The Airbus A380 is popular with customers for its spaciousness, although airlines are just now starting to really squeeze passengers into it like never before. However it’s never been popular with very many airlines.
Conceived of as a plane for ferrying large numbers of people between major cities, flying between the largest slot constrained airports where passengers might connect onward, the industry has gone in another direction entirely: point-to-point flying with smaller more fuel efficient jets that bypass additional connections entirely.
Though Airbus doesn’t publish final development costs for the superjumbo, those are estimated to be north of $25 billion dollars. Yet the plane that’s now been flying for a dozen years has only received 317 firm orders. Of those, 217 have been delivered — 100 of which have been delivered to Emirates.
(Emirates is the customer for another 42 of the remaining 100 aircraft in the Airbus order book.)
Emirates Airbus A380
In other words, the plane is far more niche than hoped. For Airbus the program is largely a failure. However it’s been developed, the question is can it continue?
Last week it was expected to get a shot in the arm from another big Emirates order. Reportedly Emirates had a handshake deal with Airbus to place an order for 36 more A380s at the Dubai Air Show last week.
Less than a week later, the sides had agreed a handshake deal, according to people familiar with the deal, who asked not to be identified because the deliberations were private. Emirates would take another 36 A380s worth $17 billion, bringing its total to a staggering 178 aircraft, more than half the model’s entire order book, the people said.
However Emirates has had two concerns.
- Airbus’ commitment to the program. They want Airbus to continue production of the superjumbo into the future, and not just to complete their own order.
- They want a new more efficient engine for the A380 (‘new engine option’) for the plane.
Singapore is Committed to New A380s — But Only to Replace Ones They’re Retiring
Emirates pushed Airbus “to buy back some its oldest jets to help ease those concerns” about the A380 program’s longevity.
And whereas Emirates has been buying Rolls Royce engines for its A380s based on a deal “that was keenly priced and offered particularly appealing terms for the maintenance work” Rolls Royce wouldn’t make such a deal again and has been unwilling “to upgrade the Trent 900 turbine that powers the superjumbo.”
Reportedly Emirates informed Airbus just as the air show began that they wouldn’t execute the deal as “Airbus PR executives who were already in place for a double-signing ceremony a hundred yards away.”
Emirates A380 First Class Shower Suite
The COO of Airbus says it’s still possible to rescue the deal before the end of the year. But Emirates drives a hard bargain as the only one interested in making a large order for these planes and insisting that they get them on favorable economic terms and that they also receive a commitment that production of the plane has 10 years of life. They want a live program to ensure parts and services for their aircraft into the future.
Emirates is the only potential major sale of the aircraft, the only way to keep the program alive, and it’s tough for Airbus to walk away from that — even at a loss.
Watch as an Emirates Airbus A380 lands in crosswinds in Dusseldorf: