Airbus forced to cut order estimate for A380 Superjumbo in 2008

The phenomenal rise in the prices of fuel is sweeping each and every sector of the aviation, the aircraft-making companies included. Airlines are reining in spending as they face losses that may total $40 billion in 2008.

Orders for the Airbus A380 Superjumbo jet may be one-third lower than predicted earlier in 2008, as higher fuel costs and an economic slowdown have hit demand for travel.

“Airbus expects high fuel prices to prompt airlines to cancel and defer jetliner orders, but it is sticking with plans to increase production,” John Leahy, the company’s chief operating officer and head of sales, was quoted by the media as saying at the Berlin Air Show being held from May 21 to June 1, 2008.

Airbus SAS, the aircraft-manufacturing subsidiary of the European aerospace consortium European Aeronautic Defence and Space Company (EADS), is the world’s largest maker of planes. Based in Toulouse, France, and with significant activity across Europe, Airbus produces nealry half of the world’s jet airliners.

Airbus may receive about 20 orders for the 525-seat A380 Superjumbo in 2008. As recently as February 20, 2008, Airbus had forecast 30 orders. However, production schedules are not expected to be affected, John Leahy said.

The company had predicted just 700 orders in 2008 – the lowest in four years.

However, added Leahy, the company hopes that the A380 Superjumbo should do well in a recession because of the double-decker’s economies of scale. Gulf Air, the national carrier of Bahrain, has ordered 15 single-aisle A320-series planes and 20 A330-300 widebodied jets. The aircraft, Leahy said, would be delivered over 5 years starting in 2011.

Meanwhile, Boeing Company has said that its 787 Dreamliner passenger jet is more efficient and has sold 896, compared with 192 orders for the Airbus A380 Superjumbo.

Boeing has, say reports, concentrated its resources on the 787 Dreamliner, a long- range, medium-sized plane that is priced at about $150 million and saves fuel by using lighter composite materials. The model is designed for direct flights between secondary cities.

Boeing, with its international headquarters is in Chicago, Illinois, the United States, is the largest global aircraft manufacturer by revenue, orders and deliveries, and the second-largest aerospace and defence contractor in the world. Boeing is also the largest exporter of planes in the United States.

The website bloomberg.com has reported that the Airbus has so far delivered four A380s – which have a list price of about $327 million – all of them to Singapore Airlines Limited.

The bulk of the company’s sales come from single-aisle planes in the A320 series. And, John Leahy had told reporters at the Berlin Air Show that the cancelling and deferring of orders by airlines would most likely affect the strong-selling single-aisle models of the A320 series.

European Aeronautic Defence and Space Company (EADS) said in a statement that there occurred an operating loss “for the first time in its 8-year history, in 2007, amid delays and cost overruns on the A380 and Airbus’s A400M military-transport programme.”

On May 13, 2008, Airbus had announced that the A380 Superjumbo, already two years late, was facing another three months of production delays.

The stocks of EADS fell by 32% in 2008 – reducing the company’s market value to 12.1 billion euros ($19 billion).

Airbus is leading Boeing in plane contracts in 2008. The Airbus had 397 orders at the end of April 2008. Boeing had 378 orders as of May 20, 2008, according to Boeing’s website.