Whoa: Emirates Orders Up To 36 More A380s, Keeps Production Alive

For years now we’ve been hearing rumors of Airbus ending production of the Airbus A380. I most recently wrote about this just a couple of weeks ago, as the plane hasn’t worked out quite the way Airbus was hoping.

While Emirates already has over 100 of these planes in their fleet and loves them, other airlines haven’t been as impressed, and we’ve seen very few orders otherwise. Airbus is approaching the point where they’ll have to shut down production if they don’t get any more orders for the aircraft.

This is where the chicken and egg situation starts. Emirates has wanted more A380s, but only if Airbus is committed to keeping the program around long term. After all, Emirates doesn’t want to buy what will otherwise very quickly become outdated technology. Rather they’d like to see Airbus improve the A380. Furthermore, arguably there will eventually be more demand for the A380, as the global demand for air travel continues to increase, and as airports become increasingly congested. Arguably the plane was just introduced too early.

The problem is that without further customers on the horizon, Airbus would be silly to invest more in the plane. This has put Airbus and Emirates at a standstill. Emirates even recently placed an order for 40 Boeing 787-10 aircraft, which many suggested was a replacement for any further A380 order.

Well there’s some fantastic news for A380 enthusiasts. Emirates has just signed a memorandum of understanding to acquire up to 36 additional Airbus A380 aircraft. The airline has committed to purchasing an additional 20 Airbus A380s, and has an option for 16 more, with deliveries to start in 2020. This deal is valued at 16 billion USD at list prices (though presumably they got a steep discount).

What’s interesting is how Emirates is viewing this order. Emirates’ CEO makes it abundantly clear that “some” of the A380s they’ve ordered will be used as fleet replacements, and that this provides stability to the A380 production line:

Sheikh Ahmed said: “We’ve made no secret of the fact that the A380 has been a success for Emirates. Our customers love it, and we’ve been able to deploy it on different missions across our network, giving us flexibility in terms of range and passenger mix. He added: “Some of the new A380s we’ve just ordered will be used as fleet replacements. This order will provide stability to the A380 production line. We will continue to work closely with Airbus to further enhance the aircraft and onboard product, so as to offer our passengers the best possible experience. The beauty of this aircraft is that the technology and real estate on board gives us plenty of room to do something different with the interiors.”

And here’s what Airbus’ COO had to say:

“I would like to thank Emirates, HH Sheikh Ahmed, Tim Clark and Adel Al-Redha for their continued support of the A380,” said John Leahy, Chief Operating Officer Customers, Airbus Commercial Aircraft. “This aircraft has contributed enormously to Emirates’ growth and success since 2008 and we are delighted that it will continue to do so. This new order underscores Airbus’ commitment to produce the A380 at least for another ten years. I’m personally convinced more orders will follow Emirates’ example and that this great aircraft will be built well into the 2030s.”

I’m not sure whether to be surprised by this order or not. On one hand, it’s clear that Emirates loves the A380, and they’d be a lifelong customer if Airbus were committed to the program (which would require more airlines to be interested as well). This order is essentially a band-aid, and just keeps production going for a little while longer. We’re not seeing a big investment in the advancement of the plane, and I don’t see this order causing other airlines to follow suit, when there are planes like the A350 and 787 out there, and planes like the 777X on the horizon.

Airbus’ COO is of course more optimistic, noting that this underscores Airbus’ commitment to produce the plane for another decade, and that he’s personally convinced that more airlines will follow Emirates’ lead. If they haven’t done so yet, I’m not sure what makes him think they will in the near future.

What do you make of Emirates’ A380 order? Do you think the A380 program is “saved,” or this is just a small band-aid that keeps production going for a few more years?

Comments

  1. Wow! Lucky Airbus… Emirates saves the day! I totally didn’t expect this.

    BTW, Thank you Lucky for your speedy new updates! 🙂

  2. Been a long time coming. Also of interest, and somewhat related, Tim Clark said yesterday they will also be rolling out the new First Class Suite on the A380 too.

  3. It will be interesting to see what percentage of these are replacements for existing EK A380s and what will be brand new ‘additional’ aircraft. EK seem to have slightly changed their strategy recently of deploying A380s to random destinations like Dallas just because they could. They’re finally starting to right-size destinations based on actual demand as they start to examine costs and maximise profit. In which case the 787 will be ideal for their third ‘tier’ destinations that EY and QR either send narrow-bodies to, or don’t even fly to at all.
    I really can’t imagine there are many destinations they need additional A380s for – there aren’t that many slot restricted airports in the world and they have sent A380s to those destinations already whilst still having additional A380s to send to bizarre places like NCE.
    There is going to be a MASSIVE glut of second hand A380s that nobody is going to want if operators are only keeping them for 10-15 years.

