Emirates cancels a total of 70 A350's, 50 Airbus A350-900, and 20 A350-1000, knocking the Airbus order book for the A350 further back of Boeing's 787 Program. Airbus book drops down to 742 A350 orders after subtracting 70 from the books. Tim Clark announces the change as a fleet adjustment. Currently Emirates has the 787 family of Aircraft and Boeing's 777-9X on the books. Clark has not been favorable towards the A350-1000. This is a significant blow for Airbus to absorb, as Emirates has been a key customer for the Airbus A380 with Emirates. In the next five months Airbus hopes to deliver its first customer an A350-900. More information emerging on the cancelation tomorrow.
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John Leahy Gives "The Baghad Bob Report: Gulf News Reference Link
Dubai: Emirates said on Wednesday it has cancelled its entire order for Airbus A350 XWBs (extra wide bodies) that it signed with the European plane maker back in 2007, then valued at around $16 billion (Dh58.48 billion) in list prices.
Without divulging exact reasons for the move, an Emirates spokesperson said in a statement that the contract which the airline signed in 2007 for 70 A350 aircraft has “lapsed”. “We are reviewing our fleet requirements,” the spokesperson added.
Confirming the same, Airbus, which suffered its biggest-ever order cancellation, said in a statement that Emirates’ decision “follows ongoing discussions with the airline in light of their fleet requirement review, as demonstrated by their order of 50 additional A380s at the last Dubai Airshow and their continuous interest in the programme”.
The order of 50 A350-900s and 20 A350-1000s was originally placed by Emirates in 2007 with first delivery slots scheduled from 2019.
A disappointed Airbus sales chief, John Leahy, reportedly told reporters in Toulouse, France, that it’s “not good news commercially but not bad news financially”, adding Boeing has had more cancellations for its 787 Dreamliner.
Airbus stated that it was confident of filling the spare production slots and saw no financial impact from the order cancellation. It added that half-a-year before entry into service, the A350 XWB order book stands at 742 firm orders.
The first A350 is scheduled for delivery to Qatar Airways in the fourth quarter of this year.
Analysts, meanwhile, see Emirates’ move as one prompted by Boeing’s 777x planes.
Terming Emirates’ decision as “strange”, Addison Schonland, Partner at US-based AirInsight, told Gulf News in a statement that a reduction in the order would seem plausible in light of the [Boeing] 777x. “But a total cancellation seems like an overkill.” Bear in mind the A350 programme is on time with an excellently executed flight test programme, he said. “What could possibly be ‘wrong’ with the A350 now? Can the 777x — which is ‘not’ even in flight test — offer so much more?”
Emirates in November last year placed a $76 billion order with Boeing for 150 of its new 777X planes at the Dubai Airshow.
Another analyst, Andrew Charlton of Geneva-based Aviation Advocacy, is of the view that by moving away from its A350 order Emirates is saying that there is no great need for them, “or perhaps that the need for A380s is greater”.
He added that the cancellation has two implications, the first being Emirates’ long-haul hub model can be sustained and maintained by its fleet of Boeing 777s. “And secondly, the A380s are the way of the future,” Charlton pointed out.
The cancellation comes shortly after Emirates President, Tim Clark, recently said that if Airbus could deliver by 2019-2020 he would be interested in up to a 100 new A380neos (new engine options) over the 10 years to meet fleet replacement and expansion needs.
Rolls-Royce, the sole engine maker for the A350, will also suffer a blow owing to Emirates’ move as it would reportedly end up losing $4.4 billion.
Airbus’ shares were reportedly down 3.3 per cent to 52.08 euros in afternoon trading in Paris.
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