Following reports late last year that the fate of the Airbus A380 could hinge on whether Dubai orders another batch of the super jumbo jets for the country’s Emirates Airline, it seems the tiny Gulf state has come through just in the nick of time.
The Financial Times reported Thursday that Emirates has signed an initial agreement to buy 36 Airbus A380 aircraft, including 20 firm orders and the option for 16 more, in a deal valued at $16 billion.
As we noted late last year, Airbus introduced the A380 about a decade ago. It was intended to be the European aerospace company’s answer to rival Boeing’s popular 747.
The deliveries, expected to start in 2020, will guarantee production of the plane for at least another decade, said John Leahy, Airbus’ sales chief.
The deal has raised executives’ hopes that the A380 will be saved.
“I’m personally convinced more orders will follow Emirates’ example and that this great aircraft will be built well into the 2030s.”
Reports that Dubai might not come through with the order materialized late last year after Emirates failed to place its order for 36 new A380s during the Dubai air show.
The agreement was signed with Emirates’ chairman, Sheikh Ahmed bin Saeed Al Maktoum, who said the Dubai airline would use some of the aircraft for fleet replacements. Emirates started operating the A380 in 2008, and received its 100th model in November, out of 222 delivered to 13 airlines to date. Sheikh Ahmed said the aircraft, which is the world’s largest commercial passenger jet, was the “best way to capture” growing air traffic, which is doubling every 15 years.
Once considered flagship brands, demand for jumbo jetliners like the A380 – which was introduced 10 years ago to help Airbus compete with the Boeing 747 – has sagged as airlines have turned toward smaller twin-engine aircraft that are cheaper to fuel and maintain.
In anticipation of this trend, Airbus in October decided to buy a stake in troubled Canadian aircraft maker Bombardier’s C-Series – a decision that was widely interpreted as a direct strike against Boeing, which is locked in a momentous trade battle that has seen the Department of Commerce slap a massive 300% tariff on the jet after Boeing filed a trade complained against Bombardier last spring.
According to the New York Times, Airbus did not book any orders for the A380 last year. Instead, orders for two of the A380s were canceled. The poor performance for the aircraft overshadowed an otherwise decent year for the company.
John Leahy, Airbus’s chief operating officer, reiterated on Monday that if the company were unable to agree on a deal with Emirates, the super jumbo’s days might be numbered.