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Airbus' last A380 cargo order canceled

An airport worker helps to unload a United Parcel Service (UPS) cargo plane at the company's air hub for Latin America in Miami, Florida on Oct. 20 last year. UPS announced on Friday that it would cancel an order for 10 Airbus A380 superjumbo freighters, citing delays by the troubled European manufacturer. PHOTO: AFP

United Parcel Service Inc (UPS), the last remaining customer for the cargo version of the Airbus A380 superjumbo jet, said on Friday that it was walking away from its order for 10 planes, citing concerns that Airbus would not be able to meet a revised delivery schedule.

The cancellation by UPS, four months after its main competitor, FedEx Corp, also abandoned an order for 10 planes, leaves Airbus without a customer for the A380 freighter. It is another blow to the company, which announced this week the details of a cost-cutting plan that is expected to result in the loss of 10,000 jobs across Europe over the next four years.

"This is another slap in the face for Airbus," said Doug McVitie, a consultant at Arran Aerospace in Dinan, France. "UPS will probably turn to Boeing now for good."

The move follows a confirmation by Airbus late on Monday that it had halted work on the A380 freighter to concentrate on the passenger version of the plane, now two years behind schedule.

"This is a decision; it's final," said Mark Giuffre, a spokesman for UPS in Louisville, Kentucky.

UPS said its decision would be formally presented to Airbus at the first opportunity allowed under the terms of an agreement reached last week that gave either party the right to cancel the order. The date has not been disclosed, but John Leahy, the Airbus chief operating officer for customers, said last week that the date fell in the second half of this year.

The announcement appeared to catch Airbus by surprise. In an e-mail exchange hours before the announcement, Leahy indicated that he had not been expecting a decision by UPS for some time.

"The order remains on our books until UPS makes a final decision," Leahy wrote.

UPS, the largest package delivery company in the world, had originally expected its order -- valued at US$2.8 billion -- to be delivered beginning in 2010. The company disclosed on Friday that the latest agreement with Airbus had delayed those deliveries by two years.

"Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said David Abney, chief operating officer of UPS and president of UPS Airline.

But after Airbus decided to divert workers to the passenger version, "we no longer are confident that Airbus can adhere to that schedule," he said.
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