Emirates Airline and Airbus have converted to a firm order a previous memorandum of understanding (MoU) calling for the sale of 20 additional A380s and reservation of options on another 16, the parties confirmed on February 11. Airbus values the agreement covering 36 aircraft at $16 billion based on latest list prices, but more important for the European airframer, the deal most likely keeps the A380 line running for another 10 years.
Signed at the World Government Summit by Emirates chaiman and CEO Sheikh Ahmed bin Saeed Al Maktoum and Airbus president for African and the Middle East Mikail Houari, the deal calls for deliveries to start as early as 2020 and raises the A380 backlog from some 95 to 115.
“This agreement underscores our commitment to the A380 program, providing stability to the A380 production line and supporting thousands of high-value jobs across the aviation supply chain,” said Shiekh Ahmed.
After delivering 15 of the airplanes last year, Airbus planned to cut the A380’s production rate to 12 this year, eight in 2019, and to six a year starting in 2020. Emirates itself, which took delivery of its 100th A380 late last year, plans to take six this year and another six next year.
During a January 15 briefing to discuss last year’s orders and deliveries, former Airbus Commercial Aircraft COO for customers John Leahy warned that a lack of orders threatened to close the A380 line in the near future. He noted that Airbus had engaged in talks with “a few key airlines” to support an aim to eventually return to producing 25 A380s a year, but he also characterized Emirates as “probably the only one in the market that has the capacity to take six to eight aircraft [a year] over several years.”
At last week’s Singapore Airshow, Leahy’s successor, new Airbus sales chief Eric Schulz, talked about sustaining enough activity on the A380 line to keep the program viable for suppliers.
“That’s why it was so important to finalize our order with Emirates,” said Schulz. “We know that at a rate of six [per year] we are industrially viable. This means that we have the opportunity to keep a final assembly line open, but we also keep our suppliers in situations and volumes [that will allow] them to sustain the activity.”
Schulz added that he had held discussions with “a couple of customers still interested in the A380.”
“The door will continue to be open on some very specific markets where growth will be a big issue because of restricted airspace, restricted airports. And I think we’ll continue to have some opportunities. Now will that be a dozen [per year]? Probably not. But it will probably be sustainable and help us to continue to live with the program, which is delivering value to the customers.”