Emirates breaks Airbus A380 order drought

Emirates Airbus A380 A6-EUA at Melbourne on January 10 2018. (Victor Pody)
Emirates Airbus A380 A6-EUA at Melbourne on January 10 2018. (Victor Pody)

Emirates Airline has broken the Airbus A380 order drought with a Memorandum of Understanding (MoU) to purchase up to 36 of the world’s largest passenger aircraft.

The MoU, signed in Dubai on Thursday (UAE time) by Emirates chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum and Airbus Commercial Aircraft chief operating officer for customers John Leahy, includes a firm order for 20 A380s and options for 16 more, the pair said in a joint statement. The aircraft will be delivered from 2020.

The deal also ends a 21-month period without any A380 orders and offers the program a significant boost just three days after Leahy publicly canvassed the possibility of shutting down the A380 production line should Emirates, the world’s biggest customer of the type with close to half the total order book, not order any more A380s.

Emirates chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum and Airbus Commercial Aircraft chief operating officer for customers John Leahy. (Airbus/Emirates)
Emirates chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum and Airbus Commercial Aircraft chief operating officer for customers John Leahy. (Airbus/Emirates)

Sheikh Ahmed said the A380 had proven to be a customer favourite in the Emirates network.

“We’ve been able to deploy it on different missions across our network, giving us flexibility in terms of range and passenger mix,” Sheikh Ahmed said.

“Some of the new A380s we’ve just ordered will be used as fleet replacements. This order will provide stability to the A380 production line.”

Sheikh Ahmed said Emirates would continue to work closely with Airbus to “further enhance the aircraft and onboard product”.

At the Paris Airshow in June 2017, Airbus presented an updated version of the A380 featuring new fuel saving winglets in what was the latest initiative to help improve the aircraft’s operating economics and perhaps attract new orders for the program.

Packaged together and called A380plus, the initiatives included including extending maintenance intervals, aerodynamic changes to the wing and previously announced “cabin enablers” to add more seats.

The A380 order book stood at 317 at the end of December 2017, with 222 aircraft delivered and a backlog of 95.

Prior to this new order, Emirates had 101 A380s in its fleet and firm orders for 41 more. The next largest operator is Singapore Airlines (SIA), which has 19 A380s, followed by Lufthansa with 14. British Airways and Qantas are next with 12 each.

Leahy said the Emirates MoU ensured the A380 would remain in production for the next two decades.

“This new order underscores Airbus’ commitment to produce the A380 at least for another 10 years,” Leahy said.

“I’m personally convinced more orders will follow Emirates’ example and that this great aircraft will be built well into the 2030s.”

The world’s largest passenger aircraft has struggled for sales in recent years, with carriers preferring twin-engine variants to serve their long-haul routes.

In light of the weakness in the very large passenger aircraft market, Airbus chief operating officer and Commercial Aircraft president Fabrice Bregier said on Monday the company planned to slow the production rate of the A380 from 15 aircraft delivered in 2017 to a projected 12 aircraft in 2018 and just eight in 2019.

Further, Bregier acknowledged there was a commercial challenge around the A380, noting an internal Airbus analysis of the program’s supply chain determined that there needed to be a “minimum of six aircraft a year to maintain industrially an efficient production line”.

“I can confirm today that we can have an industrially robust process to deliver down to six aircraft a year,” Bregier said during Airbus’s 2017 orders and deliveries announcement on Monday.

“The challenge will be for us to maintain at least this level of industrial output in the years to come before taking advantage of the replacement of the A380s and potentially new markets.

“I am not pleased with the ramp down but this is controlled.”

Airbus had been hoping to secure a top-up order of A380s at the Dubai Airshow in November 2017. However, the airshow came and went without Emirates putting pen to paper.

Leahy has said on Monday that if a deal with Emirates could not be worked out there would be “no choice but to shut down the program”.

Comments

  1. Lechuga says

    They’re dreaming if they think it’ll pick up in 10 years without Neos being announced in the next 3-4. 777X would blitz this market by then.

