EMI­RATES IN­TER­EST IN A380PLUS OF­FERS AIR­BUS A BREATHER

Dubai Air Show might well de­cide whether Air­bus will close shop on the A380 and shelve the 380 Plus pro­gramme as the sales graph lit­er­ally sinks to zero

SP's Airbuz - - Table of Contents - BY BIKRAM VOHRA, DUBAI

IN TOULOUSE BLAGNAC IT isn’t yet time for un­cork­ing the cham­pagne but Air­bus must be heav­ing a tem­po­rary sigh of re­lief af­ter Emi­rates re­port­edly con­firmed its in­ter­est in the A380plus. No dead­line for any an­nounce­ment has been made though and none is likely till the air­show come Novem­ber and maybe not even then. As it’s stag­ger­ingly beau­ti­ful pre­de­ces­sor the A380 suf­fers from a lack of love pass­ing its tenth year of ser­vice, the rein­ven­tion of this big boy de­pends largely on one air­line.

That is a very un­usual equa­tion in com­mer­cial avi­a­tion where there may be a favoured cus­tomer or a jump­starter like what Sin­ga­pore was for the Triple 7s with a 77 air­craft deal in 1995 mak­ing it the largest sin­gle wide-body deal ever but never a sin­gle car­rier mak­ing the dif­fer­ence be­tween stay or go.

The 380 sce­nario is not good. With no sales this past year the assem­bly line in Toulouse is tres des­ole.

With a fleet of 96 A380 air­craft and op­tions on an­other 45 on or­der Emi­rates has the sin­gle largest or­der and is now hold­ing the key to the fu­ture of this gi­ant. Not that it wishes to but that’s the way the cookie has crum­pled. Al­most half the sales over the decade of 319 air­craft have been to Emi­rates. But there has been a slow­ing down and hav­ing de­ferred de­liv­ery of 16 planes it only placed an or­der for two air­craft at le Bour­get.

If it has been un­happy it is not with­out cause. For one, the A380 is a rel­a­tive gas guz­zler and with Emi­rates hav­ing a 25 per cent fuel cost of its to­tal run­ning out­go­ings this is hurt­ing.

Again one of the draw­backs to a full flex­ing of such a high ca­pac­ity air­craft is the in­abil­ity to in­crease city pair­ings be­cause many air­ports can­not han­dle the big bird. Con­trary to pop­u­lar opin­ion it is not the heav­i­ness of the air­craft touch­ing down on the rib­bon but the in­va­sion of a pos­si­ble 500-800 peo­ple on the ter­mi­nal and the time con­sumed in go­ing through Immigration and be­ing re­united with a thou­sand bags.

There are also tech­ni­cal and me­chan­i­cal nig­gles that have been is­sues brought up by the 13 car­ri­ers which op­er­ate the A380.

The air­craft has a list­ing of 131 in­ci­dents in­clud­ing in this year alone more than ten sit­u­a­tions. These have in­cluded en­gine prob­lems in flight on Air France and Lufthansa, a fire in the cabin on also on the lat­ter, stuck flaps on Korean Air and Qan­tas and a dropped nose­wheel on MAS.

There will be a cer­tain amount of sus­pense dur­ing the five day Dubai air­show and the is­sue will be cen­tral to the gath­er­ing of the global avi­a­tion com­mu­nity. It is safe to say this venue might well de­cide whether Air­bus will close shop on the A380 and shelve the 380 Plus pro­gramme en­tirely as the slug­gish­ness of the sales graph lit­er­ally sinks to zero.

It is also pretty much clear that Emi­rates will not make a com­mit­ment pre­ma­turely un­til it has done its sums and checked out how car­ry­ing on with the double deck­ers will af­fect the bot­tom line. Emi­rates has shown a 70 per cent de­cline in prof­its in its last fis­cal year and can­not con­tinue end­lessly to be a saviour in the sky.

Con­se­quently, the depth of the in­tent shown when the faith­ful gather will be in­ter­preted as a mea­sure of how far Emi­rates will hold Air­bus’ hand.

Sec­ond guess­ing the de­ci­sion is point­less. Suf­fice it to say that there is no res­cue mis­sion el­e­ment in the fi­nal de­ci­sion just the fact that there are 96 air­craft in the fleet and no car­rier wants to have a flag bearer that’s gone off the assem­bly line.

A great deal will de­pend on what Air­bus has to of­fer. As much in cost per unit and easy pay­ment plans as in the refinements to the air­craft that pos­i­tively im­pact on run­ning costs and fuel ef­fi­ciency. At present the very amenable Air­bus has to sweeten the pot. But will larger winglets, a 15 ft wing ex­ten­sion and a fuel sav­ing of 4 per cent be enough. The pro­to­type of the Plus was on dis­play at Le Bour­get and Air­bus is be­ing quoted as hav­ing promised as high as a 13 per cent cost re­duc­tion per seat on the re­worked air­craft. Range could also in­crease by 300 nau­ti­cal miles though that ex­tra push may not make much dif­fer­ence in terms of at­trac­tion.

The down­side is that there may be a six abreast con­fig­u­ra­tion which means four ‘ ex­cuse me’ seats and woe the poor guy stuck be­tween three and two pax on ei­ther side.

Does this new pack­ag­ing make it a vi­able propo­si­tion? While it is not easy to jet­ti­son a fleet Emi­rates is a prag­matic car­rier and hasn’t be­come a global lead player by sheer chance. If the rest of the world is mov­ing away from the mass tran­sit high den­sity air­craft to the ‘ long haul mid­dle to large ca­pac­ity high fre­quency op­tions’ why iso­late it­self with some­thing that could lit­er­ally be a white ele­phant. Be­tween the Dream­liner and the re­vamped 777 stretched ver­sion Boe­ing is ea­ger to de­liver a fur­ther blow to the A380 am­bi­tions. Both en­joy lower per pas­sen­ger op­er­at­ing costs.

For Air­bus it is also a toss up. Were Emi­rates to be agree­able to the Plus and all the boxes ticked in their favour the Euro­pean man­u­fac­turer will have to see if the in­vest­ment in the en­gine up­grade and work on the wings (pegged at over $2 bil­lion) has a chance of pay­ing off be­yond the Emi­rates of­fer. So while it puts on a brave face and make prom­ises to keep Emi­rates from feel­ing done down can it af­ford to keep these prom­ises?

A GREAT DEAL WILL DE­PEND ON WHAT AIR­BUS HAS TO OF­FER. AS MUCH IN COST PER UNIT AND EASY PAY­MENT PLANS AS IN THE REFINEMENTS TO THE AIR­CRAFT THAT POS­I­TIVELY IM­PACT ON RUN­NING COSTS AND FUEL EF­FI­CIENCY

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