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Airbus Has Superjumbo Problems
POSTED: 9:45 a.m. EDT, December 16,2006

The landing of an Airbus A380 in the Chinese city of Guangzhou last month on a test flight had all the trappings of gala event. But it came a full month after Airbus was originally going to deliver a fully tested and ready to fly A380 to Singapore Airlines. And the test plane's path on landing took it past a starker reminder of Airbus' troubles, the site of the future FedEx Asia air hub right there at Guangzho Baiyun International Airport.

FedEx Express dealt Airbus its strongest blow yet on the troubled A380 program, canceling its 10 firm orders and 10 options for A380 freighters in exasperation over the latest delays that have undercut the future of

the freighter program and even sent the passenger edition into stronger turbulence.

UPS, which also has a 10 plus 10 order and option package for the A380 freighter, had no immediate decision on its orders but industry sources said cancellation was a prominent possibility. "We continue to evaluate the aircraft and the options we have," said UPS Airlines spokesman Mark Giuffre.

FedEx instead placed a $3.5 billion order for 15 new 777 freighters, adding to Boeing's strong winning streak in the all-cargo business, and with problems still buffeting the A380 the future of at least the freighter version was a serious question.

"This looks like the end of the line for the A380 freighter," said George Hamlin of the Morten, Beyer & Agnew an aviation consultancy. "This is a significant customer desertion."

EADS, the parent of Airbus, said customers of the 15 remaining A380 freighters would have to "reconfirm" their orders, creating something of a straw poll of customers that could presage a shutdown. "We're still going ahead. The freighter program hasn't been cancelled," said Airbus spokesman Justin Dubon in Toulouse.

The FedEx move on the A380-800 will reverberate in the plans for the passenger editions because, industry officials say, Airbus was using the freighter as the base for its follow-on A380-900.

Airbus may be wondering if the plane gets that far. Emirates last month canceled its orders for 10 A340-600 passenger aircraft and

going with Boeing aircraft instead, a move seen across the industry as a warning that Emirates' patience on its order for 45 A380 passenger planes is limited.

FedEx's order for the 777s, meantime, gives a glimpse of FedEx's long-term plans for international express service. "Ordering the 777 freighter says that range still matters, but huge capacity may not in the express business," said Hamlin.

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