UPS cancels A380 order?
 

Friday, 1620 UTC
The France 24 TV channel is claiming, by way of that banner thing that goes at the bottom of the screen, that UPS has cancelled it's A380 order - can't find any more info elsewhere (web, BBC etc) and France 24 have yet to actually carry a story on the issue - anybody else know anything?

C'est vrai.......

See http://www.earthtimes.org/articles/show/35984.html

More likely Airbus' idea, judging by the agreement earlier this week that "either party" could cancel. UPS now just saving face - "you're fired, no I'm not I quit".

Might play in Airbus' favour.

The A380F was hogging resources for a small order, now they can put people onto the A380-800 and even start developing the stretch version as it shares some common parts with the freighter.

So far it's just speculation and conversation though. The A380-900 would be a better use of the people on the program at the moment as there could be a lot more business in the bigger airframe.

WSJ version
 

The Wall Street Journal website has posted story bylined by Mike Barris. It quotes the UPS president as saying that while they had recently thought Airbus would adhere to a 2012 delivery date, they no longer felt confident in that (greatly delayed) date. He goes on to cite the diversion of employees from work on the freighter version to the passenger version--implying that said diversion preceded the final UPS termination decision.

Personal comment (mine, not the article's): it seems that at this stage of play neither party was very eager for this order to stay on the books. A costly diversion from the main game for Airbus, and a lonely and uncertain bet for UPS.

UPS cancels A380
 

It just seems a bit strange when they loose orders left and right that they lay off 10000 workers and start selling plants. Surely that won’t help the production line to catch up and solve the problems at hand, or will it?



UPS press release;
ATLANTA, March 2, 2007 - UPS (NYSE:UPS) today announced its intent to cancel later this year an order for 10 Airbus A380 freighters.

The final cancellation decision will be formally presented to Airbus on the first date specified under an agreement reached last week that gives either party the right to terminate the order.

Last week's agreement specified a revised delivery schedule that delayed UPS's first A380 jumbo freighter from 2010 to 2012. UPS originally expected its first freighter in 2009.

UPS had intended to complete an internal study of whether it could wait until 2012 for the aircraft, but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane.

"Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said David Abney, UPS's chief operating officer and president of UPS Airlines. "We no longer are confident that Airbus can adhere to that schedule. UPS has built one of the largest airlines in the world in order to ensure reliable service to our customers, and we're confident we have the resources to continue doing so in the future."

Losing orders left and right?

They have just lost the freighter deals. VS pushed back some dates on their A340, by a couple of years for a few outstanding orders. That's about it.

The Airbus order book is healthy enough at the moment, as is their sales sheet for 2007. Their biggest problem is the lousy euro to dollar rate. I've never understood why they continue to sell in dollars when the euro is now a globally accepted currency, but then again I'm no economist.

Nah not quite, there A330F had a healthy book of orders on announcement and for the several weeks following, if anything this cancellation is more of benifit rather than a loss to Airbus. They can now put all the units of resources into developing the passenger version, without being side-tracked by the A380F. lets hope it works out:ok:

Guys this does not make sense. If things are so good for Airbus why are they laying off 10,000 workers and selling off facilities on the one hand while fending off big union problems with the other?
It seems there is some serious consolidation going on.
Regards,
White Bear.

Let's look at this from a manufacturing and marketing perspective, shall we?

First, there are more pax versions of the A380 ordered than freighter, therefore with one's back to the wall, whom does one appease? Where does one put its resources? Do the math... especially after the heavy indebtedness Airbus has to their long suffering A380 clients as a whole. Believe me, UPS probably had a reorder price stipulation in place when they walked away from the table - and they still want the plane.

Second, the reported lay-offs are not due to the A380's woes only - it's in line with Airbus' restructuring process which has almost come to be. The basis of that is to, 1) redefine who (Fr v. De v. UK v. Es) does what (A320 v.A330/340 v. A380) as far as manufacturing, in order to save time and money, and 2) in an effort to bring similar disciplines under one roof, consolidation of work processes must take place, therefore some streamlining of production lines must be done. Remember, they've still got to develop the A350 XWB, hence resource management is critical to their bottom line. Their order book is still strong, their production will pick up in the near future, i.e., not "down and out". Just down... but not for the count.

Think back - in the 1990's, the UK's Airbus wing factories went on stike and crippled many Airbus production lines, but they got through it. Boeing had wiring problems with their new 747 model, but they got through it. The capability to pull together and rebound is what the industry watches, and usually that is delivered. Wait and see...

Oh, and speaking of selling assets, what about Boeing and Wichita? Still going, as the battery bunny says.

Cheers, y'all.