  4. @ Ben – Perhaps BA will be happy. Their CEO has said the only way they would take on more A380’s is from the second hand market. There may be a few coming online soon 😉

    I think most of SQ’s new A380’s are also to enable them to retire the original aircraft? It seems a very short life span!

  5. I was beginning to wonder how ANA felt…still haven’t even gotten one of theirs and the project looked dead. Glad to see the A380 life extended. Still really hoping for a new first class product on the ANA A380. There soft product is incredible on the 777, but that cubicle is more fitting of a lounge office space….

  6. Perhaps those airlines from China and India would absorb those soon to be retired 2nd hand A380s from Emirates, SQ, and other airlines as those 2 countries have huge population that need big planes to serve large number of passengers even for their domestic flights.

  7. Duck

    BA is an obvious candidate for more A-380’s given the airport capacity issues at Heathrow and Gatwick. Gatwick is the world’s busiest single-runway airport so the A-380 makes a lot of sense there – Emirates already flies 3 A-380’s a day there, as well as a few more to Heathrow.

    And BA gets good load factors on its key North American routes, and use A-380’s on a number of them, although not JFK where the key is frequency instead.

  8. @ Lucky – Off topic: will you cover the change in Citibank’s fourth night benefit coming into effect from March 2018 (i.e. the average rate is considered as opposed to the actual rate for the fourth night, taxes for the fourth night no longer included, seven days’ break enforced between stays if within the same city but staying at different hotels)?

  9. Geez Ron have you flown the new 787 or the newest 777 pretty quiet birds. Just saying

    It would be interesting to see exactly how much EK is paying per plane, as others have said which are replacements as there are some older ones flying and how are they configuring them.

    While they, EK is making this order I highly doubt you will see other airlines ordering. The 787-9 and 10 coming plus the AB 350. Efficient and nimble.

  10. @ghostrider5408: The 787 is quiet, but the 777 isn’t. I have hopes for them to improve this with the 777x but, for now, the 777 is in the ‘impressive but not quiet’ category. Keep in mind that it’s essentially tech from the 90s. Not particularly old in plane years, but still planes like the Dreamliner/A350/CS/A380 have pushed the level of noise quite drastically down since then.

  11. @ Lucky:

    • For reservations made before February 28, 2018, you will receive one complimentary night (room rate for the fourth night and applicable taxes only) for any consecutive four-night hotel stay booked directly with a Citi’s designated travel advisor. Hotel imposed fees and incidental guest charges are the Cardmember’s responsibility. The value of the complimentary night will be the actual rate, as provided by the designated travel advisor, on that fourth night of the reservation, even if the rate is different from the rate on other nights.

    • For reservations made on or after February 28, 2018, you will receive a credit based on the average nightly rate of your first four-night stay in the same hotel property. Taxes of any kind will no longer be credited. Hotel imposed fees, including dining or resort fees, and incidental guest charges are the Cardmember’s responsibility.

    • Starting March 1’ 2018-for bookings within the same city where this offer was availed earlier, the check-out date of the previous eligible booking and the check-in date of the new booking should be 7 or more days apart to be eligible for the 4th night booking benefit.

    http://www.citibank.com/uae/consumer/credit_cards/pdf/prestige_benefit_tnc.pdf

  12. @ Aquitania — Very interesting, though looks like this is UAE specific, and doesn’t apply to the US card? Haven’t found similar term changes in the US. Appreciate the heads up, though!

  13. unless the new a380 has got better cabin pressure like 787 or 350, I am not sure if I will miss it if it remains the same.

  14. @ lucky. Hmmm, not sure if the moderating system is allowing me to post a link. Nevertheless, Tim Clark’s brief comment re. new First suites on the A380 can be found on an article on Business Insider website from 17 January, titled “Airbus has the airline it needs to save the A380, but it can’t close the deal”.

  15. This is awesome news !!!
    I’ve flown B787 and A350 several times and I sincerely don’t feel any love for both these aircrafts.
    I’ve always been crazy about the B747 and in th epast few years also the A380.
    Of course, besides these two beauties, I wish I had experienced the Concorde but she stopped flying before I could try.

  16. Regardless of what it means or what it will lead to. It’s insane that one airline can be so powerful as to single-handedly keep such a program alive.
    I wonder what political/economical implications that may have and if the UAE is able to use it as a tool to put pressure on other nations-directly or indirectly- that have a stake in Airbus.

  17. Great to hear more orders for this excellent aircraft.

    Given the 747 was viable in the past, going down in capacity with 787 and a350 doesn’t appear a long term solution as the 744s are replaced. I can see other makers pick this up to support high volume traffic.

  18. Have you checked 777X order books?

    If you take out Emirates, you loose about half. Take out Etihad and Qatar, and it gets pretty thin.

    There doesn’t seem to be that much real interest to >A350/787 planes at the moment.

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