Europe's
Airbus (AIR.PA)
lost a major order on Wednesday when Dubai's Emirates airline [EMIRA.UL]
cancelled its entire purchase of 70 Airbus (AIR.PA)
A350 jets, dealing an unexpected blow to the planemaker and engine maker
Rolls-Royce (RR.L).
The
decision cuts the order book for the European company's newest jet, which is
due to enter service in around six months' time, by around 10 percent.
Airbus said
it followed a "fleet requirement review" as Emirates shifts towards
the large A380 superjumbo, for which it is the biggest customer.
Emirates was
among the first buyers for the A350 rival model to Boeing's (BA.N)
787 Dreamliner when it placed the order for 50 A350-900 and 20 A350-1000 jets
in 2007.
The deal was
worth around $16 billion at 2007 list prices - or close to $22 billion based on
the current catalogue - although launch customers typically negotiate
discounts.
Emirates was
due to start taking deliveries of the A350 in 2019. The first A350 is due to be
delivered to Qatar Airways in the fourth quarter of this year. "We are
confident that we will sell the (production) slots in the coming months,"
an Airbus spokesman said. "There's no impact on the programme as
deliveries were scheduled to start at the end of the decade."
Airbus shares
were down 3.3 pct in early trading in Frankfurt (AIRG.DE),
with the news expected to cast a shadow over two days of briefings for the
media at Airbus' headquarters in Toulouse on Wednesday and Thursday.
Emirates has
been pushing for Airbus to upgrade the A380 superjumbo with a more efficient
engine, after increasing its total orders for the world's biggest passenger jet
by 50 in November to 140 planes.
The carrier's
chief executive, Tim Clark, said earlier this month that a revamped A380 could
have a 10-12 percent performance improvement and that "we are hoping to
move on that pretty soon".
Emirates is
also in the process of firming up an order for 150 of Boeing's latest jetliner,
the 777X mini-jumbo, of which Emirates has ordered 150 worth $76 billion at
list prices.
Asked about
the A350 order cancellation on Wednesday, an Emirates spokesman said: "The
contract which we signed in 2007 for 70 A350 aircraft has lapsed. We are
reviewing our fleet requirements."
Airbus said
in a statement that it remained "very confident" in the A350
programme and that it expected the A350 order book to grow in 2014.
Britain's
Rolls-Royce (RR.L),
which is the sole engine maker for the A350, said the Emirates decision would
result in a 2.6 billion pound hit to its order book.
"While
disappointed with this decision, we are confident that the delivery slots which
start towards the end of this decade vacated by Emirates will be taken up by
other airlines," Rolls-Royce said in a statement.
Source: Reuters
Source: Reuters
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