Airbus aimed to tally 25 new orders in 2013 for its largest aircraft, the A380. But after one high-profile cancellation, Airbus now has three fewer orders than at the beginning of the year. Could this be the beginning of a trend?

The A380 has been selling slowly for some time, which Airbus has attributed to the sluggish world economy. While that is certainly a factor, Lufthansa's decision to reduce its firm orders to 14 from 17 raises more questions.

The airline's move is part of its long-term planning process, which aims for 3% annual growth. The carrier also placed orders for 25 Airbus A350-900s and 34 Boeing 777-9Xs. Lufthansa's senior vice president for corporate fleets, Nico Buchholz, says the original order for the A380 was placed more than 10 years ago and has just now been adapted. The airline concludes that it needs fewer aircraft in the very large segment than originally envisaged.

Lufthansa is still one of the largest operators in the segment, with orders for 14 A380s and 747-8s and a current in-service fleet of 23 747-400s, which will be replaced over time. In addition, Buchholz points out that there will always be routes such as Frankfurt-Johannesburg that are too big to be flown with smaller jets.

However, the major shift toward larger jets long predicted by Airbus has not happened yet. And the manufacturer is making the move tougher for airlines by offering highly efficient twin jets. Chief operating officer for customers, John Leahy, says airlines would have to install 550-560 seats in an A380 for the aircraft to match the unit costs of the A350-1000 that will enter the market in 2017. In other words, essentially all current operators are flying the aircraft in configurations that are much less attractive in terms of unit costs.

Leahy characterizes the Lufthansa decision as a “flavour du jour.” “Let's see what the market is like in one or two years,” he says. While Airbus is talking to several airlines about firming up positions for the A380 before year-end, it has not received a single firm order for the type this year, according to Leahy.

Doric Asset Finance signed up for 20 A380s at the Paris air show in June, and although that has not been turned into an actual order, Leahy says there is a chance the deal can be completed in 2013. He does not see Airbus competing for A380 placements with Doric, which is the only lessor with a commitment for the aircraft.

Aside from the Lufthansa reduction, several more of the 259 firm orders for the A380 are looking shaky. Leahy says “it is publicly known” that Virgin Atlantic's order for six A380s includes cancellation rights, and the airline has indicated many times that it is unlikely to take the aircraft. He also indicates that Hong Kong Airlines, with 10 A380s on order, might “convert” its commitment to “other products.” Kingfisher Airlines is still listed with five orders, although it stopped flying in 2012.

And there are serious doubts that Air Austral will take its two A380s that were intended to fly between Paris and the French overseas departments in a very high-density configuration. Air France has delayed some of its A380 deliveries as it continues its restructuring program and cuts back on capital expenditures.

Airbus still has “a couple of slots” open for the A380 in 2015, but those can only be taken by airlines that already operate the type. The Lufthansa cancellation affects production slots beyond 2015, thus it does not worsen Airbus's short-term manufacturing problem. But if the aircraft maker does not find airlines to take those slots soon, it will have to cut back on production.