Airbus cuts A380 delivery target to avoid glut

Airbus cuts A380 delivery target to avoid glut

Europe's Airbus on Tuesday cut the delivery target for its A380 superjumbo to 12 a year from 2018, down from 27 in 2015 and about half what is projected for this year, to prevent a glut of unsold planes as airlines shun the industry's behemoths.

It announced the cutback late on the second day of the Farnborough Airshow, taking the shine off a $20 billion haul of orders for smaller jets, after the decision was reported in French newspaper La Tribune.

The move raises the possibility that Airbus could revert to losses on the double-decker jet after breaking even for the first time last year, but averts the need to start ordering parts for unsold planes: something it has pledged not to do. Parts for A380s must be ordered up to two years ahead.

Airbus said it would still break even with 20 deliveries next year, but gave no specific commitment beyond that.

"The company will continue to improve the efficiency of its industrial system to achieve breakeven at 20 aircraft in 2017 and targets additional cost reduction initiatives to lower breakeven further," Airbus said in a statement.

Sales of large four-engine airliners like the 544-seat A380 have been hit hard by improvements in the range and efficiency of smaller two-engined models, which can be easier to fill.

The trend became starker on Monday when one of the mammoth plane's earliest advocates, Richard Branson's Virgin Atlantic, opted for 12 of Airbus's A350-1000 twin-engined jets after progressively shelving its longstanding order for A380s.

Airbus Chief Fabrice Bregier insisted the aircraft was "here to stay," while sales chief John Leahy said earlier he was talking to some potential A380 buyers. Read More

AirAsia eyes Hong Kong listing as it expands in North Asia

AirAsia eyes Hong Kong listing as it expands in North Asia

AirAsia is studying a dual listing in Hong Kong, part of plans to become a pan-Asian low-cost airline player as it also moves towards setting up a joint venture in China, people familiar with the matter said on Sunday.

The Malaysia-based group is simultaneously looking for more aircraft to meet strong demand in North Asia and elsewhere, the people said on the eve of Britain's Farnborough Airshow.

Asia's largest low-cost airline group, which already has affiliates across Southeast Asia, aims to form the venture with the backing of a Chinese state-owned enterprise (SOE) to help capture traffic from fast-growing secondary and tertiary cities.

Co-founder and Chief Executive Tony Fernandes referred to the potential dual listing without naming a location and hinted at a potential new aircraft order in remarks posted on his Twitter account on Sunday.

"Looking at more ancillary (revenues), more capacity and dual listing," he said.

The airline group is talking to Chinese banks and potential shareholders including ChinaEverbright Bank, one source said.

Expansion into the world's fastest growing aviation market comes as China edges towards overtaking mature Western air travel markets despite recent slowing economic growth.

It also comes as AirAsia rebounds from recent turbulence due to lower oil prices and as Fernandes and his partner put in additional investment and take greater control of the business.

The share price fell sharply in 2015 amid negative reports about its finances, but has rallied sharply since then.

A Hong Kong listing could help to raise the company's profile, coming on the heels of the flotation there of aviation lessor BOC Aviation, and allow it to raise new capital.

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