UPS to Cancel A380 Order

UPS (NYSE:UPS) today announced its intent to cancel later this year an order for 10 Airbus A380 freighters.

The final cancellation decision will be formally presented to Airbus on the first date specified under an agreement reached last week that gives either party the right to terminate the order.

Last week's agreement specified a revised delivery schedule that delayed UPS's first A380 jumbo freighter from 2010 to 2012. UPS originally expected its first freighter in 2009.

UPS had intended to complete an internal study of whether it could wait until 2012 for the aircraft, but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane.

"Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said David Abney, UPS's chief operating officer and president of UPS Airlines. "We no longer are confident that Airbus can adhere to that schedule. UPS has built one of the largest airlines in the world in order to ensure reliable service to our customers, and we're confident we have the resources to continue doing so in the future."