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Airbus to cut back on A380 deliveries news
07 May 2009

Airbus SAS, the world's largest commercial-aircraft maker,  has scaled back its delivery schedule for the A380 super jumbo as airlines resist accepting large planes when demand for air travel is depressed by the global recession.

Airbus said that it had cut its planned production of A380s this year to 14 planes from 18. "Customers approached us and we are adapting our schedule to their needs," said Airbus spokesman Stefan Schaffrath.

As recently as mid-March, Airbus had said it expected to deliver 18 A380s this year. The cut is linked to previously announced delivery deferrals at Australia's Qantas Airways Ltd. Air France and India's Kingfisher Airlines Ltd have also deferred their A380 purchases.

Airbus, a unit of European Aeronautic Defence and Space Co, said in a statement that the reduction will have "no significant impact on EBIT," or earnings before interest and taxes this year. Airbus said it "will take mitigating actions against the negative effects" of the shift on free cash flow.

Airbus said it plans to deliver "more than 20" super jumbos next year. This is its first recent announcement of a delivery target for A380s next year. The A380, the world's largest passenger plane, carries a catalogue price of $327 million, but early customers received significant discounts, airline officials have said.

Global international airline traffic fell 11 percent in March, accelerating a decline that began in September, the International Air Transport Association said 28 April. The outbreak of swine flu, which began in late April, has worsened the short-term forecast for air travel. Production of the A380 is already running two years late because of problems with installing wiring.

The super jumbo has been plagued by troubles since its first flight in 2005, when Airbus announced that initial deliveries would be six months late. Airbus later announced more delays due to production problems that pushed the plane more than two years behind schedule and several billion dollars over its original $12 billion budget. Schaffrath said the new reduction was due solely to customer demand, not manufacturing issues.

The shift comes amid a string of production cuts on smaller models at Airbus, US rival Boeing Co and Brazil's Empresa Brasileira de Aeronautica S/A, or Embraer, as airlines worldwide struggle with plunging passenger demand.

Airbus in October said it would shelve plans for a production increase this year. In February it announced plans to cut deliveries of its popular single-aisle models to 34 planes per month from 36 and consider further cuts.

Boeing in April said it would cut production of its large 777 model to five planes per month starting in mid-2010 from seven planes per month now. Embraer early this year also announced production cuts. Airbus in its statement reiterated plans to deliver roughly as many planes overall this year as it did last year, when it produced 483 jetliners, a record level.

Qantas, which already has three super jumbos in its fleet, said last month that it will take its next three A380s this year but defer the following four. One of those four was planned to be delivered this year and the rest in 2010.

Emirates President Tim Clark said in March that the airline expects to get seven A380s in its current fiscal year, but one of those deliveries had shifted from December to next January.

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Airbus to cut back on A380 deliveries