Airbus Postpones Deliveries to Emirates Airline, Boeing Does the Same to Delta

Planemaker Airbus said that it would step up cost cuts to minimise the impact of these delays and added that it was postponing the delivery of 12 A380 planes to Emirates Airline over the next two years.

Following an agreement between Emirates and engine maker Rolls Royce and a consecutive deal between Airbus and Emirates, while a set of delivery of six airplanes would be postponed from 2018 to 2019, Airbus, whose main rival is U.S. group Boeing, said six deliveries of the A380 would be postponed from 2017 to 2018.

“Airbus re-confirms the target to deliver around 12 A380s per year from 2018 as announced earlier in July 2016. Further fixed cost reduction initiatives will be accelerated so the impact on break-even in 2017 is minimal,” the company said in a statement.

The airplane maker was having some unspecified technical issues with Rolls-Royce engines for A380 jets, Emirates Airline had said in November.

Although it broadly maintained its full-year financial forecasts, Airbus reported in October lower-than-expected third quarter profits. The company had earlier this month announced a deal to sell 100 jets to IranAir,

Airbus shares closed flat on Tuesday. The stock is up by around 1.5 percent since the start of 2016, underperforming a 4.6 percent rise on France’s benchmark CAC-40 index.

On the other hand rival Boeing is also in trouble as Delta airlines announced is it about to cancel order for 18 Boeing 787 Dreamliner aircraft.

It would cancel an order for 18787 Dreamliner aircraft, which it assumed as a part of its merger with Northwest Airlines, Delta Airlines said on Tuesday that the decision was taken in agreement with Boeing.

At current list prices, the order is valued at more than $4 billion. Delta did not disclose specific terms of the agreement in its statement.

It would continue to take delivery of 737-900ER aircraft through 2019, the airline, which acquired Northwest in 2008 for $2.6 billion in shares, said. Delta declined to comment beyond its statement.

Delta and other top U.S. airlines are seeking to slow flight capacity growth and in some instances shrink existing service in response to falling airfares and the cancellation comes at such a time.

Delta says that its unit revenue would be hurt as Airlines like Norwegian Air Shuttle ASA from outside the United States are adding flights which have exceeded passenger demand.

Delta has 25 widebody aircraft from Airbus Group SE, the A350, already slated for delivery that will add to its flight capacity this decade.

to make the schedule “more consistent with(the) expected pace of international market improvement,” Delta said earlier this year that it would defer the delivery of four A350s by a year or two from 2018.

(Adapted from CNBC)

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