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Airbus pulls the plug on A380 as Emirates cancels order

Posted 14 February 2019 · Add Comment

Airbus confirmed today that production of the A380 will end in 2021 following the decision by Dubai-based airline Emirates to cancel outstanding orders for the Superjumbo.


It reduced its fleet requirement from 162 to 123 aircraft. It will take delivery of the last 14 of the type over the next two years – they will be the final deliveries of the aircraft that has proved to be popular with passengers – but not with accountants.
The airline softened the blow for the European manufacturer by opting for 30 A350-900 aircraft and 40 A330-900
“As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years. This leads to the end of A380 deliveries in 2021,” said Airbus chief executive Tom Enders. “The consequences of this decision are largely embedded in our 2018 full year results”.
“The A380 is not only an outstanding engineering and industrial achievement. Passengers all over the world love to fly on this great aircraft. Hence today’s announcement is painful for us and the A380 communities worldwide. But, keep in mind that A380s will still roam the skies for many years to come and Airbus will of course continue to fully support the A380 operators,” Enders added.
The A380 has been synonymous with the Gulf airline whose president Sir Tim Clark in recent years has been calling on the manufacturer and its engine suppliers to look at development to reduce the cost and improve efficiencies. Sources at the airline say there was increasing frustration with issues over under performance. Clark has also been an advocate for a larger variant of the A380.
But undoubtedly the aircraft has been an important part of Emirates growth – and that of the Dubai International hub.
“The A380 is Emirates’ flagship and has contributed to the airline’s success for more than ten years. As much as we regret the airline’s position, selecting the A330neo and A350 for its future growth is a great endorsement of our very competitive widebody aircraft family,” said Guillaume Faury, President of Airbus Commercial Aircraft and future Airbus CEO. “Going forward, we are fully committed to deliver on the longstanding confidence Emirates is placing in Airbus.”
The decision to select the A330neo and reviving an interest in the A350 after axing an order in 2014, will be a relief to engine manufacturer Rolls-Royce which is on
Airbus will start discussions with its social partners in the next few weeks regarding the 3,000 to 3,500 positions potentially impacted over the next three years. However, the ongoing A320 ramp-up and the new widebody order from Emirates Airline will offer a significant number of internal mobility opportunities.
Sheikh Ahmed bin Saeed Al Maktoum, chairman and CEO, Emirates Airline and Group, said: “After many months of discussions, we have come to an agreement with Airbus and Rolls-Royce.

“Emirates has been a staunch supporter of the A380 since its very inception. While we are disappointed to have to give up our order, and sad that the programme could not be sustained, we accept that this is the reality of the situation. For us, the A380 is a wonderful aircraft loved by our customers and our crew. It is a differentiator for Emirates. We have shown how people can truly fly better on the A380, and Emirates has set the standards for that by introducing customer experiences that are unique to the A380 like our shower spas and onboard lounge.

“The A380 will remain a pillar of our fleet well into the 2030s, and as we have always done, Emirates will continue to invest in our onboard product and services so our customers can be assured that the Emirates A380 experience will always be top-notch.”

Chris Cholerton, Rolls-Royce, President – Civil Aerospace, said: “We welcome the news that Emirates is further extending its relationship with Airbus and Rolls-Royce. The addition of Airbus A330-900 and Airbus A350-900 aircraft to the Emirates fleet will make the airline one of the largest users of Trent engines in the world and we look forward to continuing to support them and their customers.”

Analyst Saj Ahmad commented: “Airbus’ termination of the A380 programme left Emirates with a very hard decision. By selecting A330-900neo’s and A350-900s, both powered by Rolls-Royce engines, as well as reducing its future commitments to the A380, Emirates has effectively reduced its exposure to the giant jet and arguably introduced more fleet flexibility – this is critical with its deepening relationship with flydubai in its pursuit to expand and capture efficiencies across its growing fleet. 

“While there’s been no mention of the 787-10, it’s likely that contract will remain unchanged unless otherwise explicitly announced to the contrary.” 

Ahmad adds: “Given that Emirates leases all its A380s, it has shielded itself against a new defunct programme and an asset whose values will only decline as time goes on. 

“Critically, there will be further impetus now to expand the 777X order – not just to replace the existing fleets of 777-200LRs and 777-300ERs, but also with a view to providing capacity uplift for when the earliest A380s in its fleet come off lease. 

“For Airbus, this deal will have been a very hard pill to swallow given the immense costs associated not just with producing the A380, but also to close it down. It will also have had to endured significant financial challenges to make the A330-900neo and A350-900 elements for Emirates attractive too.”

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