Airbus says A380 superjumbo jet orders may be 33% lower

Posted May 28th 2008 12:10PM by Joseph Lazzaro
Filed under: International Markets, Other Issues, Boeing Co (BA)

Airbus said 2008 orders for the A380 superjumbo jet may be one-third lower than previously forecast, as higher fuel costs and an economic slowdown moderate travel growth, Bloomberg News reported Wednesday.

Airbus said it may receive about 20 orders in 2008 for the 525-seat A380 superjumbo, the world's largest commercial jetliner. Earlier, Airbus had projected up to 30 orders for the A380 in 2008.

Airbus' announcement did not negatively impact the stock, at least not at the outset. Shares of Airbus' parent EADS gained 28 cents to 14.95 euros in Wednesday afternoon trading on the Paris exchange.

High fuel costs hurt travel

Many analysts expect both commercial airline orders and international travel growth to slow, as higher jet fuel prices force airlines to reduce schedules and take planes out of service, and consumers to curtail leisure travel plans.

Historically, jet fuel ranks first or second in airline costs, and those costs have increased more than 70% in the past 12 months, due to near-record $127 per barrel oil. Oil is up about 100% in 12 months.

Currently Airbus has a small 2008 plane order lead, 397-378, over rival Boeing (NYSE: BA), Bloomberg News reported Wednesday.

Airbus' A380 is the primary competitor to Boeing's 747, the industry standard for transcontinental and trans-hemisphere flight. Airbus has projected the A380's larger capacity would serve as a new order inventive, but rising fuel costs may now lessen the A380's market share gains, due to the likely more-modest international travel gains stemming from those rising flight costs.

Tags: 747, A380, Airbus, BA, Boeing, business travel, commercial aviation, EADS, featured, leisure travel, oil, oil prices