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Putting Airbus A380 out of its misery best course: Bloomberg commentary

THE Airbus decision to shut down the A380 programme is more of a blow to the European pride than the planemaker's pocketbook, says a Bloomberg News commentary

Putting Airbus A380 out of its misery best course: Bloomberg commentary

THE Airbus decision to shut down the A380 programme is more of a blow to the European pride than the planemaker's pocketbook, says a Bloomberg News commentary

22 February 2019 - 19:00

THE Airbus decision to shut down the A380 programme is more of a blow to the European pride than the planemaker's pocketbook, says a Bloomberg News commentary.

The super-sized A380 - a hit with passengers though not with airlines - makes Boeing's 747 jumbo seem small. From 2021, when the production. Europe's industrial might may well seem more ordinary.



'Arguably, that's a good thing,' said the commentary. 'Lessors and owners of A380 investment funds will be unsettled by the decision because it may impact the resale value of the aircraft. Yet for the manufacturer, it's a logical and necessary step. The A380 isn't an important source of revenue - accounting for just two per cent of the company's aircraft deliveries in 2018 - and it doesn't make money. Putting it out of its commercial misery is the kind thing to do.'



The financial costs of abandonning the double-decker look manageable. Airbus's full-year profit suffered a net EUR463 million (US$522 million) hit from the cancellation, but it expects a neutral impact on free cash flow over the next three years, said Bloomberg.



By announcing the decision now, incoming chief executive Guillaume Faury can focus on more important revenue drivers such as the single-aisle A320 and the widebody A350, which together make up about nine out of 10 Airbus deliveries.



The five per cent rise in Airbus's share price brought the stock to within touching distance of a record high, suggesting investors too are looking to the future rather than mourning the engineering triumphs of the past.


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