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UPS follows FedEx in canceling A380 freighter orders

In November of last year, DailyTech reported that FedEx cancelled its order for 10 A380-800F freighters and instead went with 15 Boeing 777s. The cancellation notice left UPS as the sole customer for Airbus' A380-800F.

Today, we learn that UPS has also decided to back out and abandon the A380-800F. "Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said UPS president David Abney. "We no longer are confident that Airbus can adhere to that schedule."

UPS had 10 planes on order with the option to purchase 10 additional planes from Airbus, but it looks as though Boeing's 747 may be the next best alternative for the shipping company. "It almost spells the demise for that cargo business, because the alternative to the 380 is the (Boeing) 747," said Chris Lozier, an analyst for Morningstar. "You would expect UPS to be at the negotiating table with Boeing right now, if not weeks ago, working out details for the 747."

The news comes just a week after Airbus announced that it was cutting 10,000 jobs. In addition, French unions plan to strike next week in response to the job cuts and German Airbus workers may also join in.

Airbus' A380 program has been plagued with number setbacks, most notably due to problems wiring the large aircraft.

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RE: Subsidies
By timmiser on 3/2/2007 9:09:39 PM , Rating: 2
That remote little town is called Toulouse, France. That is the headquarters of Airbus and the root of the A380 logistics problem. Toulouse is a city that is landlocked, ie-no ocean port or river/barge access. This wasn't such a big problem when they were making 'normal' sized planes but when they took on the A380 project and decided to keep the final assembly in this town, that was just plain stupid! As others have pointed out here the difficulties in doing this, the towns they have to squeeze through also tax the heck out of them and lay down restrictions on what times of the night they are allowed to do this.

Boeing on the other hand, is based in Seattle. All of their manufacturing plants are ocean connected. Everett for the widebodys (747/777/787) and to a lesser extent, via Lake Washington and the locks, the Renton plant is also. (737 assembly). (Boeing built a series of civilian and military hydrofoils here in the late 70's from this plant utilizing the lake/ocean access!)

Airbus knew they were going to have these logistics problems but the political pressure they are subjected to far outweighs the political pressure that Boeing has to deal with. It comes to the point that the local politicians have too much interest and input on decisions that should never be there. That is the problem when your company is subsidized by the government.

RE: Subsidies
By Inepted on 3/2/2007 10:29:14 PM , Rating: 2
Don't mean to be a stickler but Boeing is no longer 'based' in Seattle. Their headquarters are now located in Chicago. The Seattle production facilities are being downsized what seems like every year now. Most of the engineers still work there but it seems major manufacturing is being done in Japan and other parts of the US, as noted in a previous comment.

RE: Subsidies
By timmiser on 3/3/2007 12:12:43 AM , Rating: 2
Good point. The corporate offices moved to Chicago and made the company an 'Illinois' company for tax puroses/benefits. Washington State was a little over zealous in taxing the Boeing company and eventually drove them out of town. Of course there is zero production being done in Chicago, it was just a move for the tax reasons. Boeing lobbied for some tax relief but the local politicians thought they were bluffing. Oops, sounds like an Airbus problem already!!

Airplanes parts and sub-sections are produced all around the world, but the final assembly (where all the big parts come together, which is what I was comparing to Toulouse/Airbus), is still done and will continue to be done in Seattle.

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