A big setback for Airbus with the cancellation by Dubai’s Emirates airline of its entire order for 70 A350 jets.

The European planemaker explained it by saying this followed a “fleet requirement review” at Emirates which is shifting towards the larger A380 superjumbo.

Airbus said it was disappointed, but also confident of filling the spare production slots and did not see any financial impact.

“It is not good news commmercially but not bad news financially,” Airbus sales chief John Leahy told reporters in Toulouse.

He also pointed out Boeing has had more cancellations for its 787 Dreamliner.

Engine maker Rolls-Royce said the cancellation would mean a 2.6 billion pound (3.21 billion euro) hit to its order book.

“While disappointed with this decision, we are confident that the delivery slots which start towards the end of this decade vacated by Emirates will be taken up by other airlines,” Rolls-Royce said in a statement.

Over-expansion?

“Emirates was one of the original customers interested in the programme, but always seemed rather critical of the aircraft specifications,” Cantor Fitzgerald Europe said in a note.

Aerospace industry analyst Nick Cunningham, managing partner at UK-base Agency Partners, said the move also posed questions over whether Middle Eastern carriers have over-expanded or are expecting lower growth than before.

Airbus and Boeing have dismissed warnings of a ‘bubble’ in commercial aircraft orders, which remained robust throughout the financial crisis, but some industry bankers say airlines have ordered too many aircraft despite growth in emerging markets.