TOULOUSE, France (Reuters) – Europe’s Airbus is scrapping production of the A380 superjumbo, with lackluster sales forcing it to abandon a dream of dominating the skies with a 21st century cruiseliner.
FILE PHOTO: The damaged right-hand wing-tip of the Airbus A380, the world’s largest jetliner with a wingspan of almost 80 metres, is seen on the tarmac during the Paris Air Show in Le Bourget airport, near Paris, June 20, 2011. REUTERS/Pascal Rossignol/File Photo
The world’s largest airliner, with two decks of spacious cabins and room for 544 people in standard layout, was designed to challenge Boeing’s legendary 747 but failed to take hold as airlines backed a new generation of smaller, more nimble jets.
Airbus said on Thursday the last A380 would be delivered in 2021.
The shake-up came after Emirates – the largest A380 customer – decided to reduce its orders for the iconic superjumbo and order a total of 70 of the smaller A350 and A330neo instead.
“It was a painful decision for us. We have invested a lot of effort, a lot of resources and a lot of sweat…but obviously we need to be realistic,” Airbus Chief Executive Tom Enders said.
Airbus said it would enter talks with unions in coming weeks over the 3,000-3,500 jobs potentially affected.
It took a charge of 463 million euros for shutdown costs, but is expected to be forgiven some 1 billion euros of outstanding European government loans under a funding system that stands at the center of a trade dispute with Boeing.
Airbus will produce 17 more of the planes including 14 for Emirates and 3 for Japanese airline ANA.
As part of the restructuring, Emirates placed a new order for 40 A330-900neo jets and 30 A350-900 aircraft, partially restoring a purchase of A350s which it canceled in 2014.
Responding to behind-the-scenes concerns from airline customers from Asia to Europe, Enders stressed Airbus would continue to support the A380 as long as it remains in service.
LEADING BUYER ‘DISAPPOINTED’
Emirates, which had built its global brand around the A380 and Boeing 777 and which also has 100 of the Airbus superjumbos in its fleet, said it was disappointed by the closure.
“Emirates has been a staunch supporter of the A380 since its very inception,” said Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum.
“While we are disappointed to have to give up our order, and sad that the program could not be sustained, we accept that this is the reality of the situation,” he added.
The decision came after Emirates failed to reach an engine agreement with Britain’s Rolls-Royce, which said on Thursday it noted the decision to shut down the program.
The A380 will remain a pillar of the Emirates fleet well into the 2030s, the airline said.
Emirates’ local rival Etihad of Abu Dhabi also disclosed it was cutting some Airbus and Boeing jet orders, highlighting growing questions over the growth of Gulf airlines.
Making its maiden flight in 2005, the A380 was a major step in Airbus’s efforts to compete on equal terms with Boeing and challenge what had been a cash cow for its arch-rival.
But sales of the industry’s largest four-engined jets have fallen due to improvements in lighter twin-engined alternatives, such as the Boeing 787 and 777 or Airbus’s own A350.
The prospect of a premature halt to A380 production emerged last month as part of a restructuring of orders first reported by Reuters.
On Wednesday, Reuters reported that Airbus was poised to axe the superjumbo and would likely give an update on Thursday.
The decision to scrap production is the last major step by Enders, who steps down in April.
Reporting by Tim Hepher; Editing by Sudip Kar-Gupta and Alexander Smith