United Parcel Service Inc., the world's largest package shipper, and plane maker Airbus said Friday that they have agreed that either company can cancel an order this year for 10 A380 freighters after repeated production delays. UPS will decide whether to retain the $2.8 billion order after getting new delivery dates from Airbus, UPS spokesman Mark Giuffre said in an interview. The companies declined to provide details of the accord.Airbus' ability to void the order heightens chances that the manufacturer may scrap the troubled cargo version of the world's largest commercial jet amid cost overruns and customer cancellations. Atlanta-based UPS is now the only buyer for the A380 freighter. "Two out of three customers cancel or convert orders, not a lot of market demand, engineers needed elsewhere. That's a recipe for cancellation," said Richard Aboulafia, vice president of Teal Group, a Fairfax, Va.-based aerospace consulting firm.
At its peak, the A380 freighter program had orders for 27 of the planes from four customers, compared with 54 orders to date from seven customers for Boeing's 747-8 freighter, said Douglas Runte, an analyst at RBS Greenwich Capital. The 747-8 starts flight tests next year. "The market has spoken on which aircraft type makes a better large freighter," Runte said. "While Airbus might not formally cancel the freighter, the prospect for orders is growing even dimmer."