  2. Patrickk says

    I am sure a NEO will be developed; it is just that Rolls Royce has to do more work on the Advance engine for it to be ready for an A380 early to mid 2020s. EK likes the A380 as it works better in hot conditions.

  3. Lechuga says

    777 sales are currently slow, but there’s a much bigger market for 777s than A380s & in 10 years time it would have a lot more order than the A380 ever had, simply because it carries as many people as the 747 and runs on 2 really efficient engines.

    A380, which I love as a plane would need a neo and a -900 variant. Just for Emirates and China to carry people.

  4. Geoff says

    How much knowledge do you have to underpin your statement Lechuga?

    “Just wait and see”, said the wise man.

  5. Geoff says

    The “sweet spot” for the A380 will be a -900 with upgraded engines. Remember the current version (-800), is an over-winged pre stretch model and thus has a slight seat/mile cost disadvantage.

    As the world becomes more urbanised and traffic doubles in 15 years from now, both A380 and 777-9 will feature handsomely. Also remember that new Airport project development is lagging traffic growth curves.

    All the more reason the VLA market will thrive. It is just at the toe of the curve now, as far as new growth is concerned.

  6. Raymond says

    Increased traffic / pax together with increasingly limited airport slots = greater demand for VLA.

    Airbus, now that A380 production is bedded down, the next step is to develop that A380-900neo.

  7. Scott says

    The old saying “don’t put all your eggs in one basket” will ring true here. Without Emirates this airframe is in terminal decline. Even with this order end of line carriers will prefer sub 300 seat airframes to fill and make money as more and more mid market airlines (geography wise) come on line and take a share of he market.

  8. LionelMessi says

    So as a hub airline that most travellers won’t have any need to stop in with the rapidly increasing range of new aircraft types on the horizon, diminishing oil reserves, nothing really of any interest (with respect) in Dubai worth visiting, and as the only real user of this aircraft type, Emirates, Dubai and the A380 saga may all be over before they want it to…..and Mr Shiek Ahmed will be acutely aware of it. It’ll either save em, or it’ll be a complete disaster.

  9. That Ron guy says

    Unlike all the armchair experts giving their predictions here, I’m just really glad the bigbus is still going to be in production & service for years to come. The order is a fitting end to John Leahy’s 33 years of dedication to Airbus & relentless commitment to the A380 (not bad for an American), who I understand is retiring in literally the next few days. Well done sir, we salute you.

  10. Dassa says

    I am happy to see Emirates threw a lifeline for the a380 aircraft more than I can say about qantas only looking for big profit for the share holders and when something breaks down they don’t have back up I will never fly with qantas yes they are safe but the management still treating there staff like shit I have had a great support for Emirates I don’t know why Singapore Airlines don’t buy more a380

  11. GAGA says

    You could be right Geoff but the oversized wing isn’t necessarily the source of the seat/mile cost problem of the -800.

    Right from initial development I could see the problem when they put forward one of their big marketing pitches:

    “50% more floor space but only 30% more seats compared to 747-400”.

    Absolute stupidity. Of course it has a seat/mile disadvantage and that’s even before you consider that the 787 is a generation ahead in both airframe/wing and engine tech.

    With the margins so tight in the Airline industry, how on earth could it possibly be competitive when they’re pretty much throwing 20% of he aircraft down the drain?

    50% more floor space should equal 50% more seats. The Plus version might fix this problem but it might be a case of too little too late.

  12. Charles says

    I agree with The Ron Guy, a lot of people will be glad to see the A380 around for many years to come and search out A380’s when planning their trips overseas.

    Brisbane to Manchester via Dubai, 24 hrs travel time, comfortable (economy) seat and good food, the only way to go!!

  13. Patrickk says

    Lionel, perhaps your analysis is correct but do note Dubai is a trading hub. It is the one Emirates without any oil. I think it will be continue to be an airline hub as much of its traffic is from South Asia with very poor aviation capacity, and unlikely to improve. 777s into Dubai from South Asia feeding A380s to elsewhere. A good business model.

