PUBLISHED: 14:31 GMT, 14 July 2014 | UPDATED: 22:28 GMT, 14 July 2014
The surprise decision by Airbus's largest customer to cancel all 70 A350s on order comes months before the long-haul jet is due to enter service and removes 9 percent of the order backlog for a plane which took eight years and $15 billion to develop.
Airbus said it was not worried about replacing the lost orders, with its top salesman saying some airlines had immediately expressed interest in buying some of the Emirates aircraft, the first of which was due to be delivered in 2019.
But shares fell as analysts told investors the move raised questions over aircraft demand, whether for the A350 itself or implying a more general wobble of confidence that could also hurt Airbus's main rival, the U.S. planemaker Boeing.
Shares in Airbus closed down 3.1 percent at 52.21 euros and Rolls-Royce, the sole engine supplier for the A350, fell 5.5 percent to 10.17 pounds.
Airbus acknowledged it was disappointed with losing the A350's joint second-largest customer, but said it did not see any financial impact and that flight tests were on track.
"It is not good news commercially but not bad news financially," Airbus sales chief John Leahy told reporters, adding the rival Boeing 787 had suffered more cancellations.
"There is certainly going to be no hole in production," Leahy said.
The A350 is Europe's first jetliner built mainly from advanced new materials and was designed to compete with two types of aircraft from Boeing - the lightweight mid-sized 787 Dreamliner and the larger but older 777 mini-jumbo.
Emirates was among the first buyers for the A350 when it placed the order for 50 A350-900s and 20 A350-1000s in 2007.
The deal was worth around $16 billion according to 2007 list prices, and would be worth close to $22 billion if placed now, although launch customers typically negotiate large discounts.
Airbus said it was not worried about replacing the lost order...
Airbus suffered an unexpected reversal for its newest aircraft on Wednesday when Dubai's Emirates scrapped a $16 billion order for the A350, hitting shares in the European planemaker and engine firm Rolls-Royce.