Home / Fedex scraps entire A380 planes order

Fedex scraps entire A380 planes order

Troubled plane maker Airbus hit rock bottom again this week when US-based Fedex Express, part of Fedex, cancelled its order for 10 superjumbo A380-800F aircraft and announced to buy 15 Boeing 777 freighter aircraft instead.

Troubled plane maker Airbus hit rock bottom again this week when US-based Fedex Express, part of Fedex, cancelled its order for 10 superjumbo A380-800F aircraft and announced to buy 15 Boeing 777 freighter aircraft instead.

It cited continued delays for the cancellation.

According to latest Airbus’ announcement the first plane will be delivered in October 2007, instead of December this year as promised earlier. Also, the number of planes to be delivered next year shrank to just one from originally nine.

Although Airbus repeatedly declared that “everybody is still on board”, Fedex is now the first customer to officially cancel its order - and might be followed by various other carries that are facing massive financial losses due to the already more- than a year-delayed US$15bn project.

Emirates Airlines, who placed the largest order of 43 aircraft, Virgin Atlantic, Singapore Airlines and Qantas have all expressed their distress of the delays but so far no other carrier has cancelled its order, or sued Airbus for compensation.

“Our position on Airbus remains unchanged. We will keep our full order intact, and keep Airbus our business partner of choice,” Valerie Tan, Emirates Cooperate Communication, told Arabian Business.

Tim Clark, President of Emirates, said in the sideline of the World Travel Market in London last week “Compensation is not our target. What we really seek is to give a chance to Airbus to deliver what they promised so that we can assess, because we need that aircraft.”

“What induces us to wait for the A380 is that we want it to be a top-rated aircraft, and two years are not a long time in this industry,” he added.

But despite the fact that most carriers have not yet cancel their orders, shares of parent group EADS keep falling, and further delays could mean large payouts for Airbus, besides the fact that they provide further openings for US rival Boeing.

EADS, which owns a majority stake of 80% of Airbus, said recently that they are facing an extra US$3.6bn loss from its profits over the next four years due to the delays, in addition to the US$2.5bn they stated in June.

The high-tech aircraft is struggling with 500km of wiring, which the Airbus’ engineers have not yet managed to install.

The issue first came up in June last year when Airbus firstly said that deliveries would be delayed for six month. A further delay of six to 10 months followed in June 2006.

These technical delays were then accompanied by a cooperate sandal when the management was accused of withholding the news of the delays for months before confronting shareholders which consequently led to the resignation of then Airbus CEO Gustav Humbert and the A380 programme manager Charles Campion, as well as the EADS co-CEO Noel Forgeard.

Humbert’s successor, Christian Streiff, resigned after just several weeks and was replace by co-CEO Louis Gallois.

Another three months down the line, Airbus announced a further delay up to one year, which followed a review on the entire A380 production process.

The first superjumbo is now scheduled to be delivered to Singapore Airlines in October 2007 - a total of 20 months later that originally planned - and even this date remains in question. Airbus promises to deliver another 13 A380 aircraft in 2008, and 25 in the following year. So far, it has sold 159 jets to 16 different carriers and some of them have already started to claim penalties for delivery delays.

As of now, the German national carrier Lufthansa holds the second largest order of A380s after Emirates with 15 planes. Qantas placed an order of 12 crafts, and Air France, Singapore Airlines, International Lease Finance and UPS have ordered 10 planes.

Experts argue that the main reason why airlines are not cancelling their orders is that the travel industry is expected to grow massively in coming years and the superjumbo will be needed.

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