ADIEU SUPERJUMBO
Airbus says it will stop manufacturing its iconic A380 superjumbo jet, the world’s largest passenger plane. The French aircraft company will stop delivering the double-deck, four-engine plane in 2021. The decision comes after Emirates Airlines — which operates the largest fleet of Airbus A380s in the world — reduced its orderbook from 162 to 123 aircraft.
Shaikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive of Emirates airline and Group
We have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years
Tom Enders, Chief executive officer of Airbus
dubai — Airbus announced on Thursday that it would scrap production of the A380 — the world’s largest passenger aircraft in operation — following a decision by Emirates airlines, the key customer of the iconic double-decker, to reduce its order book for the aircraft.
The European aircraft maker said Emirates would now take delivery of only 14 further A380s from 2019 until the end of 2021, taking its total A380 order book to 123 units, down from 162. The 20192021 deliveries are part of the order made in 2013.
“As a consequence and given the lack of order backlog with other airlines, Airbus will cease deliveries of the A380 in 2021,” the aircraft maker said. Emirates also decided to continue growing with Airbus’ newest generation, flexible widebody aircraft, ordering 40 A330-900 and 30 A350-900 aircraft in a new deal pegged at $21.4 billion at list prices.
The new order will be delivered to Emirates starting from 2021 and 2024 respectively.
“Emirates has been a staunch supporter of the A380 since its very inception. While we are disappointed to have to give up our order, and sad that the programme could not be sustained, we accept that this is the reality of the situation,” Shaikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman and Chief Executive of Emirates airline and Group, said.
While we are disappointed to have to give up our order, and sad that the programme could not be sustained, we accept that this is the reality of the situation
“After many months of discussions, we have come to an agreement with Airbus and Rolls-Royce,” Shaikh Ahmed said.
“For us, the A380 is a wonderful aircraft loved by our customers and our crew. It is a differentiator for Emirates. We have shown how people can truly fly better on the A380, and Emirates has set the standards for that by introducing customer experiences that are unique to the A380 like our Shower Spas and Onboard Lounge.”
The UAE national carrier said it would use the A330 neos to serve its regional destinations, as well as smaller airports, thereby opening up new routes and connectivity for its global network.
In January 2018, Emirates announced it would order 36 more Airbus A380s.
Emirates said in a statement that the A350s would supplement Emirates’ long-haul operations, providing the carrier with added flexibility in terms of capacity deployment on eight to 12 hour missions from its Dubai hub.
“As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years. This leads to the end of A380 deliveries in 2021,” said Airbus Chief Executive Officer Tom Enders. “The consequences of this decision are largely embedded in our 2018 full year results.”
“The A380 is not only an outstanding engineering and industrial achievement. Passengers all over the world love to fly on this great aircraft. Hence today’s announcement is painful for us and the A380 communities worldwide. But, keep in mind that A380s will still roam the skies for many years to come and Airbus will of course continue to fully support the A380 operators,” Enders added.
“The A380 is Emirates’ flagship and has contributed to the airline’s success for more than ten years. As much as we regret the airline’s position, selecting the A330neo and A350 for its future growth is a great endorsement of our very competitive widebody aircraft family,” said Guillaume Faury, President of Airbus Commercial Aircraft and future Airbus CEO. “Going forward, we are fully committed to deliver on the longstanding confidence Emirates is placing in Airbus.”
Airbus will start discussions with its social partners in the next few weeks regarding the 3,000 to 3,500 positions potentially impacted over the next three years. However, the ongoing A320 rampup and the new widebody order from Emirates Airline will offer a significant number of internal mobility opportunities.
Saj Ahmad, chief analyst at StratAero Research, said the termination of the A380 programme left Emirates with a very hard decision. By selecting A330-900neos and A350-900s, both powered by Rolls-Royce engines, as well as reducing its future commitments to the A380, Emirates has effectively reduced its exposure to the giant jet and arguably introduced more fleet flexibility —this is critical with its deepening relationship with flydubai in its pursuit to expand and capture efficiencies across its growing fleet. While there has been no mention of the 787-10, it is likely that contract will remain unchanged unless otherwise explicitly announced to the contrary,” said Ahmad.
“Given that Emirates leases all its A380s, it has shielded itself against a new defunct programme and an asset whose values will only decline as time goes on. Critically, there will be further impetus now to expand the 777X order – not just to replace the existing fleets of 777-200LRs and 777-300ERs, but also with a view to providing capacity uplift for when the earliest A380s in its fleet come off lease,” said Ahmad.
“For Airbus, this deal will have been a very hard pill to swallow given the immense costs associated not just with producing the A380, but also to close it down,” he said.
Still, Airbus announced on Thursday a 29-per cent jump in overall profits last year.
The plane maker reported net profit of €3.1 billion over last year, up from €2.4 billion in 2017. In addition to the A380 loss, Airbus reported a charge of €436 million on the A400M, used by several European militaries.
Airbus said it forecasts similar profits in 2019, in line with growth in the world economy and air traffic.
By selecting A330900neos and A350900s, both powered by Rolls-Royce engines, as well as reducing its future commitments to the A380, Emirates has effectively reduced its exposure to the giant jet and arguably introduced more fleet flexibility
Saj Ahmad, Chief analyst at StratAero Research