By Robert Wall
Airbus Group NV said Wednesday that Emirates Airline has
canceled an order for 70 A350 long-range jets.
Emirates won't take 50 A350-900s, the model currently in flight
testing, and 20 larger A350-1000s, Airbus said in a statement.
The deal has a combined value of $21.6 billion at current list
prices. When the order was placed in 2007 it had a list price value
of $16 billion, though plane makers typically offer particularly
large discounts to launch customers.
"The contract which we signed in 2007 for 70 A350 aircraft has
lapsed. We are reviewing our fleet requirements," a spokesman for
Emirates said.
Emirates President Tim Clark had said previously the A350 would
likely be a good airplane for many airlines, though it would only
have a niche role in his fleet.
Emirates, the largest airline by international traffic, is the
biggest buyer of Boeing Co. 777s and Airbus A380 superjumbos. The
airline in November agreed to boost its A380 order commitment to
140 jets.
Airbus had booked 812 A350 orders through May, including the
deal from Emirates. Emirates was the second-largest customer for
the A350 along with Singapore Airlines. Only Qatar Airways Ltd.,
the lead customer for the plane, has bought more. Qatar, which is
buying 80 A350s, is due to receive its first this year.
Emirates planes were due for delivery from 2019, giving Airbus
time to fill the plane. Demand for the A350 has been strong so
prices the Toulouse-based plane maker can get from a new buyer may
be higher than the amount Emirates committed to pay.
The canceled order also impacts engine maker Rolls-Royce
Holdings PLC, which said Wednesday its order book would fall by
about 3.5% or GBP2.6 billion ($4.4 billion) as a result of the
Emirates news.
"While disappointed with this decision, we are confident that
the delivery slots which start towards the end of this decade
vacated by Emirates will be taken up by other airlines," the
company said in a statement.
"Demand for the Airbus A350 remains strong, with more than 700
aircraft and 1,400 Trent XWB engines already sold," it added.
Rory Jones and Rory Gallivan contributed to this article.
Write to Robert Wall at robert.wall@wj.com
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