Published: Tue, January 16, 2018
Finance | By Cynthia Curry

Airbus says to scrap A380 programme if no new orders

Airbus says to scrap A380 programme if no new orders

Airbus AIR.PA is three years away from recovering leadership of the commercial aircraft market by outproducing us rival Boeing BA.N , its top planemaker predicted on Monday.

"If we can not work out a deal with Emirates, I think there is no choice but to shut down the program", John Leahy, the company's chief operating officer, told reporters on Monday.

"But", he added, "I'm hopeful that we'll work out a deal".

The European planemaker said on Monday net orders after cancellations rose 52 percent to 1,109 aircraft in 2017, placing it ahead of Boeing's 912 net orders.

Emirates declined to issue an immediate comment.

Workers arrive at the Airbus factory in Hamburg, Germany, where the A320 series of passenger planes are assembled.

In many ways, the A380 program is a race against time: Airbus is hoping China will lead a revival in orders once demand for long-haul planes picks up.

Airbus shares were trading lower, Monday, despite the news that the plane maker had delivered the most planes on record and also pulled in more new orders than its rival Boeing. At the end of 2017 Airbus' overall backlog stood at 7,265 aircraft valued at slightly more than $1 trillion at list prices.

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"Every 15 years, air traffic doubles", he said.

"The market is just stronger everywhere", Airbus sales chief John Leahy told reporters.

Airbus, as a result, is still betting that airlines flying between large, highly congested hubs in London or New Delhi will have no choice but to buy larger planes if they want to continue to grow.

"But there are other potential customers beyond Emirates".

Leahy said he is convinced that larger aircraft still have a future, because airlines will need bigger planes as demand for air travel grows.

So far, the A380 has cost Airbus €18 billion to €20 billion, and the company says it needs to build at least six a year for the program to remain viable.

'We are still talking to Emirates, but honestly they are probably the only one to have the ability right now on the market place to take a minimum of six per year on a period of 8 to 10 years, ' Leahy said.

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