The Airbus Group has announced that it will reduce the production of the A380, its flagship, double-decker, wide-body, four-engine jet airliner that has a list price of $432.6m (£325.48m, €391m). It added that it would make only 12 of these superjumbos in 2018, a sharp decline from the 27 A380s it delivered in 2015.
The announcement follows Airbus winning a huge order from Malaysia's low cost carrier, AirAsia for 100 A321 single-aisle passenger jets. It also follows its A380 operations reaching breakeven on a current cost basis just last year.
Despite the production cut, Airbus said its hopes of breaking even have not changed. "The company will continue to improve the efficiency of its industrial system to achieve breakeven at 20 aircraft in 2017 and targets additional cost reduction initiatives to lower breakeven further," Airbus said in a statement according to the Financial Times.
The company also said that the decline in the number of A380s would be offset by increased demand for its single-aisle A320 aircraft and midsized A350 jetliners.
This decision by the Toulouse-headquartered company indicates that demand for the superjumbos has failed to meet the original projections of the company. The Airbus A380, which is the largest passenger aircraft in the world, had its first flight in 2005. It was once estimated that about 1,200 of these would be sold across 20 years. However, until date Airbus has received only 319 orders for the aircraft, of which 193 have already been delivered, according to another news report.
Airbus had launched the A380 to compete with Boeing's big aircraft such as the 747, but the French company has faced a lot of production and budget problems. It is said that the A380, apart from proving to be technically difficult to build, consumed billions of dollars more than the planned budget.
While this has raised doubts about the future of the A380, Fabrice Brégier, chief executive of Airbus Commercial, insisted that they were not giving up on the superjumbo. "We are maintaining, innovating and investing in the A380, keeping the aircraft the favourite of passengers, the airlines and airports — today and in the future. The A380 is here to stay!" he said.