Bloomberg News

Airbus’s Longest Plane Proves Short-Lived as A340 Orders Dry Up

November 10, 2011

Nov. 10 (Bloomberg) -- Airbus SAS has ended production of its four-engine A340 aircraft after the jet with the company’s longest fuselage lost out to Boeing Co.’s twin-engine 777 model.

Airbus, the world’s largest maker of commercial aircraft, announced the end of the program today as parent European Aeronautic, Defence & Space Co. reported earnings. Terminating the program will lead to an operating gain of 192 million euros ($261 million), EADS said, without explaining why it’s concluding production of the jet that started service in 1993.

“In an environment where the fuel price is high, the A340 has had no chance to compete against similar twin engines, and the current lease rates and values of this aircraft reflect the deep resistance of any airlines to continue operating it,” said Bertrand Grabowski, managing director of the transport group at DVB Bank SE, among the biggest aircraft financiers in Europe.

The A340, which held the record as the longest civil aircraft until Boeing stretched its 747-8 jumbo, fits up to 375 passengers and can fly non-stop from Singapore to Los Angeles. Airbus has said the four engines make the aircraft better suited to traverse remote areas such as oceans and mountain ranges. German Chancellor Angela Merkel received two customized A340s this year previously owned by Deutsche Lufthansa AG.

‘Bigger Than Yours’

The program is the shortest-lived so far for Airbus, which saw orders for the jet dry up after safety regulators began allowing twin-engine models such as the Boeing 777 to fly long routes without having to stay close to emergency stopping areas. There are 365 A340s in operation today.

The plane is manufactured on the same production line as the more popular A330, a twin-engine aircraft with less range that has fared well, particularly amid delays on the Boeing 787 Dreamliner. Airbus sold no A340s in the last two years, EADS said today. Boeing, by contrast, has won 132 orders for the 777 in this year’s first 10 months and is boosting output.

Lufthansa, Germany’s largest carrier, has 63 A340s, of which 50 are at Lufthansa and 13 are operated by its Swiss unit. The company has no outstanding orders for A340s and doesn’t expect financial repercussions from the program ending, spokesman Thomas Jachnow said by telephone today. Other major operators include Singapore Airlines Ltd and Virgin Atlantic Airways Ltd.

Virgin founder Richard Branson posed in front of an A340 with German supermodel Claudia Schiffer at a Farnborough Air Show a decade ago, with the words “Mine’s bigger than yours” emblazoned on the side of the aircraft.

The largest A340-500 and A340-600 versions are powered exclusively by Rolls-Royce Holdings Plc Trent 500 engines, and Airbus has said the use of four engines reduces maintenance costs because they can operate at lower thrust. The A340-600 has an unusual undercarriage as it boasts an additional set of wheels in the central part of the fuselage between the wings.

“It’s sad, as it was a beautiful plane, and very nice to fly on, but the plane was too heavy and there was a big fuel burn gap between the A340 and Boeing’s 777,” said Nick Cunningham, an analyst at London-based Agency Partners.

--With assistance from Alex Webb in Frankfurt. Editors: Benedikt Kammel, Christopher Jasper

To contact the reporter on this story: Andrea Rothman in Paris at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus