The deal that wasn’t there – Emirates A380
At the Dubai Airshow Airbus and Emirates were expected to steal the headlines with the announcement of a $16-billion-worth deal for A380s. Instead, it was the Boeing and Emirates duo that entered the spotlight with a similarly valued deal for 40 Dreamliners. Does this mean that the future of the A380 has gotten bleaker?
Just how dependent is A380 on Emirates?
Out of the 317 A380 orders, 217 are delivered and operational, leaving 100 planes on backlog. At the same time, Airbus reveals the model has 13 operators and 18 customers in total. As of November 20, 2017 Emirates had ordered 142 A380s, of which 100 are delivered and operational. The airline is also waiting for 42 superjumbos to join its fleet. Being the largest A380 operator in the world is something the Gulf carrier is proud of, making it a part of their image.
Who won the pride games?
It is still unclear why Emirates chose to back-out from the deal at the final moment. One of the versions says that Emirates’ decision was determined by the prevailing uncertainty of the A380’s future. During the press conference at the Dubai Airshow 2017, Emirates CEO Tim Clark made it clear that the airline first wants proof of Airbus’ commitment to continue the production of the superjumbo for at least 10 years. According to Reuters, the response by Airbus was an email to Clark, in which Airbus CEO Tom Enders calls the “ultimatum […] unhelpful”.
But whether Airbus’s pride was hurt or not, it appears that the manufacturer does not have the luxury to take upsets into account, as there are two bigger obstacles: the retirement of Airbus’ top salespeople and Emirates’ headache with A380 engines. As Reuters points out, “the guardian of the Emirates relationship” Habib Fekih retired in 2017, while Airbus’ sales legend John Leahy is retiring in January 2018.
The mitigating rhetoric is visible in the latest interview Airbus’s Enders gave to Bloomberg on November 17, 2017. Enders admitted that the market for A380 is very narrow and Emirates is a big part of it. Enders claimed the deal for 30-40 A380 aircraft is still in the talks with Emirates and might happen this year, in which case the manufacturer would continue the production line for the upcoming decade, hoping to find additional customers along the way.
Powering up the A380 is another dilemma Emirates faces. The Gulf carrier has been challenging Airbus to start working on a new engine for the A380 for years now, but the manufacturer keeps declining the suggestion until the market demand for the model picks up, Arabian Business reported in the beginning of November 2017. Currently, Emirates A380s are powered by Trent 900 turbines, made by Rolls Royce. But the engine supplier might also be not as keen to offer the same attractive pricing or terms for the maintenance work as it was back in 2015 – the last time Emirates (or anyone, for that matter) bought the A380.
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