ILFC may clip Airbus wings, dump deals worth over $5bn

LONDON: The biggest aircraft leasing firm, International Lease Finance (ILFC), has warned that it may cancel deals to buy the Airbus A380 superjumbo and the planned A350 model, contracts worth more than $5bn at list prices.

“We could cancel and are considering cancelling all or some of our A380 orders ... We are not happy and on safe ground to cancel the order,” ILFC chief executive officer Steven Udvar-Hazy said.

A delay of up to seven months for the A380 announced last week and blamed on wiring complications has angered customers, sparking calls for compensation and warnings that some might rethink their orders.

Udvar-Hazy urged Airbus to settle on a design for the planned A350 model by next month, when the biennial Farnborough air show, one of the industry's largest, opens near London on July 17.

“We are putting a lot of pressure on them to fix the 350 ...If they don't gain credibility by the air show, we’ve got serious problems about taking the A350. They have a month to fix this,” he said.

An Airbus spokeswoman said she had “no information” about any plans by ILFC to change its orders.

ILFC is the aircraft leasing arm of insurance giant American International Group.

It has ordered 10 A380 superjumbos, which carry a list price of $300m each. The Airbus website shows ILFC has committed to 16 of the mid-sized A350, a model which the planemaker is working to redesign to compete better with rival Boeing Co’s 787. The Boeing model is due in ‘08 and the Airbus is expected around ‘12.