A380: The Dam Breaks...

FedEx Scraps Airbus A380 Order, to Buy 15 Boeing 777s (Update2)

By Mary Schlangenstein

Nov. 7 (Bloomberg) -- FedEx Corp., the world's largest cargo airline,
scrapped its order for the troubled Airbus A380 jumbo jet and said it
would purchase 15 Boeing Co. 777 jets instead. It was the first
cancellation of an A380 order.

FedEx, working to meet international shipping demand, scrapped the
10-plane Airbus order after production troubles delayed planned
deliveries from January 2009 into 2010. FedEx's new order for Boeing
777 freighters is the largest ever for the plane and carries a list
value of as much as $3.6 billion.

``FedEx has made significant investments in our network to meet
customers' needs and fulfill our business objectives,'' FedEx Chief
Executive Officer Fred Smith said in a statement today. ``It was
necessary and prudent for us to acquire the Boeing 777 freighter.''

FedEx's move is the latest reverse for Toulouse, France- based Airbus
in its A380 program, which has been delayed three times in 16 months.
Virgin Atlantic Airways Ltd. last month postponed its order for the
double-decker jumbo jet after Airbus announced the latest delay.

wrote:
FedEx Scraps Airbus A380 Order, to Buy 15 Boeing 777s (Update2)

You've got to wonder if this isnt' indeed the beginning of much bigger
cancellations.

"Tchiowa" wrote:

FedEx Scraps Airbus A380 Order, to Buy 15 Boeing 777s (Update2)

You've got to wonder if this isnt' indeed the beginning of much bigger
cancellations.

Certainly the UPS freighter order is now suspect. The real question is where the
passenger orders will go.

Rick Blaine writes:

Certainly the UPS freighter order is now suspect. The real question is where the
passenger orders will go.

The 747 could be kept alive for quite some time.

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Mxsmanic wrote:

The 747 could be kept alive for quite some time.

And the 787, while smaller and requiring a change of service concept,
looks to be a *very* nice plane indeed.

Neil

Mxsmanic wrote:
Rick Blaine writes:

Certainly the UPS freighter order is now suspect. The real question is where the
passenger orders will go.

The 747 could be kept alive for quite some time.


As much as this might look like the beginning of the end, I suspect
it is only a short term problem. Airbus can't afford to not deliver
this plane and
they will. They have relatively unlimited resources to ensure that the
plane is delivered. Once it is, and they start rolling off an assembly
line,
as long as no serious latent problems are discovered, it becomes a
more predictable aircraft to purchase and easier to sell. At that
point
the only question left will be whether there is a market for the plane.
The 747 won't "replace" an A380. Neither will a 777 or a 787. The
last two will compete and as such the question is whether the A380
is useful or not. That can't be answered now. But there is assuredly
SOME market for such a large plane. The only question will be if
it is big enough to justify the aircrafts costs. I suspect Airbus can
keep
the production going long enough for it to mature into the market well
past the 747's ability to sell aircraft. The only thing that will kill
the
A380 is if the market is just too small. The current problems with
the aircraft have little to do with that question.

the only question left will be whether there is a market for the plane.
The 747 won't "replace" an A380. Neither will a 777 or a 787.

Funny you should mention that. The numbers I've seen say that the
dead weight per passenger or per pound of cargo is much higher on a
380 than on a 777 or 747. On long routes like trans-Pacific, the 777
actually has a higher cargo capacity than a 380 because of all of the
fuel that a 380 has to carry.

R's,
John

John L writes:

Funny you should mention that. The numbers I've seen say that the
dead weight per passenger or per pound of cargo is much higher on a
380 than on a 777 or 747. On long routes like trans-Pacific, the 777
actually has a higher cargo capacity than a 380 because of all of the
fuel that a 380 has to carry.

Yet another reason to buy Boeing.

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