Airbus executive says considering cuts to A380 production, still undecided

[SINGAPORE] Airbus SE is considering cutting production of its A380 superjumbo to six or seven planes a year, but has made no final decision on the matter, a top executive said on Thursday amid growing question marks over the future of the double-decker jet.

The A380 has battled against sluggish sales, squeezed by smaller, more efficient twin-engined jets, and Airbus has already cut output of the plane from an annual peak of 30 while waiting for a recovery in demand.

"We believe we can produce this aircraft at 6-7 a year in an industrial way," Airbus chief operating officer Fabrice Bregier said after the first Singapore Airlines Ltd A380 featuring a new cabin configuration landed in Singapore.

"The A380 will find its way progressively," he said.

Industry sources told Reuters this week that the company was exploring plans to cut A380 production to as low as six aircraft per year as it battles to make the world's largest airliner commercially viable beyond the end of the decade.

Following a clampdown on costs, Airbus has said the A380 can break even at production levels of 20 a year, while Bregier has previously said he is pushing the breakeven level as low as possible to sustain low production.

Airbus chief executive Tom Enders expressed his confidence in the jet on Wednesday, though analysts say ongoing negotiations over a deal with carrier Emirates will be decisive for the future of the aircraft.

Emirates, which held off signing an order for an estimated 36 aircraft at last month's Dubai Airshow, wants guarantees Airbus will produce the A380 for the next 10 years.

Reducing output to six a year would help to bridge that period and support key second-hand values while Airbus looks for other buyers, but could leave the programme losing money for at least part of the period.

REUTERS