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| Airbus to Halt Production of A380 as Orders Dry Up | |
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| TOULOUSE, France — Airbus will cease production of its mammoth A380 passenger jet, an engineering marvel that nevertheless couldn’t keep up with shifts in the way people fly, the European aircraft maker said on Thursday. | TOULOUSE, France — Airbus will cease production of its mammoth A380 passenger jet, an engineering marvel that nevertheless couldn’t keep up with shifts in the way people fly, the European aircraft maker said on Thursday. |
| Citing reduced orders from Emirates Airline, a major customer, and an inability to find other buyers, the company said it would halt deliveries of the jumbo jetliner in 2021, although it said it would continue to support existing A380s. | Citing reduced orders from Emirates Airline, a major customer, and an inability to find other buyers, the company said it would halt deliveries of the jumbo jetliner in 2021, although it said it would continue to support existing A380s. |
| “As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years,” the company’s chief executive, Tom Enders, said in a statement. “Today’s announcement is painful for us and the A380 communities worldwide.” | “As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years,” the company’s chief executive, Tom Enders, said in a statement. “Today’s announcement is painful for us and the A380 communities worldwide.” |
| The decision will lead to job cuts at Airbus, potentially affecting as many as 3,500 of its 134,000 employees over the next three years. Airbus said it would start discussions in the next few weeks about the consequences for its work force. | The decision will lead to job cuts at Airbus, potentially affecting as many as 3,500 of its 134,000 employees over the next three years. Airbus said it would start discussions in the next few weeks about the consequences for its work force. |
| The announcement overshadowed the company’s announcement on Thursday of its full-year results. Its net income rose 29 percent in 2018 to 3.1 billion euros, or about $3.5 billion. | The announcement overshadowed the company’s announcement on Thursday of its full-year results. Its net income rose 29 percent in 2018 to 3.1 billion euros, or about $3.5 billion. |
| Airbus spent $25 billion developing the double-decker, four-engine aircraft, which can carry more than 500 passengers while offering amenities like showers and a bar. It was built for a time when crowded airports would demand that planes carry more people to reduce congestion. | Airbus spent $25 billion developing the double-decker, four-engine aircraft, which can carry more than 500 passengers while offering amenities like showers and a bar. It was built for a time when crowded airports would demand that planes carry more people to reduce congestion. |
| But flight traffic instead shifted to smaller planes, which are cheaper to maintain, flying to regional airports, a move that reduced demand for larger aircraft. | But flight traffic instead shifted to smaller planes, which are cheaper to maintain, flying to regional airports, a move that reduced demand for larger aircraft. |
| Emirates, the Dubai-based airline, was Airbus’s main customer for the jumbo jet, with a fleet of more than 100, but the airline has scaled back its plans and will take delivery of just 14 more over the next two years. | Emirates, the Dubai-based airline, was Airbus’s main customer for the jumbo jet, with a fleet of more than 100, but the airline has scaled back its plans and will take delivery of just 14 more over the next two years. |
| The fate of the superjumbo has been in question for at least a year, and Mr. Enders acknowledged in January 2018 that the company would not be able to continue production of the plane without an order from Emirates. | The fate of the superjumbo has been in question for at least a year, and Mr. Enders acknowledged in January 2018 that the company would not be able to continue production of the plane without an order from Emirates. |
| Airbus was thrown a lifeline with a $16 billion order from Emirates a few days later, but Airbus confirmed last month that it was in discussions about whether that deal would ever be realized. The A380 took another hit last week as Qantas canceled its order from 2006 for eight of the planes. | Airbus was thrown a lifeline with a $16 billion order from Emirates a few days later, but Airbus confirmed last month that it was in discussions about whether that deal would ever be realized. The A380 took another hit last week as Qantas canceled its order from 2006 for eight of the planes. |
| Emirates is not abandoning Airbus, however. The plane manufacturer said on Thursday that the airline would emphasize two smaller models instead, the A330-900 and the A350-900. | Emirates is not abandoning Airbus, however. The plane manufacturer said on Thursday that the airline would emphasize two smaller models instead, the A330-900 and the A350-900. |
| Airbus was at pains to emphasize that A380s will not disappear anytime soon. “Keep in mind that A380s will still roam the skies for many years to come, and Airbus will of course continue to fully support the A380 operators,” Mr. Enders said. | Airbus was at pains to emphasize that A380s will not disappear anytime soon. “Keep in mind that A380s will still roam the skies for many years to come, and Airbus will of course continue to fully support the A380 operators,” Mr. Enders said. |
| The company said the decision to wind down production of the A380 was reflected in the 2018 financial figures released on Thursday, with the company taking a €463 million hit because of the decision by Emirates to reduce its order by 39 aircraft. | The company said the decision to wind down production of the A380 was reflected in the 2018 financial figures released on Thursday, with the company taking a €463 million hit because of the decision by Emirates to reduce its order by 39 aircraft. |
| Airbus also said that preparations were underway in case Britain leaves the European Union without a formal agreement on departure terms, a situation known as a “no-deal Brexit.” The company has asked suppliers to make arrangements that would give Airbus some room to maneuver in the event of supply-chain disruptions. | Airbus also said that preparations were underway in case Britain leaves the European Union without a formal agreement on departure terms, a situation known as a “no-deal Brexit.” The company has asked suppliers to make arrangements that would give Airbus some room to maneuver in the event of supply-chain disruptions. |
| Airbus has been particularly outspoken about the dangers of Brexit and the threat it poses for business. Mr. Enders said last month that the British government had not given businesses enough information to help prepare for Brexit, calling its handling of the negotiations a “disgrace.” | Airbus has been particularly outspoken about the dangers of Brexit and the threat it poses for business. Mr. Enders said last month that the British government had not given businesses enough information to help prepare for Brexit, calling its handling of the negotiations a “disgrace.” |
| “Make no mistake: There are plenty of countries out there who would love to build the wings for Airbus aircraft,” Mr. Enders warned. | “Make no mistake: There are plenty of countries out there who would love to build the wings for Airbus aircraft,” Mr. Enders warned. |
| He struck a more positive note on Thursday in an earnings call. “I’m still optimistic that a solution can be found that avoids a no-deal Brexit,” Mr. Enders said, “that the forces of reason will prevail in London, but also in Brussels and on the Continent.” | He struck a more positive note on Thursday in an earnings call. “I’m still optimistic that a solution can be found that avoids a no-deal Brexit,” Mr. Enders said, “that the forces of reason will prevail in London, but also in Brussels and on the Continent.” |