Emirates unsure on A380 deal amid concern Airbus could scrap jet

Emirates unsure on A380 deal amid concern Airbus could scrap jet

Emirates, the world’s biggest long-haul airline, is holding out for assurances about the future of Airbus' A380 program before committing to a US$8 billion order for more of the double-decker aircraft.

While Airbus is pushing for a deal at November’s air show in Dubai, where the carrier is based, concern that the value of used A380s will plummet if the slow-selling model is canceled represents a major sticking point, together with the proposed price, Tim Clark, the airline’s president, said in an interview Thursday.

“I know they would like us to do something,” Clark said in London. “At the moment we are not at that state of readiness. We need copper-bottomed undertakings that they would do everything they needed to do to keep the program going. We don’t want to be left with aircraft that have no value.”

Airbus announced in July that it will slash A380 production to eight jets a year in 2019, down from 15 this year and 28 in 2016, casting doubt over the model’s future.

That plan won’t change even if the Toulouse, France-based aircraft manufacturer gets another purchase contract before the end of this year, unless the number of planes bought is unexpectedly high, Chief Executive Officer Tom Enders said at the time.

Emirates is already the No. 1 superjumbo buyer, with 97 A380s in operation out of firm orders and commitments for more than 140 planes. The model has a list price of US$436.9 million, though key customers can get big discounts.

Airbus offered an enhanced 'plus' version of the A380 in June featuring fuel-saving winglets, which combined with an already-announced layout revision accommodating 80 more people would shave 13 percent from costs per seat.

Emirates is exploring the upgrade with a view to buying 20 more planes, though Clark – who originally campaigned for a more significant upgrade featuring new engines – has said he doesn’t need the extra capacity.

U.S. revival

Emirates also needs to consider how to deal with its oldest 25 A380s, which are due to be replaced by the last 25 planes of its existing order. It’s possible that the original airliners, some of which the carrier owns, may be retained to augment capacity, Clark said.

Airbus was already planning to slow A380 production to one aircraft a month as of May 2018. The reductions outlined in July mean that it is no longer breaking even on a per-plane basis.

Clark, who spoke at the 2017 Aviation Festival, said that Emirates plans to reverse reductions in U.S. capacity over the next six to nine months.

The airline cut flights earlier this year following a slump in demand linked to curbs that U.S. President Donald Trump’s administration imposed in response to concerns about terror threats and security standards at Middle Eastern airports. Traffic has now recovered almost to previous levels, Clark said.

“It has been a good story, a lot better than we thought it would be,” he said. “It has settled out now. People are getting used to the new protocols.”

Emirates aims to restore twice-daily flights to Boston, Los Angeles and Seattle and a daily service to Fort Lauderdale, Florida, Clark said.

The carrier has scaled back capacity through the early retirement of more than 60 aircraft, the executive said, with others used to increase offerings to destinations including the African cities of Lagos, Abuja and Luanda.

While U.S. carriers seeking to block Emirates’s expansion amid claims it has benefited from illegal state aid may have hoped that Trump would reignite an investigation of its funding, that appears not to be the case, the executive said.

“So far so good,” he said. “I believe the administration is not minded to take action against us for reason of all the other things that are going on in the White House at the moment.” He repeated denials that Emirates has received unfair subsidies.

 

13 comments

  • Nick  Sydney 348

    Nick Sydney 2

    8 Sep, 2017 03:52 pm

    The 3800 will be around for a long time; very nice aircraft to fly in.
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  • FLX

    FLX1

    12 Sep, 2017 01:26 pm

    @Nick Sydney 2:
    It will be....just like any other type with a reasonably large production run of say 100 units or more worldwide.  Owners always require a productive life span of @ least 15-20yrs and more commonly 20-25yrs fm each airframe delivered.

    Even the ultra-low volume Concorde was with us for a quarter century..
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  • Kin Ho

    KinHo

    8 Sep, 2017 04:56 pm

    Absolutely love the A380. Especially the upper-deck, which I find it's much quieter than the main-deck. And it's the most quiet cabin of any aircraft to date. 
    This is the only aircraft when I fly in, that I could be bothered to watch a movie, because I can listen to the audio properly without having to blast my eardrums off. 

