Emirates holds the key to Airbus’s A380 future: Leahy

An Emirates A380, soon to be seen at Perth Airport. (Emirates)
Emirates is the largest A380 operator in the world.

Airbus’s A380 future hinges on an order from Emirates Airline, the aerospace manufacturer’s chief operating officer for customers John Leahy says.

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.

From a total order book of 317 aircraft, Airbus has delivered 222 A380s since launch customer Singapore Airlines (SIA) picked up the first of the type in 2007. The backlog sits at 95 aircraft, as at the end of December 2017.

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 said talks between Airbus and Emirates – the world’s largest operator of the A380 having recently picked up its 100th of the type – regarding an order for more was ongoing.

“Quite honestly if we can’t work out a deal with Emirates I think there is no choice but to shut down the program,” Leahy told reporters during Airbus’s 2017 orders and deliveries announcement on Monday (European time).

“But I am hopeful that we will work out a deal with Emirates and others can add airplanes on top of that.”

An April 2015 image of Emirates Airbus A380 A6-EEF taking off from Sydney Airport. (Seth Jaworski)
An Emirates Airbus A380 departs Sydney Airport, with a Qantas A380 in the background.  (Seth Jaworski)

In light of the weakness in the very large passenger aircraft market, Airbus chief operating officer and Commercial Aircraft president Fabrice Bregier said 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.

“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.

“We will never produce white tails clearly but there are other potential customers beyond Emirates. It is clear that Emirates is key for the long term future of this program.

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

Leahy added Emirates was “probably the only one who has the ability right now in the marketplace to take a minimum of six a year for a period of eight to 10 years”.

The comments regarding the A380 program were made on the day Airbus reported it had delivered 718 aircraft in calendar 2017, a four per cent increase from 688 aircraft delivered in the prior year.

Airbus delivered 718 aircraft in calendar 2017. (Airbus)
Airbus delivered 718 aircraft in calendar 2017. (Airbus)

It was also the 15th consecutive year of increased production.

Meanwhile, Airbus said it secured 1,109 net orders in 2017, representing a a book-to-bill ratio of 1.5 and a 52 per cent increase from the 731 net orders in 2016.

Looking ahead, Bregier said Airbus’s A320ceo/neo program was on track to reach 60 aircraft deliveries a month by mid-2019.

Similarly, the A350 program was forecast to increase production to 10 aircraft a month by the end of 2018.

Bregier said 2017 was a challenging year for programs such as the A320neo and A350 XWB which faced supplier issues that affected deliveries to customers.

“At the end of the day what counts is the results and I am very pleased to say that we met our targets and 2017 again demonstrates an additional ramp up in deliveries and production,” Bregier said.

“I think 2018 will see a further ramp up of our deliveries.”

An Airbus infographic of the highlights for 2017. (Airbus)
An Airbus infographic of the highlights for 2017. (Airbus)

Earlier in January, Boeing announced it delivered 763 aircraft in calendar 2017, an increase of 15 aircraft from the prior year and within its previously announced guidance of 760-765 deliveries.

Comments

  1. Lechuga says

    I seem to remember one of them saying they expect the VLA market to grow again in a couple years once airlines realise they can’t get more aircraft into already slot contrainted airports. But for that to happen I think airbus either need to develop a very large twin jet or develop an A380neo that Emirates really want.

  2. john doutch says

    So ek has 100 delivered out of 222. nearly 50%. I remember another ac manufacturer suggesting it was a loss making exercise and it appears to be right.

  3. deano says

    Perhaps the VLA market needs a tri-jet instead of a quad
    The third engine could resemble that of a 727 or tristar rather than a DC10 and be used for take off and landings and the inlet could be shut down and tuck away during cruise to reduce drag
    Surely this could power an aircraft the size of a 747-8 and could even be just what the doctor ordered for the Qantas sunrise project

  4. Lechuga says

    @Raymond the Plus won’t do. It’s just cramming more people into the same plane with winglets. Emirates want new engines and efficiency for its 4 engine planes. Same aircraft with more people.

    For the aircraft to survive it needs a Neo and possible even a -900 variant.

  5. Roger says

    I can’t see Emirates ordering more A380s. i can see Dubai slowing as a hub in the future. Also, Emirates has a large order of 777Xs and 787-10s. Perhaps, like Qantas is bound to, they will become a Boeing-only customer. Airbus would be very disappointed if that were to happen, I think, because, as the title of this article implies, if Emirates had not ordered the A380, it would have been a.aster—Airbus has barely been able to even break even on the aircraft, let alone profit from it.

  6. Alpha141 says

    The relatively recent US travel ban with Laptops for some airports and other restrictive measures really impacted Emirates. The Middle East issue with Qatar also. Some of the carriers from these regions are pretty opinionated about certain things but very tight lipped over this….so not to rock the boat obviously.

    You have to consider the uncertainty going forth for potential things like that as weighing heavily on a commitment for such a high end, volume product. It would be very hard to commit to something so massive with a time frame of the next 20yr+ imho. So, purely focusing on an Airbus vs Emirates issue here would be a bit limited. It is more about the business climate based on uncertainty, Which has a political foundation.

    Qantas likes to buy a product that does not meet the demand. To justify higher prices and full stats relative to ‘load factors’ etc. As, there are more travelers vs seats. Perhaps see Emirates focus on twins vs a380 as something similar with the above.business environment.

  7. Radar says

    Are Qantas’ eight outstanding A380’s still on Airbus’ order book or have they been officially cancelled?

  8. Roger says

    I whought that the outstanding Qantas A380 orders were allocated to Jetstar brands A320neos. Some, I think, are unfilled orders which Qantas could use if, for instance, they bought the A350-900ULR.

  9. PAUL says

    Looks like its gone ahead, good on UAE for supporting the Aircraft industry. The A380 could be stretched but have to wonder if it would get filled to capacity.