Hammerblow for Airbus

At the end of a turbulent week for Airbus, US-based freight group UPS heaped more misery on the company on Friday by canceling an order for 10 Airbus A380 superjumbo freighters because of delivery delays.

The announcement added to the woes of the European consortium and appeared to end plans, for now, for a cargo version of the giant Airbus plane, which will be the world's biggest airliner.

UPS, ending weeks of speculation, said a final cancellation decision will be formally presented to Airbus on the first date allowed under an agreement reached last week that gives either party the right to terminate the order.

UPS was last remaining customer

The US company was the sole remaining customer for the cargo version of Airbus' enormous new plane, whose troubled development has caused much turmoil in Europe.

Last week's agreement called for a revised delivery schedule that delayed UPS' first A380 jumbo freighter from 2010 to 2012. UPS originally expected its first freighter in 2009.

UPS said it had intended to complete an internal study of whether it could wait until 2012 for the aircraft, "but now understands Airbus is diverting employees from the A380 freighter program to work on the passenger version of the plane," a company statement said.

"Based on our previous discussions, we had felt that 2012 was a reasonable estimate of when Airbus could supply this plane," said David Abney, UPS' chief operating officer and president of UPS Airline.

"We no longer are confident that Airbus can adhere to that schedule. UPS has built one of the largest airlines in the world in order to ensure reliable service to our customers, and we're confident we have the resources to continue doing so in the future."

On February 5, UPS announced a multibillion-dollar order for 27 Boeing 767 freighter planes, and said the A380 order was subject to an "ongoing review."

Deliveries of UPS' A380s were originally scheduled to begin in 2009 and run through 2012. But Airbus has suffered repeated delays on the project and earlier this week said it was suspending work on the cargo version due to order cancellations.

The US freight and messenger service FedEx scrapped its order for 10 A380F cargo planes in November after Airbus announced a two-year delay in deliveries. International Lease Finance Corp. (ILFC), which handles aircraft leases, cancelled its order for five cargo planes and chose instead five passenger jets.

Airbus faces more turmoil

This week, Airbus announced 10,000 job cuts and a timetable for slashing its factory network, in a bid to solve the crisis caused mainly by problems with its A380 superjumbo jet. Airbus is to cut 4,300 jobs in France, 3,700 in Germany, 1,600 in Britain and 400 in Spain over the next four years.

Deliveries of the passenger version of the giant plane are now two years behind schedule, putting a severe strain on Airbus' finances and damaging the company's reputation among clients and investors.

Airbus is expected to report an operating loss for 2006, a sharp turnaround in its fortunes after years of bumper profits.

Under the major reorganization announced on Wednesday, Airbus is to sell off several factories and make greater use of sub-contractors.

The moves have sparked calls for strikes and prompted political leaders in Europe to question the structure of Airbus' parent, the

European Aeronautic Defence and Space Company (EADS).