    Please don't scrap/stop production of A380 entirely. 
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  • FLX

    FLX1

    12 Sep, 2017 01:57 pm

    @KinHo:
    "Please don't scrap/stop production of A380 entirely."
    Frankly, yr plead should be much more effective in fulfilling yr desire if revised & aimed @ airlines & lessors as something like the following:
    Please buy more 380.

    Airbus wouldn't be considering the possibility of(being done quietly within Airbus) ending 380 production if there's a good chance more can be sold within a reasonable time frame.

    Given that 1st delivery was only 10yrs ago and Airbus had invested astronomical $ for @ least 15yrs in 380 R&D fm early concept studies during its VLCT(i.e. Very Large Commercial Transport study which was supposed to be a JV between Airbus & Boeing to build a super jumbo...) days till 1st delivery to SQ in Oct 2007, Airbus obviously would want a bit more Return on Investment fm a lot more than just 317 untis sold today if they hv a choice.

    To put all these into perspective, 330 program was much cheaper than 380 for Airbus to develop yet 330 deliveries already lasted 23yrs and still hv enough order backlogs to sustain production for @ least 4 more yrs.
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  • Orus Picarous

    oruspicarous

    8 Sep, 2017 06:43 pm

    Seems like both are counting on the other. Airbus wants EK to buy more 380s, but EK won't buy them unless Airbus doesn't end the program. 
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  • Geoff Herbert

    james vvvv

    8 Sep, 2017 07:34 pm

    This baby is capable of real improvements to engines and layout also ventilation. It could become the preferred ride ahead of the underwhelming A350-900 series
    .
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  • Geoff Herbert

    james vvvv

    8 Sep, 2017 07:39 pm

    This baby is capable of real improvements to engines and layout also ventilation. It could become the preferred ride ahead of the underwhelming A350-900 series
    .
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  • FLX

    FLX1

    12 Sep, 2017 02:06 pm

    @james vvvv:
    "This baby is capable of real improvements to...could become the preferred ride ahead of..."
    As key factors for Airbus to consider continuation or termination of 380 production, whether it is the "preferred ride" by even trillions of pax commented on thousands of traveler review websites absolutely pale against whether it is the 'preferred buy' for airlines & lessors.

    I'm expecting 100 or more 'dislike' fm readers here for the comment I hv just made....bring them on.
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  • loopflyer

    loopflyer

    10 Sep, 2017 03:21 pm

    Sad. The A380 is one of the best aircraft to have been built. It is very quiet, very! Add in the better cabin air circulation.  There's nothing quite like flying first class in the A380, true luxury in space and comfort. That makes for a more restful flight especially on long hauls. I wish U.S. carriers had purchased this fantastic aircraft along with LATAM.
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  • bsb

    bsb

    10 Sep, 2017 03:51 pm

    I much prefer the 787 and 350.  Not sure why Y is like, but for J, the 380 isn't as nice in my book
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  • Kin Ho

    KinHo

    10 Sep, 2017 11:08 pm

    How good any class in an aircraft is, depends on what the airline fit it with. But in terms of the cabin noise level of the engine, A380 is the most quiet by far. 
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  • FLX

    FLX1

    12 Sep, 2017 02:30 pm

    @KinHo:
    "How good any class in an aircraft is, depends on what the airline fit it with."
    This is generally the only truth I hope more folks will eventually realize before they jump to conclude X airplane type is always more comfortable than Y airplane type in their comments....

    "A380 is the most quiet by far."
    Unfortunately, the fact that 380 generating lower cabin noise level than all other types for 10yrs apparently has not been translating into sufficiently higher profitability for airlines to justify buying more 380.....hence Airbus vs EK is facing the dilemma of 380 production termination now.
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  • FLX

    FLX1

    12 Sep, 2017 02:16 pm

    @bsb:
    "for J, the 380 isn't as nice in my book."
    Probably due to the fact that any J in 787 or 350 is on the main deck while almost all 380 operators installed J on the upper deck.

    In similar 1-2-1 abreast seat layout across all 3 cabins, a J seat on the 380 upper deck cabin(diameter similar to but with lower ceiling than 330) obviously feels tighter than 1 on the main decks of 787/350.
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17 Jul, 2019 01:01 pm

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