Emirates backs out of Airbus deal

Engine maker Rolls-Royce has suffered a £2.6 billion blow to its order book after Emirates scrapped plans to buy 70 Airbus A350s.

The A350 has been hit by delays and a multi-billion-dollar revamp. Picture: Getty

The Dubai-based airline had placed the order as part of a wider deal with Airbus in 2007 and had been due to receive the first extra wide body (XWB) A350 planes in 2019.

Rolls said it was hopeful that the delivery slots would be taken by other airlines, but admitted that in the meantime the cancellation will reduce its order book by around 3.5 per cent.

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The loss of the Emirates order comes in a year when Rolls-Royce expects revenues and profits will fail to grow due to the impact of defence spending cuts among major customers.

The firm said: “Demand for the Airbus A350 remains strong, with more than 700 aircraft and 1,400 Trent XWB engines already sold. We retain a close working relationship with Emirates and continue to support their 38 Rolls-Royce-powered wide body aircraft currently in service.”

Airbus said it remains confident in its A350 programme, with 742 firm orders half a year before the plane’s expected entry into service. Emirates’ decision to cancel the order follows the airline’s commitment to buy 50 additional A380s at the last Dubai Airshow.

The planemaker said: “Airbus and Emirates benefit from a long-standing relationship and the airline recently reiterated its confidence in Airbus products, particularly by praising the A380 and the benefits the aircraft brings to their operations.”

The A350 has been hit by delays and a multi-billion-dollar revamp as Airbus attempts to compete in a long-haul market dominated by Boeing’s 777 and 787.

Sash Tusa, aerospace and defence analyst at Edison Investment Research, said the move by Emirates puts increasing pressure on Rolls to win new engine positions. He added: “The blow to Airbus, however, may be far harder, with the loss of a 70 A350 wide-body plane order coming just as rival Boeing’s 777X has been launched.”