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US firm may cancel Airbus orders

BERLIN, June 8 – The US aircraft leasing company ILFC may cancel its orders for 10 Airbus A380 superjumbo jets because clients\’ interest in the huge plane has waned, its boss said in comments published on Monday.

"We are asking ourselves if we are really going to take delivery of the 10 planes" on order, Steven Udvar-Hazy told the the business weekly Wirtschaftswoche in comments published in its online edition.

A cancellation would be the first for the A380, the world\’s largest passenger jet.

"We can cancel our order without penalty between January and June 2009, but we might also postpone deliveries or replace the A380 with another plane," Udvar-Hazy added.

At catalogue prices, ILFC\’s order was worth around three billion euros (4.2 billion dollars), the magazine noted.

Large airplane orders almost inevitably result in discounts, however.

The leasing giant has noticed "an important change in attitude by airlines regarding the A380" and found that "interest is weaker than expected in particular among the Chinese," Udvar-Hazy was quoted as saying.

Such a huge plane, which can carry up to 853 passengers, cannot operate on as many lines as expected, and is expensive for leasing companies owing to costs involved in making modifications for different clients.

"If I were Airbus I would be very worried," said the boss of ILFC, a unit of US insurance group AIG, which was recently nationalised to prevent its bankruptcy.

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"At current production rhythms, it will be very hard to make money with this plane," he said.

The first carrier to operate the A380, Singapore Airlines, said in late March that it would receive four of the planes this year as planned, but could not rule out deferring future deliveries as passenger and cargo volumes fell.

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