(Adds detail on A350 order cancellation, demonstration flight)
By Alwyn Scott and Tim Hepher
NEW YORK/TOULOUSE, June 12 Europe's Airbus
mounted a transatlantic charm offensive on Thursday to
boost sales of the world's biggest jetliner, the A380, and shine
the spotlight on its brand-new A350 - a day after its shares
were hit by a record order cancellation.
Airbus teamed up with the same airline that canceled 70
A350s on Wednesday, Dubai's Emirates, and leasing company Amedeo
to sell potential buyers on the merits of the A380
Emirates is by far the biggest customer of the A380 but is
disappointed that more airlines do not share its vision for the
double-decker and shares an interest with Airbus and leasing
partner Amedeo in developing a market for the $400 million jet.
But the pitch was not made directly to airlines. Instead,
the companies went to New York to convince financiers and Wall
Street analysts that the massive aircraft will not threaten
industry profit margins and in fact would make economic sense.
If U.S. airlines don't use the A380, "they are leaving
profits on the table for others to take," said Mark Lapidus,
chief executive of Amedeo, speaking on the sidelines of a
briefing at New York's John F. Kennedy International Airport.
"We are a little concerned with how the Street will react to
enlarging capacity," he said, noting that the executives of
Airbus, Emirates and Amedeo are here to "broaden their
knowledge" of how the airplane can make money.
By flying 500, 600 or more passengers into airports such as
London Heathrow or Hong Kong, airlines can accommodate growing
demand for air travel without adding additional flights.
"We're able to use it to grow revenue in a way that we
wouldn't be able to do with any other aircraft type," said Nigel
Hopkins, an Emirates executive vice president.
The major U.S. carriers, American Airlines Group,
United Continental Holdings and Delta Air Lines,
do not currently use the A380 but are facing growing competition
in the United States from Emirates and other carriers that do.
With many airports "slot constrained" - at or near the limit
of number of takeoffs and landings they can handle - airlines
face limited scope for revenue growth. But U.S. planemaker
Boeing says there is a more promising market for smaller
airplanes that open up new secondary routes, bypassing hubs.
The briefing came a day after Emirates canceled 70 orders
for Airbus' brand-new A350 aircraft, which is smaller than the
A380 but has newer technology.
It also comes as Amedeo seeks lease customers for 20 Airbus
A380s it agreed to buy in February.
As part of the New York briefing, Airbus, Emirates and
Amedeo were due to take some 150 analysts and journalists on a
special A380 demonstration flight over Manhattan, showing off
the A380's quiet cabin and ability to climb quickly to altitude.
Separately, Airbus took another 150 journalists on a special
flight onboard an A350 in Toulouse, France, earlier on Thursday,
a day after Emirates said it was canceling its entire order for
the airplane, worth $16 billion at list prices.
Airbus officials said the A350 flight, coinciding with an
annual media seminar, was first mooted before the Emirates move.
Lightly loaded and carrying no bags, the A350 climbed
steeply but quietly on take-off and took journalists 31,000 feet
above the Pyrenees for just over an hour.
To the surprise of the A350's first passengers, the flight
was accompanied at one point by a French Rafale fighter
practicing intercept manoeuvres with the agreement of Airbus
test crew. It is a common if little publicized piece of
co-operation involving Airbus test flights carried out in French
military airspace. Because passengers were on board, the French
fighter was ordered to stay well away from the carbon-fiber jet.
"This is a very quiet flight. In some parts of the airplane,
up in first and business, you hear wind noise more than the
engines, so I was very impressed by that," said Scott Hamilton
of Leeham News, an aerospace analyst from the Seattle area.
Analysts said Airbus would be able to sell the A350s at
higher prices than launch prices offered to Emirates in 2007.
"It was more bad headlines than substance. Deliveries are in
2019, five years away, and that gives Airbus plenty of time to
resell those slots," Hamilton said.
Still, JP Morgan said in a note that while the cancellation
would not seriously dent Airbus's overall order book, it raised
questions over the European planemaker's product strategy as a
revamped version of Boeing's 777 will fly more people further.
(Reporting by Alwyn Scott and Tim Hepher; Editing by Steve
Orlofsky, Geert de Clercq)