UPS says to cancel order for 10 Airbus A380s

By Scott Malone

BOSTON (Reuters) - United Parcel Service Inc. (UPS.N), which was Airbus' last remaining customer for the freighter version of the A380 superjumbo jet, said on Friday it planned to cancel its order for the delayed plane.

UPS, the world's largest package-delivery company, said it was concerned that Airbus, a unit of EADS (EAD.PA), could not fill the orders in a timely manner.

It originally expected its first plane ordered to be delivered by 2009. But the companies negotiated an extension until 2012, a deadline UPS no longer believes Airbus can meet.

Airbus said on Thursday it would rearrange its production schedule for the A380 freighter to meet UPS' schedule. But UPS said in a statement on Friday it "now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane."

David Abney, chief operating officer of Atlanta-based UPS added, "Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane. We no longer are confident that Airbus can adhere to that schedule."

The A380 superjumbo project has faced many prominent delays, with wiring problems putting it two years behind schedule.