Airbus A380 gets lifeline as Emirates orders 36 new planes
19 January 2018
Emirates Airlines, the Middle East's largest carrier, said on Thursday it has struck a $16-billion deal to buy 36 Airbus A380 superjumbos, not long after the European manufacturer said it would have to halt production without new orders.
The company said it had placed firm orders for 20 of the double-decker aircraft with options for a further 16. Deliveries are scheduled to start in 2020.
Emirates is already the world's biggest customer for the A380 with 101 in its fleet and 41 more firm orders previously placed. The Dubai-based airline said that with the new order it will have commitments for a total of 178 A380s worth $60 billion.
The Dubai-based Emirates already has 101 A380s in its fleet and 41 more on order, making it the largest operator of the jumbo jet.
''This new order underscores Airbus' commitment to produce the A380 at least for another ten years,'' said Airbus chief salesman John Leahy.
Emirates chairman and chief executive Sheikh Ahmed bin Saeed Al Maktoum said the order ''will provide stability to the A380 production line''.
Al Maktoum and Leahy made the comments in a statement after the deal was signed in Dubai on Thursday morning.
Emirates, owned by the Dubai government in the United Arab Emirates, said the additional A380s will be delivered to the airliner from 2020 onwards and that some of the new A380s will be used as fleet replacements.
The deal was expected to be signed during the Dubai Airshow in November but was delayed without any explanation amid reports of tough negotiations. Instead, Emirates inked a deal to buy 40 Boeing Dreamliners for more than $15 billion.
Airbus's decision in 2007 to pursue the development of the A380, capable of packing 853 seats, was diametrically opposed to Boeing's bet on the Dreamliner, marketed as a more efficient plane that could be used for both medium and long-distance flights.
An Airbus A380 has a list price of $445.6 million, but airlines and manufacturers often negotiate lower prices. Airbus delivered just 15 of the planes last year, and aims to deliver 12 more this year.
The economics of the A380 have proved daunting, with airlines having to fly every flight at full capacity in order to make a profit. Airbus warned on Monday that it might have to end production of the A380, having booked no new orders for the plane in two years.
The Emirates deal was crucial for Airbus to continue the A380 production line (See: Airbus A380 superjumbo set to follow Boeing 747 into the sunset).
It said it regarded Emirates as the only airline with the capacity to place an order of the size required to keep production going.
At Dubai's biennial Air Show in November, Airbus suffered an embarrassment when it was scheduled to announce it had a struck a deal with Emirates for its A380, only to see Boeing sit on the podium with the airline and sign a $15.1-billion deal.
Emirates' fleet relies solely on the Airbus 380 and the Boeing 777 for its flights."We've made no secret of the fact that the A380 has been a success for Emirates," the airline's chairman and chief executive Sheikh Ahmed bin Saeed Al-Maktoum said.
"Our customers love it, and we've been able to deploy it on different missions across our network, giving us flexibility in terms of range and passenger mix."
Emirates Airlines has a fleet of 269 wide-bodied aircraft and flies to 157 destinations.