Emirates Saves the Airbus A380 With Big New Order

Airbus has been telling anyone that would listen that if Emirates didn’t place a new A380 order they’d shut down the program. The plane would enter a death spiral. Without an ongoing program for the aircraft, the value of the Emirates fleet would drop and replacement parts for the aircraft would become harder to get.

The plane may have cost as much as $25 billion just to develop, but they’ve only delivered 217 of them — about half to Emirates. Emirates for its part said they wouldn’t order more without guarantees about the future of the program (they didn’t want to dig themselves in deeper) and without a great deal on a new more efficient engine.


Emirates Airbus A380

Airbus has been publicly talking about the prospect of discontinuing the A380 for at least 3 years. However Emirates needs the program, and Airbus needs the orders, you’d rationally expect the two sides to come together — and they have.

Emirates placed an order for 36 more Airbus A380s adding to the 101 currently in their fleet and the 41 already on order. That will bring their total A380 fleet to 178 — if they take delivery of all the aircraft. 20 of the purchases are firm orders, the other 16 are options.

The ‘list price’ of the planes Emirates has ordered is $16 billion. Normally airlines pay about half of list price. In this case, since the order was necessary for Airbus to continue the program and the plane maker was likely willing to sell each plane at a lost (a charge they will deny) Emirates probably is paying less than that.


Emirates A380 First Class Shower Suite

There’s no word at this time about the configuration of the new planes. Deliveries will begin in 2020.

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. I wouldn’t say they saved the airbus A380. Emirates had little choice but to order more! Maybe Clarke’s decision on putting all eggs in one basket should be viewed by the Board more critically.

  2. @ _ar why do you think they had little choice? 777X program is probably going to offer a -10 stretch and I’ve never actually seen a full Emirates A380, though presumably they exist somewhere.

  3. Flyers in general, and avgeeks in particular, should welcome this GREAT news!

    Ugly or not, most flyers have praised the Airbus A380 for its unrivalled comfort and quiet in ALL cabins (which of late Boeing could care less about for its products – especially the comfort part except for international long haul first/business class where half, or more, of the entire cabin is consumed by just 15% of self-important, space hogging divas while the other 85% of passengers gets squeezed like sardines into teeny-tiny, no legroom, seats, etc. into the back half of the cabin on Boeing’s overly densified, overly crowded, NYC subway car at rush hour that are its awful 777s and 787s for nearly everyone that turns right, instead of left, upon boarding)…

    …while avgeeks can look forward to watching this amazing engineering and technological marvel taking off and landing for many more years to come!!!

    Yay!!!

  4. Mixed feelings about this. It obviously unleashes even more subsidized flying on other airlines who don’t have their governments picking up their expenses. That said, given that the development costs for the A380 are sunk (and lost), I would think that the world might eventually benefit from the continued existence of this aircraft. Logic would suggest that this aircraft might eventually find more unsubsidized markets where it could be effectively deployed. Our cities, particularly in the developing world, are getting bigger, and airports are going to get more crowded. Perhaps flying A380s between major cities — which is what the aircraft was actually intended for — will eventually make economic sense. In which case, the world will benefit from the ME3 nonsense. Much like how the world today benefits from the foolish investors who thought oil was worth $150/barrel, which caused the development of the American shale industry. Only time will tell if this happens with the A380.

  5. @iahphx – I agree with you, mixed feelings about this. It would seem that Airbus is losing a ton of money on each plane since there any news on whether or not Emirates is getting the new engines they wanted. And the fact that Airbus did not want to put the work into a new engine should spell doom to the program. This sale will only prolong the slow death of the plane, it will not stop that death. And that should worry Emirates very much, they’re all in with a losing hand, unfortunately.

    The A380 is an amazing plane, fantastic engineering and truly monumental. But without more demand it just won’t last.

  6. I agree that Emirates had little choice. The airline’s management has staked its reputation on the whale. One thing execs hate to admit is a mistake. Time will tell if it can make it work. If it can’t, doubling down on the bloated bemoth could lead to a price war at some point.

  7. @ John, Robert — I think the 36 plane order is enough to minimally sustain the A380 production line. I think the idea is that’s the break-even point for keeping the project going while they await (hope?) for more orders.

    And, over time, there may be some hope. As Robert notes, it’s a good plane for what it is. Sometimes, it takes time for an airplane to “grow into its market.” The ill-fated 717 was such an aircraft; after Boeing shut down production, “everyone” wanted more of them! Logic would suggest there might be a need for a super-sized jumbo to fly between mega-cities. Perhaps this will be that aircraft someday. While there’s much to dislike about the way the program is being maintained, it’s still probably a net good for the aviation world that the A380 will remain in production. I’m guessing that the only people who are truly unhappy are at Boeing (who always predicted the failure of the A380), but they seem able to take care of themselves.

  8. Only 20 firm orders in this announcement. That will keep the line going for 20 more planes sure. Merely life support while Aurbus and Emirates pray for devine intervention.

  9. Howard Miller
    It is not Boeing’s decision to cram, squeeze or create sardine can conditions on their aircraft. Blame the airline’s bean counters and corporate big wigs.

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