Emirates deal saves Airbus A380 production line

Posted on 24 Jan 2018 by Michael Cruickshank

A new order for A380 jets has come just in time to save Airbus's production line for the world's largest passenger aircraft.

One of the many A380 aircraft currently operated by Emirates. Image courtesy of Wikipedia
One of the many A380 aircraft currently operated by Emirates. Image courtesy of Wikipedia

UAE-based carrier Emirates announced that it will purchase up to 36 of the new aircraft to supplement its fleet following a long negotiating period with Airbus.

Of those 36, Emirates has made a commitment to purchase a minimum of 20 of the jets, with the option to also purchase 16 more at a later date.

The first of these jets are expected to be delivered in 2020. Currently, Emirates already operates in excess of 100 A380 aircraft, making it the world’s most significant operator of the jet.

While it is the world’s largest passenger jet, able to carry up to 575 passengers, Airbus has had trouble selling the aircraft, in part due to its lack of cost-effectiveness.

The A380 only makes sense to operate on long international flights, and will only make a profit if it is completely full. As such, many airlines have instead opted to buy smaller but more efficient aircraft such as Boeing’s 787 Dreamliner.

For this reason, new A380 sales had been drying up, and just several days ago, the company openly mooted closing the A380’s production line, as they no longer had the requisite orders to keep the line moving at a rate 6 aircraft per year.

Now, with the new Emirates deal, it appears these plans to close the line have been shelved, and instead, the company will continue producing the aircraft for many years to come.

“This new order underscores Airbus’ commitment to produce the A380 at least for another 10 years. I’m personally convinced more orders will follow Emirates’ example and that this great aircraft will be built well into the 2030s,” said John Leahy, Chief Operating Officer – Customers at Airbus Commercial Aircraft.

All up, the deal is worth $16bn at current list prices according to Airbus, however, it is likely that that price which Emirates paid for these jets was considerably less, given the critical role this deal played in keeping production open.

Airbus also snags giant low-cost airline purchase

Airbus’s fortunes have also improved across the board with the company this week also signing one of the largest deals in commercial aviation history.

Airbus will reportedly sell 430 smaller aircraft to private equity firm Indigo Partners at a total price of over $50bn.

These aircraft will be distributed amongst a number of low-cost carriers including Frontier Airlines in the U.S., Mexico’s Volaris, Wizz Air of Hungary and JetSmart of Chile.