Airbus Group NV said in a statement today that its largest buyer of superjumbos from the A380 series – Emirates, cancelled its entire order for A350 aircraft, which amounted to 16 billion dollars at the time when the deal was negotiated and is estimated at 21.6 billion dollars at current prices. This is considered a massive failure on the company’s efforts to stop the dominance of its rival Boeing Co. in the wide-body aircraft segment.
As reported by the Wall Street Journal, one of the Emirates’ spokesmen revealed: “The contract which we signed in 2007 for 70 A350 aircraft has lapsed. We are reviewing our fleet requirements.”
According to the Airbus’ statement, Emirates will call off 50 A350-900 units and 20 of the larger units – A350-1000. The agreement between the two companies was officially unveiled by Emirates seven years ago and the delivery of the aircraft was scheduled from 2019. This is the largest order cancellation in the history of Airbus Group NV to date.
The wide-body model A350, which has been currently tested, is manufactured to compete with the 787-Dreamliner produced by Boeing Co. and is due to enter service until the end of 2014.
Airbus said in its statement, which was cited by the Financial Times: “Airbus confirms that Emirates Airline has decided to cancel its order of 70 A350. The decision follows ongoing discussions with the airline in light of their fleet requirement review (…) Airbus and Emirates Airline benefit from a long-standing relationship and the airline recently reiterated its confidence in Airbus products.”
The President of Emirates – Mr. Tim Clark – has been recently criticizing the A350-1000, explaining that the model did not meet his specifications.
Airbus Group NV was losing 4.18% to trade at 51.62 euros per share by 9:22 GMT, marking a one year change of +21.93%. According to the information published on the Financial Times, the 25 analysts offering 12 month price targets for Airbus Group NV have a median target of 60.00, with a high estimate of 73.00 and a low estimate of 30.50. The median estimate represents a 11.38% increase from the last price of 53.87.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
