Concerns about the Future of the A380.

Implications: Losses of Virgin and FedEx highlight difficult challenges for Airbus.

Cargo is growing faster than passenger traffic and the loss of 10 orders from FedEx brings uncertainty to the suitability for the cargo industry.

Boeing's 777 and 787 will likely gain market share as a result until the issue is successfully resolved.

Analysis: Just when it seemed that the difficulties at Airbus were at a low point, the recent loss of orders from FedEx and Virgin Atlantic highlight just how serious the issues have become.

Having major orders for both passenger and cargo aircraft was an ideal market position for Airbus.  Since cargo is growing more rapidly that passenger travel, the cargo market was a key sales win for the company.  UPS remains a customer, but it will be interesting to see if they also cancel their order for 10 aircraft.  That could make it very difficulty for the company to achieve profitability on the cargo version of the aircraft. 

Moreover, the loss of Virgin adds complications for the passenger version of the aircraft.  If other carriers follow, it will be very difficult to regain momentum for selling the huge plane.

This certainly bodes well for Boeing, at least in the near term.  However, the size and operating efficiency of the A380 are compelling especially given the projected strong increases in international transportation - both passenger and cargo. 

If the hurdles can be overcome quickly, the company can likely recover.  However, if the challenges become increasingly difficult to overcome, it will be very hard to regain enthusiasm for the aircraft and the future of Airbus will be in doubt.