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.
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”.
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