EOW May 2007

Transat lant ic Cable

While a formal presentation of its intention to withdraw will be made later, UPS said it understands that either party to the deal has the right to cancel the order. Between them, Airbus (Toulouse, France) and Chicago-based Boeing account for virtually the entire global jet airliner business. Although Boeing declined to say whether it was in talks for the UPS contract, Chris Lozier, an analyst for the investment research firm Morningstar, told the Chicago Tribune (3 rd March) that the cancellation is a ‘crippling blow’ for the entire Airbus cargo programme and a boon for Boeing. “It almost spells the demise of that cargo business, because the alternative to the 380 is the [Boeing] 747,” Mr Lozier said. “You would expect UPS to be at the negotiating table with Boeing right now, if not weeks ago, working out details for the 747.”

Airbus and Boeing

American delivery giant UPS walks away from a big Airbus order

United Parcel Service, the largest package delivery company in the world and the last remaining customer for the cargo version of the Airbus A380 superjumbo jet, said on 2 nd March that it was cancelling its order for 10 of the planes. UPS (Sandy Springs, Georgia) cited concerns that Airbus would not be able to meet a revised schedule calling for delivery in 2012. The cancellation of the $2.8 billion order is the latest blow to the European plane maker, which had just announced the details of a cost-cutting plan expected to result in the loss of 10,000 jobs over four years. Only months earlier, the international courier service FedEx (Memphis, Tennessee) also abandoned an order for 10 of the big freighters, leaving Airbus without a customer for the A380. The pull-out by UPS – described by a company spokesman as a final decision – followed confirmation by Airbus on 26 th February that it had halted work on the A380 to concentrate on the passenger version of the plane, now two years behind schedule.

Déjà vu for Boeing: an Air Force contract is challenged

Even as Boeing Co seemed poised to benefit from the United Parcel Service repudiation of a big contract with Airbus (see above), Boeing faced similar troubles of its own.

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EuroWire – May 2007