  14. John Reid says

    When the engine manufacturers are ready with a New Engine, I wonder how an A380-800neo would stack up against Project Sunrise requirements? Yes, it’s big, but I for one would find it more attractive for a non-stop SYD-LHR than a Dreamliner.

  15. Donald says

    To me this just proves to rekindle my hope for some final orders for the 747-8i. Beautiful bird, would be great to see her fly once more.

  16. Patrickk says

    John I suspect the new engine will only be enough for DFW with a full load. It will be more fuel efficient though.

  17. Patrickk says

    GAGA it is the airlines that determine seat numbers. They could go to 800 if they wish. EK has 600 on some layouts. Your analysis is correct but the reason is not to do with Airbus but the airlines who sell it as a premium product, thus fewer seats.

  18. Stephen Boyce says

    hello I was reading an article that British airways might be ordering some airbus a380 to replace their boeing 747-400 and i hope BA also order boeing 777-9 as well to replace their boeing 747-400

  19. GAGA says

    Patrickk, I’m fairly sure that is only in the areas that Airbus designed to have seats. When I look at the A380, there always seem to be areas not designed for seating that have been wasted.

    Look around the front of the plane in particular. There’s a fair distance between where the seats stop and where the front of the plane actually is. The staircase is too wide (why does it need to be any wider than the aisle?) and the position of the cockpit means it takes up the space of two floors instead of one.

    You can see the wasted space on some A380s. beside and forward of the staircase upstairs. Some airlines now have a few random, inwards facing sofas in the windowless space there. I believe Emirates also uses it for showers and Ethiad uses it for their “residence”. The A380 should’ve had windows all along there, a narrower staircase and several extra rows of revenue seats. I don’t think it’d be easy for airlines to add more revenue seats in this area as changing the stairs, replacing the floor and cutting windows is not going to be easy. Perhaps there is also a design issue with evacuation in this area also.

    Compare it to the front of the 747 which has seats going all the way to the front downstairs with windows, stairs the width of the aisle not twice as wide and the cockpit taking up only one floor not two.

  20. Max says

    Hope the A380 is still around for a long time. It is by far the most comfortable way to fly long diatances in economy class (though some airlines are better than others here).

  21. PAUL says

    Good on Emirates, I like the A380 it cruises higher & faster at 41000 feet & 600mph, makes for a quicker more comfortable ride with plenty of room. Maybe AirNZ should buy some for long haul routes & peak season travel. They don’t have any more Jumbos to fill that niche…

  22. Brad says

    GAGA, the layout of a 747 with the lower deck seats going to the nose is unable to be replicated on any aircraft going forward as it is no longer a legal design feature. The only reason it remains on the 748 is grandfathering of certification.

  23. Corey says

    I really don’t get why Emirates won’t buy the 747-8i. They have the range and seat capacity, cargo capacity and they’re more cost-effective than an A380 or 747-400. Heck if Qantas where smart they’d buy a fleet of 10 747-8i ER which would give it a range of about 8700-8800nm with 450 passengers. It would give Qantas the project Sunrise right now allowing BNE, SYD and MEL to JFK and LHR non-stop. Heck if they put the new 787 seating in it they could get close to 460-470 passengers in a 3 class layout. There is no real need for First Class these days on most flights. Having 4 engines has it’s pluses because they’re not constrained by etops there for can take the most efficient and direct route. A 747-8i ER would have either 2 3300 gallon auxiliary tanks as found in the 400ER. Also with another engine PIP from GE and further weight reduction from Boeing and the 787 lightweight seats it’s more than possible to get them up to the 9200nm required.

  24. Keith says

    I think that the only thing that could save the A 380 is the tightening restrictions of slots at the top 30 plus airports. Maybe in ten years time this aircraft will become popular with airlines who need the A380 capacity to get the most passengers into airports where they only have a few slots allocated. I enjoy flying on this aircraft and it would be a shame if production stopped.

