UPS Said To Be Near Cancelling Orders

Things are looking dire for the freighter version of the beleaguered Airbus A380... with several sources reporting United Parcel Service Inc. (UPS) is close to cancelling its order for 10 of the planes. That would leave Airbus without any orders for the megasized cargo hauler.

French paper Les Echos reports UPS may make a decision on its future plans as soon as next week, but did not disclose its source(s) for the story. It is common knowledge, however, that UPS is currently mulling over its choice of sticking with the A380F, after rival cargo company FedEx Express cancelled its orders for 15 of the mammoth freighters in November.

"They are deciding that as we speak," Airbus COO John Leahy told reporters this week, when asked about UPS's plans. Two other customers -- Emirates, and aircraft leasing company ILFC -- converted their freighter orders to A380 passenger planes.

An Airbus spokeswoman would not confirm the report, and a spokesman for UPS said Friday there was "no change to the situation," and that the company was still reviewing its order.

UPS was among several carriers that sent its own team of investigators to review A380 production in Toulouse, following Airbus' announcement of a third delivery delay in October. The first delivery of the certified passenger-variant of the A380 is currently set for late 2007, to launch customer Singapore Airlines.

While officials at Airbus maintain work would continue on the A380F even if UPS pulls its orders, a cancellation would force Airbus to pin its hopes in the freighter market on the midsized A330-200F twinjet, which was formally launched this week. Airbus currently has six firm orders for the plane, and a Letter of Intent for another 20.

That's already more orders Airbus received for new freighters, period, in 2006 -- chalking up a goose egg, compared to rival Boeing's 81 orders for cargo variants of its 747-8 and 777 airliners. Airbus will build its last A300/A310 freighters this year.

In better news for the superjumbo, on Thursday Malaysian carrier MAS said it would stick by its orders for six A380 passenger aircraft. The airline was considered by many to be among the most volatile A380 customers.

To date, FedEx is the only A380 customer that has opted out of its orders.

FMI: www.airbus.com, www.ups.com