Airbus to cut A380 output

European plane maker Airbus plans to cut production of its A380 super jumbo from 2017 as it struggles to revive sales of the world’s largest passenger jet, sources said.

Airbus to cut A380 output

It has told its suppliers to slow production to support an assembly rate of 1.7 aircraft per month from next year, compared with production of just over two a month now.

The exact month in which the slowdown would be felt in the Toulouse assembly plant was not immediately clear.

Airbus declined to comment on talks with suppliers. The company does not publish production figures for its biggest model, but only targets deliveries.

Airbus, which has delivered 143 A380s since it began service in 2007, says the double-decker is becoming more attractive due to lower oil prices.

In February, Airbus chief executive Tom Enders said it had between 20 and 30 A380s on its delivery list for 2017. RBC Capital Markets analyst Rob Stallard said he estimates Airbus will deliver 24 A380s next year, with its profit margin on the jet staying at zero, or exactly breakeven.

At the end of March, Airbus had 135 aircraft on its books that have been sold and are waiting to be produced, mainly for leading customer Emirates which recently topped up its order.

But after deducting aircraft that are unlikely to be delivered, analysts say the order situation is weaker.

Air France has said it plans to cancel two A380s listed on the Airbus order book.

Another 10 listed anonymously are believed to have been cancelled by Hong Kong Airlines and 20 are allocated to leasing firm Amedeo, which are seen as unlikely to enter production until the lessor places them with airlines.

Analysts also say Qantas and Virgin Atlantic are unlikely to take a combined total of 12 of the jets.

Earlier this year, Iran announced a preliminary order for 12 super jumbos as it emerges from sanctions, but doubts remain over how quickly the order can be finalised as Iran faces continued financial restrictions.

Airbus says it is working on several sales campaigns.

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