Emirates contract for 36 A380s likely to keep the jumbo jet running for another 10 years

Emirates airline and Airbus signed a contract for 20 additional A380 aircraft along with 16 options, firming up the Memorandum of Understanding (MoU) on February 11. The deal most likely keeps the A380 line running for another 10 years.

The total agreement for 36 aircrafts is valued at $16 billion (Dh58.72 billion) based on latest list prices and deliveries are to start as early as 2020.

The contract was 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 in the presence of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of UAE, and Ruler of Dubai, and Edouard Philippe, Prime Minister of France.

Chief Analyst of StrategicAero Research (London) Saj Ahmad said firming up the additional A380 order allows Emirates to use these jets to replace the vintage 2008-built A380s as they start to come off lease and Shiekh Ahmed (Emirates chairman) states that the agreement will support thousands of high-value jobs across the aviation supply chain.

At last week’s Dubai Air Show, 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. He added that at a rate of six [per year] we are industrially viable that will help to keep a final assembly line open and make suppliers to sustain their activity.

Emirates itself, which took delivery of its 100th A380 late last year, plans to take six this year and another six next year. Together with the airline’s 101-strong A380 fleet and its current order backlog for 41 aircraft the Emirates’ commitment towards the A380 programme brings to 178 aircrafts, worth over $60 billion. Emirates’ A380 fleet operates both GE and Rolls-Royce engines, and the airline is evaluating engine options for its latest A380 order.

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 and 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.

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.

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