- Emirates ordered 40 Boeing 787-10 Dreamliners at the 2017 Dubai Air Show.
- The airline was expected to order more Airbus A380s. Emirates is concerned that Airbus may cancel the A380 program.
- “Most operators of the A380 I’ve talked to are not thrilled with the performance of the A380 given the cost,” Delta CEO Ed Bastian said in an interview.
Of the 318 A380 superjumbos that Airbus has sold in the 15 years since it began building the massive aircraft, one airline – Emirates – has bought nearly half.
The airline, based in Dubai, United Arab Emirates, operates 100 A380s – a double-decker aircraft that can carry as many as 800 passengers on long flights – while no other airline owns more than 19.
So when Emirates opened the 2017 Dubai Air Show this week with a blockbuster $15.1 billion order for 40 Boeing 787-10 Dreamliners – a sleeker, more efficient aircraft made by Airbus’s rival – it was a massive surprise. In fact, as Bloomberg News reporters at the show noted, Airbus was expected to announce a deal of that very size for the A380.
Even though Emirates’ president, Sir Tim Clark, told CNBC on Monday that the company hadn’t ruled out buying more A380s in the future, the reason he gave for going with the Boeing aircraft was particularly troubling. Emirates won’t order any more A380s, he said, until Airbus can firmly commit to not canceling the superjumbo.
Clark’s concern may become a self-fulfilling prophecy for Airbus.
For most other planes, Airbus could firm up its order books and stabilize the program by fishing for sales elsewhere.
But it can’t do that with the A380. At this point, Emirates isn’t just the plane’s most important customer – it is effectively the plane’s only customer. And that means what happened in Dubai this week could mark the end of the giant aircraft.
Airbus was not immediately available for comment.
It was going to revolutionize air travel
When Airbus unveiled the A380 in the mid-2000s, it was supposed to revolutionize air travel.
It was to usher in a new era of luxury and comfort, with the economics to make airlines happy. We were dazzled by visions of flying casinos and stylish in-flight lounges. And the sheer magnitude of the aircraft is awe-inspiring.
Even though the casino never materialized, the A380 has certainly delivered on the luxury and comfort it promised.
But for airlines, the airplane hasn’t quite delivered the financial returns operators sought – especially when compared with cheaper, more fuel-efficient twin-engine jets like the Boeing 787 and 777, and even the Airbus A350.
“The A380, I’ll be honest with you, has not been a wildly successful aircraft given that [Emirates] is the main operator of the plane,” Delta CEO Ed Bastian told Business Insider in an interview. “Most operators of the A380 I’ve talked to are not thrilled with the performance of the A380 given the cost.”
Even those who like the A380 recognize the economic challenges associated with operating the plane.
“If we were to fly two 787s tail-to-tail, the per-seat cost would be less than the A380,” the CEO of Qantas, Alan Joyce, told Business Insider in an interview. (Qantas’ 787 Dreamliner has 236 seats, while its A380 has 486.)
Qantas ordered 20 of the double-deckers but decided to take delivery of only 12. Joyce says the Dreamliner offers the airline more flexibility and lower financial risk, especially on routes with inconsistent or seasonal demand.
Is the end really here?
The plane billed as the second coming of the Boeing 747 is really no more than a niche product. The 747 itself is on life support, with production rates slowed to one plane every two months.
These days, the bulk of long-haul flying is done by twin-engine wide-bodies. The big four-engine jets are relegated to special high-density routes.
“The A380 still has a role on airports that have slot restrictions” – where you can’t add a second flight – “or where the scheduling windows work” for a single flight, like out of Los Angeles, Joyce said.
That means the only thing that can save the superjumbo is airport congestion.
It’s the same argument Clark has made in support of the plane.
“Airport congestion around the world is getting worse,” Clark told Business Insider in 2016. “And up-gauging aircraft is a solution for this.”
Clark and Emirates may still order another tranche of A380s. The airline likes to keep its average fleet age at about six years, and some of its older superjumbos are approaching the 10-year mark. And updating the A380 could be pricey. For instance, Singapore Airlines is spending $850 million for new interiors in its 19 A380s. It may be more economically prudent to order new planes.
Whether that will be enough to save the A380 remains to be seen.