Business

Airbus shares fall over A380 threat

An Airbus A380 of German air carrier Lufthansa Image copyright European Photographers Agency

Shares in French aviation firm Airbus fell as much as 4.5% on Thursday after it said it might halt production of its A380 superjumbo in 2018.

The aircraft manufacturer added it expected profits would be flat in 2016.

Airbus shares fell 10.4% to €43.20 (£34.32)on Wednesday, marking their worst one-day fall for six years and wiping €3.9bn off the company's value.

At the same time, Qatar Airways said it was postponing delivery of the first A350 jetliner "until further notice".

Delivery of the A350 to Qatar Airways had originally been planned for 13 December followed by a flight to Doha.

The two sides then scheduled a pre-delivery ceremony for Friday, before the handover was scrapped altogether.

The A380 aircraft is only in its seventh full year of operation and cost about $25bn to develop.

While Airbus will break even on the plane in the years up to 2018, chief financial officer Harald Wilhelm said the aircraft manufacturer would have to provide different engines from 2018 to make it more attractive, or discontinue making it altogether.

The announcement prompted a furious reaction from the head of Dubai's Emirates airline, who said it was prepared to invest heavily in buying more of the aircraft.

Tim Clark, president of Emirates, said he had protested to Airbus.

Mr Clark said if Airbus went ahead with proposals to upgrade the A380 by adding new Rolls-Royce engines, Emirates would eventually replace all the 140 aircraft it had ordered with the newly upgraded version.

He added the aircraft was popular with passengers and "full to the gunwales" with passengers.

Airbus has already announced plans to cut production of its A330 aircraft by 10% to nine aircraft a month.

But it said on Wednesday it would have to cut production again in 2016 to an unspecified level, following slow progress in finding buyers for the aircraft, ahead of a planned upgrade in 2017.

In an attempt to restore calm, Airbus head of corporate communications Rainer Ohler issued a statement on behalf of the company which said: "The entire Airbus top management continues to believe strongly in the market prospects of the A380, but any investment by Airbus requires a sound business case, which we will continue to study,"

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