By Tim Hepher
TOULOUSE, France (Reuters) - Europe's Airbus is scrapping production of the A380 superjumbo, with lacklustre sales forcing it to abandon a dream of dominating the skies with a 21st century cruiseliner.
The world's largest airliner, with two decks of spacious cabins and room for 544 people in standard layout, was designed to challenge Boeing's legendary 747 but failed to take hold as airlines backed a new generation of smaller, more nimble jets.
The move comes after Emirates - the largest A380 customer - was forced to reduce its orders for the iconic superjumbo after an engine dispute and a broader fleet review, opting to order a total of 70 of the smaller A350 and A330neo instead.
Without the anticipated level of demand from the Gulf heavyweight, Airbus said its assembly lines would dry up.
Airbus said it would enter talks with unions in coming weeks over the 3,000-3,500 jobs potentially affected. Enders later said the company could not guarantee all would keep their jobs.
Airbus took a charge of 463 million euros for shutdown costs, but is expected to be forgiven some 1 billion euros of outstanding European government loans under a funding system that stands at the centre of a trade dispute with Boeing.
Airbus shares rose 5 percent on investor relief that Airbus would close a long-running chapter of losses on the A380, also buoyed by stronger than expected 2018 results.
LEADING BUYER 'DISAPPOINTED'
"While we are disappointed to have to give up our order, and sad that the programme could not be sustained, we accept that this is the reality of the situation," he added.
The decision came after Emirates failed to reach an engine agreement with Britain's Rolls-Royce, which said on Thursday it noted the decision to shut down the programme.
The A380 will remain a pillar of the Emirates fleet well into the 2030s, the airline said.
Making its maiden flight in 2005, the A380 was a major step in Airbus's efforts to compete on equal terms with Boeing and challenge what had been a cash cow for its arch-rival.
"What we are seeing here is the end of the large four-engined aircraft," Enders said after halting the programme in his last major decision before stepping down in April.
"There has been speculation that we were 10 years too early; I think it is clear that we were 10 years too late," he added.
The prospect of a premature halt to A380 production emerged last month as part of a restructuring of Emirates orders first reported by Reuters.
On Wednesday, Reuters reported that Airbus was poised to axe the superjumbo.
(Reporting by Tim Hepher; Additional reporting by Alexander Cornwell; Editing by Alexander Smith and Keith Weir)
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