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.
The plane may have cost $25 billion just to develop, but they’ve only delivered 217 of them — about half to Emirates. Emirates has a few dozen more on order was on the verge of buying more at the Dubai Air Show but backed out over Airbus’ unwilling to place guarantees on the program and the future of the planes and an inability to get the deal they wanted on a new engine.
Airbus still wants to rescue the Emirates deal. And contra hopes for Iran Air Emirates really is key to the continuation of the plane. In fact the planemaker has been publicly talking about the prospect of discontinuing the A380 for at least 3 years.
Emirates Airbus A380
Now they’re saying an Emirates order is do or die for the plane if they don’t get one they slow down production, fulfill current orders, and then it’s all over.
“If there is no Emirates deal, Airbus will start the process of ending A380 production,” a person briefed on the plans said. A supplier added such a move was logical due to weak demand.
…Airbus needs to sell at least another 30 to keep lines open for 10 years and possibly more to justify the price concessions likely to be demanded by any new buyers.
To bridge the gap, Airbus plans to cut output to six a year beyond 2019, from 12 in 2018 and 8 in 2019, even if it means producing at a loss, Reuters recently reported.
Chief Operating Officer Fabrice Bregier confirmed this month Airbus was looking at cutting output to 6-7 a year.
- Without an Emirates order there’s no clear future for the plane
- Without a future for the plane it’s tough to sell to other airlines, even understanding how tough it is to sell that plane to other airlines.
So without an Emirates order, manufacture of the plane enters a death spiral.
Emirates A380 First Class Shower Suite
Emirates knows the position they’re in and wants impossible economics and a better engine, which means that Airbus loses money just to keep the plane going.
On the other hand talking about the end of the A380 program is a shot across the bow of Emirates, because without a viable continuing program for the aircraft the value of their own fleet and about 40 additional planes on order drops too. And without a continuing A380 program getting parts for the planes that Emirates operates today will become harder.
It’s a two-sided negotiation, with each side trying to leverage the other through public maneuvers like unsourced claims about the end of the plane and last minute withdrawals from a deal when everyone is poised to present to the media at a major air show event.
Watch as an Emirates Airbus A380 lands in crosswinds in Dusseldorf: