Rolls-Royce has lost jet engine orders worth £2.6bn after Emirates airline cancelled a planned purchase of 70 A350 aircraft from Airbus.
The Dubai-based airline had ordered the planes from Airbus in 2007, due for delivery in 2019.
Rolls-Royce is the sole manufacturer and supplier of the engines for the A350, seen as Airbus's answer to Boeing's Dreamliner.
The British engineering firm, which has bases in Derby and Bristol, said the cancellation would shave 3.5% from its order books, but was hopeful that other airlines would fill the delivery slots.
It had already warned of stalling profits and revenues due to defence spending cuts. Its shares fell 2.5% to £10.51 on news of the loss of the Emirates order.
Rolls-Royce said: "Demand for the Airbus A350 remains strong, with more than 700 aircraft and 1,400 Trent XWB engines already sold. We retain a close working relationship with Emirates and continue to support their 38 Rolls-Royce-powered wide body aircraft currently in service."
Emirates is by some distance the world's largest purchaser of Airbus's superjumbo, the A380, and retains a close relationship with the European manufacturer, ordering 50 more A380s at the last Dubai air show.
Airbus said the decision followed ongoing discussions as Emirates reviewed its fleet requirements.
It said: "Airbus and Emirates benefit from a long-standing relationship and the airline recently reiterated its confidence in Airbus products particularly by praising the A380 and the benefits the aircraft brings to their operations."
Airbus said it remained confident in its A350s, with 742 firm orders ahead of the plane's entry into service later this year.
