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Print 51 comment(s) - last by kmmatney.. on Mar 6 at 11:45 PM

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 Ringold on 3/3/2007 12:14:50 AM , Rating: 4
His main point was not that labor markets caused delay. In fact, he noted highly skilled labor exists in Europe. His point was an efficiency one; read again the part where he clearly lays out that the European worker has legislated his or herself out of profitable employment. That said, it's almost undeniable that there must be some small impact from such generous government handouts on the delays. If Boeing fails, it goes bankrupt. If Airbus fails, EU member states bail them out with low (or no) interest rate bonds. That's perfect to create a culture not as performance oriented as that of Boeing, leading to poor execution. Excuses are excuses and nothing more; investors could care less about the 'why'.

Additionally, Boeing's military contracts are pedestrian in compared to the WTO-busting subsidies forked over to EADS/Airbus. The OP is more versed in it than I am, since he said he was an analyst for the market, but it's clear enough there's no comparison. You're merely trying to shake any weak stick you can at Boeing. Fact is, Boeing has single-handidly proven that the capitalist system does indeed lead to the best outcomes, while Airbus is a case study in the failure of socialism.


RE: Subsidies
By dever on 3/3/2007 11:00:49 AM , Rating: 3
Well said Ringold. But my favorite quote of his was...
quote:
Plus Airbus would never build these planes if it were not for these subsidies; how else are they going to finance the projects?
He just made the point for the rest of us. Apparently, the market wouldn't support the project so government had to step in.

These socialist ideas and ideals sound good to the uninitiated, because they promise to steal from the rich and give to the poor, but the reality is always the opposite.


RE: Subsidies
By slunkius on 3/5/07, Rating: 0
"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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