job cuts and the sale or closure of six Airbus plants under the "Power8" restructuring plan unveiled by Chief Executive Louis Gallois Wednesday.

German Airbus workers may join the strike, union officials said, along with staff at other EADS facilities in both countries.