  25. Geoff says

    Keith and others,

    As I have said previously, it is still the beginning for the wonderful A380 (the real passenger Dreamliner!).

    In “the customer is always right”, school of thought, which makes good business sense to a high degree, the A380 is THE most desirable and spacious air transport vehicle and this has been proven time and again. Emirates are right, hence their tremendous success.

    You will find a flurry of orders shortly that have been pending for some time (forget the media speculation about its demise, which is typically distracting stuff). British Airways are set for a further 10 or more. Don’t ignore Turkish, Iberia, Cathay or the big Chinese airlines as traffic soars in the next decade. Collectively, there are 200+ orders with those aforementioned airlines alone. The world market for the VLA is about 1150 units.

    Keith, this is the aircraft to alleviate slot issues at the major airports. These issues will be addressed with the mighty A380, especially the -900 neo in due course. This will be the sweetspot vehicle.

    Just wait and see.

  26. Peter says

    Airbus now say the EK order is only for 20 x A380’s, not 36. The difference of 16 are options.

  27. ESLowe says

    My comment about the a380 is: is the plane “out of its commercial timeframe.” I mean the Boeing 757 and 717 went out of production through lack of demand, but because of changing circumstances these aircraft are highly sought after. So I’m wondering, if the Boom 45 seater Mach 2.2 jetliner takes the big ticket, Business class market away from subsonic planes (at the same ticket price),will Airbus push ahead with the a380-1000? This plane could carry a 1000 economy and premium-economy passenger mix.. I know that the big twins are all the rage but will 1000 passengers justify the purchase of four engine aircraft?,

  28. Ken Hambleton says

    I am so pleased about Emirates buying more A380’s, just love flying on this aircraft.
    Hate the 777 flown on a few of them but are very noisy even in business class.
    Also flew to Japan last November with JAL 787, excellent service but still a noisy aircraft.
    Also for a piece of mind I simply prefer 4 engines on long haul’s. and I AM PREPARED TO PAY EXTRA
    TO FLY ON A A380.
    But for sheer joy it was back in 1971 when I flew with BOAC super VC10 Flight 591-592 Melbourne to New York and return what a fantastic aircraft, yes it was hash power all the way.

    Ken.

  29. Dave Tonks says

    Loved your comments, Ken – I don’t give a fat rats rectum what is painted on the tail – I just want a comfortable seat at a reasonable price, and like Ken, I am happy to pay extra for it.

    One thing is for sure – I will NEVER fly Jetstar again – I know I’m carrying a little around the waist but for me not to be able to get my fold down table flat……that is cattle class at it’s absolute worst.

    BP

  30. PAUL says

    The VC10 was a great machine which is why the RAF flew them for so long & probably to look after the careers of their Air Engineers. I also like the 747-8i using the new GenX engines & wing technology from the 787. Qantas & AirNZ should also look at these great Aircraft.

  31. Craigy says

    @ Stephen Boyce

    Willie Walsh has indicated that BA would like more A380 but will not be buying new because of the cost. I think I read somewhere that BA are a likely customer for the 4 or so A380s’ Singapore Airlines have returned to the lessor.

  32. mike9 says

    Live and work in Shenzhen. , Slot restrictions are in place right now. forget about trying to get a route into Guangzhou, Shanghai, Hong Kong, Beijing. and other cities. to keep up with passenger growth in China there is no other option but to buy VLA like the a380. China Southern now flies into Sydney daily with A 380’s .
    the growth out of China is expected to increase by around 11 % per year.
    It doesn’t matter where they fly to, one aircraft, one slot, as many people as possible on board . The Chinese are seriously looking at orders from Airbus , I am referencing China daily and other Chinese news outlets.

  33. Geoff says

    keep referencing mike9. You are right. There are another five million economically active Chinese people each year looking to go beyond their backyard.

    China Southern and China Eastern are very serious about orders as slot constraints dictate.