Airbus's Guarantee to A340 Buyers Could Cost It $2 Billion

Two years ago, Airbus stopped manufacturing its A340 passenger jet, a four-engine widebody suited to flying extra-long routes including Los Angeles to Singapore. While the production line is a memory, there’s one thing that can’t be forgotten: promises the aerospace giant made to many buyers that the jets would hold their value or it would make up the difference. Now, after watching prices of used A340s slide for years, Airbus is scrambling to persuade customers they didn’t buy a white elephant.

At a Dec. 4 meeting in London for airline and aircraft-leasing company representatives, the European planemaker floated a plan to boost the seat count of existing A340s by 8 percent and lower maintenance expenses to improve the plane’s economics—and raise its resale value. Demand for the A340, introduced in 1993, dried up as oil prices soared and aircraft makers introduced more energy-efficient two-engine models capable of flying transoceanic routes that once required four engines. Richard Branson’s Virgin Atlantic Airways, after launching the most recent version of the A340 in 2002 at a splashy London ceremony with supermodel Claudia Schiffer, quietly retired the plane last year.