Emirates cancels 70-plane A350 order worth $16bn

 12 Jun 2014 - 4:49


TOULOUSE: Airbus suffered what could be the jet industry’s worst cancellation and a setback to its newest aircraft yesterday when Dubai’s Emirates scrapped a $16bn order for the A350.
The surprise decision by Airbus’s largest customer comes months before the long-haul jet is due to enter service and removes 9 percent of the order backlog for the jet, which took eight years and $15bn to develop.
The first A350 is due to be delivered to Qatar Airways in the fourth quarter of this year.
Airbus said it was not worried about replacing the lost orders, with its top salesman saying some airlines had immediately expressed interest in buying some of the Emirates aircraft, the first of which was due to be delivered in 2019.
But analysts said the move raised questions over new aircraft demand, whether for the A350 itself or a more general wobble of confidence in a previously solid market that could also hit Airbus’s main rival, Boeing.
The A350 is Europe’s first jetliner built mainly from advanced new materials and was designed to compete with two types of aircraft from Boeing - the lightweight mid-sized 787 Dreamliner and the larger but older 777 mini-jumbo.
Emirates was among the first buyers for the A350 when it placed the order for 50 A350-900s and 20 A350-1000s in 2007. The deal was worth around $16bn according to 2007 list prices, and would be worth close to $22bn if placed now, although launch customers typically negotiate large discounts.
Both Airbus and Emirates said the decision to cancel resulted from a review of Emirates’ fleet requirements, but the airline did not give specific reasons. Emirates is expected to phase out other Airbus jets. Reuters