May 7 (Bloomberg) -- Airbus SAS lost more orders for its A350-1000 from Etihad after the Abu Dhabi state-owned airline canceled seven jets, dealing a blow to a model that the planemaker has positioned against Boeing Co’s 777-300ER.
Airbus disclosed the dropped deal today in its monthly tally of orders and deliveries. The cut follows the cancellation of six A350-1000s by Etihad in December, paring the carrier’s order to 12 A350s, less than half the number it originally agreed to take on. The list price of the A350-1000 is $320.6 million, valuing the lost order at $2.2 billion.
Airbus initially promised the A350-1000, the biggest variant of its A350 family, for 2014 before delaying it last year, saying it needed three more years to improve performance. Qatar Airways and Emirates, the largest A350 customers, have said they are still not content with the design, increasing pressure on Airbus as Boeing plots a successor to the 777-300ER.
“The recent delay to the A350 XWB program provided an appropriate opportunity for Etihad to revisit its projected fleet mix in the latter part of the decade,” Etihad said in a statement sent by e-mail. The company said it has “has a great deal of confidence” in the program.
Airbus parent European Aeronautic, Defence & Space Co. rose 0.6 percent to 29.71 euros at the close in Paris. That extended the shares’ year-to-date gain to 23 percent.
The A350-1000 variant now has 62 orders and hasn’t won a new customer since 2008. The mid-sized A350-900 has 368 orders, and the smallest type, the A350-800, has 118 orders. The smaller jets will compete with Boeing’s 787 Dreamliner, which entered service in late 2011 after more than three years of delays.
‘Source of Concern’
“This suggests that despite the relaunch, the plane isn’t what the market wants,” said Nick Cunningham, managing director of London-based Agency Partners and a 25-year veteran of aerospace analysis. “It’s definitely a source of concern.”
Boeing has said it will take its ideas about a new wide-body, often dubbed the 777-7X and 7779X, to its board by the end of this year. The 777 is Boeing’s most profitable commercial jet, and Emirates, the largest customer for the 777, has urged the manufacturer to decide soon on a successor.
Emirates has 70 A350s on order, 20 of which are for the A350-1000. President Tim Clark said last month that he wasn’t happy with the re-design of that model and hadn’t yet decided whether he’d keep the orders, swap them for A350-900s, or do something else. Airbus may need to again review delivery of the model given that its redesign has failed to ignite orders.
“We kind of put them on notice that frankly we were quite happy with the way it was,” Clark said in an April 26 interview.
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