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Airbus cuts superjumbo output  May 06, 2009

Airbus said Wednesday that it cut its planned production of A380 superjumbo jetliners this year to 14 planes from 18, blaming the global economic crisis and its impact on airlines.

"Customers approached us and we are adapting our schedule to their needs," said Airbus spokesman Stefan Schaffrath. As recently as mid-March, Airbus had said it expected to deliver 18 A380s this year. The cut is linked to previously announced delivery deferrals at Australia's Qantas Airways Ltd. and Dubai's Emirates Airline, people familiar with the plan said.

Airbus, a unit of European Aeronautic Defence and Space Co. (EADSY), said in a statement that the reduction will have "no significant impact on Ebit," or earnings before interest and taxes this year. Airbus said it "will take mitigating actions against the negative effects" of the shift on free cash flow.

Airbus said it plans to deliver "more than 20" superjumbos next year. It had not recently given a delivery target for A380s next year. The A380, the world's largest passenger plane, carries a catalog price of $327 million, but early customers received significant discounts, airline officials have said.

The superjumbo has been plagued by troubles since its first flight in 2005, when Airbus announced that initial deliveries would be six months late. Airbus later announced more delays due to production problems that pushed the plane more than two years behind schedule and several billion dollars over its original $12 billion budget. Schaffrath at Airbus said the new reduction was due solely to customer demand, not manufacturing issues.

The shift comes amid a string of production cuts on smaller models at Airbus, U.S. rival Boeing Co. and Brazil's Empresa Brasileira de Aeronautica S/A, or Embraer, as airlines worldwide struggle with plunging passenger demand.

Airbus in October said it would shelve plans for a production increase this year. In February it announced plans to cut deliveries of its popular single-aisle models to 34 planes per month from 36 and consider further cuts.

Boeing in April said it would cut production of its large 777 model to five planes per month starting in mid-2010 from seven planes per month now. Embraer early this year also announced production cuts. Airbus in its statement reiterated plans to deliver roughly as many planes overall this year as it did last year, when it produced 483 jetliners, a record level.

The superjumbo cuts come as Airbus was just beginning to accelerate deliveries to Emirates Airline, Qantas Airways Ltd. and Singapore Airlines Ltd. (SINGY), which already fly the plane, and prepare for the first deliveries to Air France-KLM SA (AFLYY) later this year and Germany's Deutsche Lufthansa AG (DLAKY) early next year.

Qantas, which already has three superjumbos in its fleet, said last month that it will take its next three A380s this year but defer the following four. One of those four was planned to be delivered this year and the rest in 2010.

Emirates President Tim Clark said in March that the airline expects to get seven A380s in its current fiscal year, but one of those deliveries had shifted from December to next January.

Airbus cuts superjumbo output
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