UPS, Airbus agree to let either party void jet order

United Parcel Service and Airbus agreed that either company can cancel an order this year for 10 A380 freighters after repeated production delays.

UPS, the world's largest package shipper, will decide whether to retain the $2.8 billion order after getting new delivery dates from the plane maker, UPS spokesman Mark Giuffre said Friday. 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.

Airbus' development of the superjumbo A380 has been delayed at least two years because of the complexity of installing wiring.

The UPS-Airbus accord came after months of talks triggered last year when Toulouse, France-based Airbus said UPS' first A380 delivery would be delayed at least eight months. UPS placed its order in 2005 and originally was to receive 10 A380s from 2009 through 2012.

FedEx canceled its 2002 order for 10 A380 freighters in November.