Airbus hit by jet cancellations as A380 shutdown looms

PARIS (Reuters) - Airbus on Thursday reported the cancellation of orders worth $4 billion, dominated by 8 A380 aircraft, highlighting an increasingly bleak picture for the world’s largest airliner as preparations to close production gather pace amid weak demand.

FILE PHOTO: The logo of Airbus is seen after a flight event presentation in Colomiers near Toulouse, France, November 6, 2018. REUTERS/Regis Duvignau/File Photo

Confirming its earlier signals, Australia’s Qantas said it would not take any more of the giant planes and would stick at a fleet of 12 instead of 20 originally ordered.

The cancellation comes after the A380’s largest customer, Emirates, began discussions with Airbus over switching some A380 orders to smaller models after it failed to secure an engine contract for its latest batch of orders, Reuters reported last week.

Barring a surprise agreement to prop up the A380, Airbus is preparing to close production of the double-decker earlier than planned and could make a detailed announcement as early as its annual results on Feb 14, people familiar with the matter said.

“It is the end of the A380,” an industry source said.

Airbus declined comment.

The spacious 544-seat, four-engined A380 is widely seen as a success with passengers but has come under pressure due to advances in the efficiency of the largest twin-engined jets.

At the opposite end of its portfolio, Airbus also reported the cancellation of orders for five of its smallest model, the 110-seat A220-100, a monthly order tally showed. Airbus recently acquired the A220 program from Canada’s Bombardier.

The five planes had previously been assigned to unnamed government or private buyers.

The combined cancellations meant that Airbus began the year with a negative net total of 13 orders after unusually failing to win any new business during January.

It delivered 39 jets in the same month.

Airbus, whose management has stressed the need to overcome recent glitches in the supply chain and focus on delivering jets against a record backlog of orders, played down the lack of any new orders in the first month of the year.

“One month does not make a year,” a spokesman said.

The company is expected to give 2019 forecasts on Feb 14.

U.S. rival Boeing won the order race against Airbus last year. It has yet to publish data for January this year.

Reporting by Tim Hepher; Editing by Alexandra Hudson