Dubai wants guarantee on A380 output before placing new order
Dhabi’s Etihad reported losses in 2016 of $1.9 billion.
But the financial pain has not been restricted to the Arabian Gulf’s big three carriers.
Dubai-based Flydubai, a sister company of Emirates and with a budget model similar to that of Air Arabia, lost more than $38 million in the first half of the year — weighed down by falling yields and rising costs.
Emirates and Flydubai this summer said they would integrate some of their operations in a bid to save costs and mop up excess capacity on both of their networks.
The political feud between Qatar and four of its Arab neighbors has also hit the aviation sector, with some airlines, including Air Arabia, being forced to stop flights to Doha.
But despite such economic and geopolitical headwinds, Air Arabia has maintained relatively stable seat loads.
“For the last 14 years, we seem to have been enjoying average yearround 80 percent seat factors and that has not changed,” said Ali.
The carrier currently serves over 133 routes from five regional hubs, including two in the UAE (Sharjah and Ras Al-Khaimah).
The A321neo is considered the longest-range single-aisle passenger jet currently on the market — an important consideration for budget carriers based in the region looking to extend their route networks into Africa, Asia and Europe.
It is the first time Air Arabia has added newer A320 models to its allAirbus fleet.
The A321neo, which has an expanded capacity of 215 seats, will join the carrier’s existing fleet of 50 A320 aircraft, starting in 2019. DUBAI: Dubai wants a guarantee that Airbus will keep production of the A380 superjumbo open for at least 10 years before stateowned Emirates places a new order for the world’s largest jetliner, the airline’s president said on Monday.
Speaking to Reuters at the Dubai Airshow, Tim Clark also said the largest Middle East carrier would probably stick with the Boeing 787 for its mid-sized fleet needs after ordering 40 of the jets on Sunday, and could order more in future.
Airbus’s hopes of a new order from leading customer Emirates for the slow-selling A380 were thwarted on Sunday when the airline unveiled a surprise order for 40 Boeing 787-10 jets worth $15.1 billion at list prices, but no European contract.
Delegates said negotiations continued overnight and that Airbus may be willing to meet Dubai’s conditions in order to secure a much-needed order for its flagship product.
“We continue to have a dialogue with them,” Clark told Reuters.
“If that comes to some kind of fruition during the course of the week, or the next few months, is very much down to them.”
Airbus has been scaling back production plans for the A380, which was launched as the solution to ever-rising air travel between major international hubs but has been outflanked by improvements in the efficiency of smaller jets.
With 100 A380s already in Emirates’ fleet, Clark made plain the concerns about Airbus’ commitment to the project were being felt as high as the Dubai government, which owns the airline.
“I think the ownership here are concerned about continuation (of the A380). They need some copper-bottom guarantees that if we do buy some more, then the line will be continued for a minimum period of years and that they are fully aware of the consequences of cancelation and leaving us high and dry.”
“Those assurances I am sure will come. Quite when, I don’t quite know.”
Asked what would be a reasonable commitment to unblock a deal, he said: “A minimum 10 years. These are vast capital investments for us and we can’t afford to have anything less than 10 years; hopefully it would be 15. But it is their call.”
Airbus declined to comment.
Air Arabia said on Monday it had signed leases for six Airbus A321neo aircraft with Los Angeles-based Air Lease Corp. (Air Arabia)