Another Airbus Contract Cancelled (EADSY, BA)

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The problem of small cracks in the wings of the Airbus A380 have been well-publicized and led to the company being named to our list of the nine most damaged brands in the US. Now the problems seem to be seeping out and affecting more models.

Airbus and its parent European Aeronautic Defense and Space Co. NV (OTC: EADSY.PK) reported today that the aircraft maker booked just 11 new orders in April — and those orders were taken for the A350, a plane comparable to the 777 from Boeing Co. (NYSE: BA). The A380 is Airbus’s late competitor to the Boeing 747.

The latest contract cancellation for seven A350s came from Abu Dhabi’s state-owned airlines Etihad. Full deliveries of the aircraft were to begin in 2014, but the schedule has been delayed and Etihad was not scheduled to receive the planes until 2017. No reason was given for the cancellation, but the recent problems with the A380 cannot have fostered confidence in the company.

Orders for new planes at both Airbus and Boeing are soft so far this year. Airbus claims net new orders for the first four months of 2012 of 112 planes. Boeing claims net new orders of 415 planes so far in 2012. All but two of Boeing’s new orders are for the venerable 737. Boeing’s new plane, the 787 Dreamliner, has a negative net total new orders so far this year.

Paul Ausick

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