Without a Big Order Soon Airbus Will End the A380 Program

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:

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. You know I really love this bird, have flown several carriers of course EK being my favorite with AF being second, BA a distant last place, but then it’s BA.

    Back to point its all about scale of economy and while AB jumped ahead when the 380 came on, Boeing as usual trumped with the 787 which is a great piece of metal. what I see as a disturbing trend is the comfort and quality of the Biz/FC sections which is where the ME3 play in. I just returned from a quick trip to LHR/AMS all BA First over and Biz return 787-9 we found the Biz to be a better overall experience. But like any BA flight it’s hit or miss on service.

  2. A beautiful, quiet, roomy plane. Best one I’ve flown and I’ve flown on most of the commercial jet aircraft types since the 707. If the 380 ends that leaves both AB and Boeing with 3 aircraft family offerings: 320-330-350 vs. 737-777-787. The 747-8i order book pretty much only has freighters left to be built with no new pax orders in years. And 2018 could herald the announcement of the 797. The next great re-leap will be to offer a new supersonic aircraft. Since the demise of Concorde aviation took a step back, it’s time for it to go forward again. The Europeans have the ability to beat Boeing on that front given Concorde and given the multi-national Airbus makeup to finance it. It will be more than the 11bn spent on the A380, double, at least. But with Boeing’s stock at stratospheric highs it could easily raise 20 to 30 billion as well.

  3. Good riddance to a pig ugly plane, which never should have gotten off the ground. Yes, its large. Yes, its awesome that something that big can get off the ground. However, as much as I can avoid that beast, the happier I am.

  4. Sad to see the the demise of the 380. It’s so quite and roomy, I love flying the 380 and will change my flights just to get on it.

  5. European pride and the network of cross Euro subsidies has kept it alive and will keep it alive much longer than the market possibly would on its own. I fully expect Emirates to carve out a sweetheart deal that will keep the anemic line open.

  6. A380 is critical to Airbus, Emirates can limp along and piece together planes to keep them flying until they can be scrapped. But Airbus needs this line to live a little longer, shareholders will be much more cautious of future big bet projects if the A380 ends badly in the red.

  7. It would be a shame if this is the case, as its the ultimate jumbo plane out there in terms of passenger comfort and its not about looks (like you gotta be kidding?) and far superior to crappy Boeing planes. Hopefully when fuel prices rise (and they will) these larger planes would make more sense then point to point flights.

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