Rolls-Royce is set to take a multi-billion pound hit after Dubai's Emirates Airlines cancelled an order for 70 Airbus A350s in an unexpected blow for the jet engine maker.
Shares in Rolls-Royce, which makes engines for the aircraft, fell 2 per cent in early trading as the City digested the news. The loss of the contract will result in a £2.6 billion reduction in its order book.
Emirates placed the order as part of a wider deal with Airbus in 2007, with deliveries due from 2019, but cancelled citing "on-going discussions with the airline in light of their fleet requirement review".
Rolls-Royce said it was "disappointed", but remains "confident" that the delivery spot vacated by Emirates will be taken up by another airline. The jet engine maker insisted that the interest in the A350 has always been "very high" with more than 700 aircraft and 1,400 Trent XWB engines already sold.
Last February, Rolls-Royce stunned investors after it warned that decade of profit growth would come to a shuddering halt this year, citing defence budget cuts and the completion of export programmes to the Middle East and India.