Iran drops plan to buy Airbus superjumbo

Airbus CEO upbeat on future of A380
Airbus CEO upbeat on future of A380

Iran has ditched the A380.

State-owned Iran Air said it would not be ordering the twin-deck A380 aircraft from Airbus (EADSF) as part of a plan to renew its fleet, according to state news agency IRNA.

"The initial value of the deal with Airbus was $25 billion for 118 planes, and now that the A380 has been canceled the value of the deal will not go beyond $10 billion," Iran Air CEO Farhad Parvaresh said Sunday, according to semi-official news agency Mehr.

Parvaresh said he expects Airbus will deliver seven or eight planes to Iran in 2017.

Iran had agreed to buy 12 A380 aircraft after sanctions were lifted in January. The order was seen as crucial for the future of the wide-body aircraft, which has struggled to find buyers.

Airbus declined to comment on Iran's decision to drop the A380, saying that the deal was still being finalized.

Iran finalized a similar deal with Boeing earlier this month. Boeing (BA) agreed to sell 80 airplanes to Iran Air, despite criticism from many U.S. lawmakers, including President-elect Donald Trump.

Related: Airbus cuts production of A380 super jumbo

Airbus has already said it would scale back production of the A380 starting next year. It will build only 20 in 2017, and only 12 per year from 2018. That's down from 27 it delivered in 2015.

There are 200 of the aircraft in use around the world, with 119 more orders lined up. That's way below the 1,200 orders Airbus said it expected when the aircraft was introduced in 2005.

Airbus has secured orders for just two A380 aircraft (from Emirates) so far this year. But it also had another order for two aircraft canceled, bringing the net number this year to zero.

The A380 was designed to challenge Boeing in the super large aircraft market. But many airlines are now moving towards more fuel efficient planes, rather than super large aircraft.

-- Alireza Hajihosseini and Zahraa Alkhalisi contributed reporting.

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