Emirates cancels order for 70 Airbus A350s

Rolls-Royce remains hopeful despite loss of £2.6bn order

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

Emirates 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.

The cancellation is Airbus' largest-ever. The A350 aircraft has had 150 cancellations including the most recent Emirates cancellation.

Speaking at the Airbus Innovation event in Toulouse, France, John Leahy, chief operating officer for customers, said that the decision was not related to the predicted performance of the aircraft. He said: “Delivery is five years out so it won't have any impact. It's not the world's greatest news, but life goes on and the programme is in pretty good shape.

“Look at the size of the market. There is a very big market going forward.”

He added that the comapny had already received enquiries about taking up the manufacturing slots for the A350 XWB that had been vacated by Emirates.

Rolls-Royce, which has major bases in Bristol and Derby, 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 about 3.5%.

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. Shares fell 2% on the news.

Rolls-Royce 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 remained confident in its A350 programme, with 742 firm orders half a year before the plane's entry into service.

The decision to cancel the order follows the airline's commitment to buy 50 additional A380s at the last Dubai Airshow.

The company 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."