UPS kills order for Airbus cargo jet

Airbus was left with an empty order book for the cargo version of its much-delayed super-jumbo jet after United Parcel Service Inc. said Friday that it would cancel its 10-plane order.

The move comes just a week after UPS and Airbus reached a revised agreement that gave either party the right to terminate the order.

UPS said it decided to cancel after it learned that Airbus was diverting employees from the freighter program to work on its passenger plane program.

“We lost confidence in their ability to meet” delivery schedules, UPS spokesman Mark Giuffre said of the A380F agreement with Airbus, a unit of the European Aeronautic Defense & Space Co.

The announcement by Atlanta-based UPS comes four months after rival FedEx Corp. also scrapped its 10-plane order.

Airbus now has no orders for the freighter version of the super-jumbo jet, dealing a new blow to the A380 program. Its two-year delay has cut $6.6 billion off the company’s profit forecasts for 2006-10. Airbus still has orders for passenger versions of the A380.

“We respect the client’s decision,” Airbus spokeswoman Barbara Kracht said. “UPS is and remains a valuable and strong customer and business partner for Airbus.”

The A380 program as a whole “is progressing well and in line with the new timetable, with the first delivery to the first customer in October 2007,” she said, referring to Singapore Airlines, which is set to become the first carrier to take paying passengers in the double-decker plane.

UPS declined to comment on whether the company would order cargo versions of Boeing’s 747 to fill the gap left by the cancellations. “We’re looking at our next steps,” Giuffre said.

Chris Lozier, an analyst for Morningstar, said the cancellation represented a crippling blow for the entire Airbus cargo program and a boon for Chicago-based Boeing Co.

Boeing declined to say whether it was in talks for a UPS contract.

UPS currently has 11 747s in its fleet of 284 aircraft.