Blow for Airbus as parcels carrier cancels A380 orders.

Byline: BY DAVID JONES Daily Post Business Staff

AMERICAN parcels carrier FedEx has become the first customer for Airbus's A380 superjumbo to cancel its order for the jet because of repeated delivery delays.

It's a major blow for troubled Airbus which has been grappling with superjumbo production problems caused by difficulties with wiring for in-flight systems.

But another important customer, Singapore Airlines, says it is sticking with its orders for the jet, the wings of which are built at Broughton, near Chester.

Thousands of jobs at the wing-making plant depend on the success of the flagship aircraft which is currently undergoing successful trial flights.

FedEx, the world's largest air cargo company, said it was cancelling its order for 10

Mystery bid for Scottish Power freighter versions of the A380, worth in total more than pounds 1bn, and will buy aircraft from Airbus's rival Boeing instead.

It is the first order cancellation, and comes after Airbus pushed back its A380 delivery schedule for the third time last month and told customers they would have to wait up to two years.

Employees at Broughton are keeping their fingers crossed that FedEx's rival carrier UPS does not follow suit and cancel its order for 10 of the aircraft.

Work on the A380 wing production line has been suspended while the backlog of jets on the final assembly line in France is cleared.

Broughton workers have been switched to work on other aircraft models, and so far the plant has avoided any lay-off of permanent employees.

Airbus needs to sell 420 of the giant jets - in 555-seat passenger or freighter versions - before it starts to make a profit on the project. The cancellation means it now has firm orders for just 149.

FedEx chief executive Frederick Smith said the A380 was a "terrific aeroplane" but the growing global demand for air cargo meant the company could not afford to wait any longer for the A380 to arrive, and was buying 15 Boeing 777 freighter aircraft instead, with options on an additional 15.

But FedEx is not walking away from Airbus altogether. It said it continues to be Airbus's largest wide-body airplane customer and will add additional new and used Airbus wide-body aircraft to its fleet in coming years.

Singapore Airlines, too, is taking Boeing aircraft to bridge the gap in capacity caused by late delivery of its 10 superjumbos.

Airbus parent group EADS has again delayed a decision on whether to build a new, mid-sized A350 XWB.

It must develop the jet - at a cost of more than pounds 6bn - or lose the mid-sized airliner market to Boeing which has won orders for about 450 of its 787 Dreamliner aircraft.

EADS is posting its first quarterly loss - pounds 130m - in three years because of the A380 delays, compared with net income of about pounds 150m a year earlier.

FedEx is first airline to cancel order 

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