Airbus Will End A380 Production If Emirates Doesn’t Place A Big Order

Filed Under: Emirates

While there’s a lot to love about the A380 from a passenger comfort standpoint, unfortunately most airlines don’t see the plane in the same way we do. When the A380 was first introduced over a decade ago, many assumed it would eventually become the most popular longhaul plane in the sky, especially as global demand for air travel continues to increase, and as airports get more congested.

That hasn’t been the case, however. While about a dozen airlines operate the A380, the only airline that has raved about the A380 is Emirates, which already has 100 of them in their fleet, and within a few years should have 142 of them. When all is said and done, Emirates will operate about half of all A380s in the world, and that’s assuming more airlines don’t retire them in the meantime (Singapore Airlines already retired their first A380).

Instead airlines have been opting for more fuel efficient and lower capacity aircraft, like the Airbus A350 and Boeing 787, which allow airlines to do a better job of filing planes with decent yields.

For years there have been rumors of A380 production ending. For example, in 2014 I wrote about how Airbus shared the possibility of discontinuing production of the plane, which Emirates wasn’t happy about, given that they’ve invested so much in the plane, that it’s one of only two planes they operate, and given that they want to see the plane evolve, rather than be discontinued.

While this doesn’t come as much of a surprise, Reuters is reporting that Airbus is ready to phase out the A380 if Emirates doesn’t place a big order sometime soon:

“If there is no Emirates deal, Airbus will start the process of ending A380 production,” a person briefed on the plans said. A supplier added such a move was logical due to weak demand.

Any shutdown is expected to be gradual, allowing Airbus to produce orders it has in hand, mainly from Emirates.

It has enough orders to last until early next decade at current production rates, according to a Reuters analysis.

Airbus and Emirates were in talks over a further order of 36 A380s at the Dubai Air Show, for a deal that would have been worth 16 billion USD. Unfortunately for Airbus, those talks broke own, though apparently the two companies are talking again.

Instead Emirates ordered 40 Boeing 787-10 aircraft at the Dubai Airshow, which many suggested was essentially replacing any further A380 order.

In many ways the current A380 situation seems like a chicken and egg issue. The way I see it, eventually there will be sufficient demand for the A380, given increasing global demand for air travel. The plane was probably just introduced a couple of decades too early. Emirates is willing to place an A380 order, but wants a guarantee that production will keep going for at least a decade, so they can protect their investment. At the same time, without an investment from Emirates, there’s no way A380 production will continue.

We’ll have to wait and see how this plays out, though this just seems like such an unfortunate situation. The A380 is a great plane and eventually demand will be there for it, though it may just have been introduced too early. It would be a shame to see A380 production shut down.

Do you think Airbus will shut down A380 production, or find a way to keep the plane alive?

Comments
  1. Selfishly I hope they come to an agreement. Living/working in Dubai and flying to NYC and London a number of times a year, the 380 in biz class is vastly superior to the 777. I usually look forward to the 380 routes whereas my current trip to Cape Town flying the 777 is OK but nothing special. Can’t we all just get along!?

  2. Is it too late or too early? Compare with B747 that come to aviation industry about 40 years ago? And we know thay the demand for queen of the sky only to freighter aircraft now. CMIIW

  3. I don’t completely agree with you when you say there will be demand in the future.

    With the advent of fuel efficient A350 and 787, the aviation models are shifting from hub-and-spoke to point-to-point, and there is also a rise of low cost long haul. 787 alone has opened up 140 new city pairs (per anna). So people can now fly direct from London to Nashville, rather than transitting through New York, DC, or Chicago. Also, efforts are put in by the manufacturers to increase the maximum aircraft range.

    So yes there will be demand for A380, but it will not be significant enough. The only saving grace for A380 will be if airports remain saturated and congested, with no room to increase.

    As it is my favorite aircraft to fly in, it is really sad to see that the A380 might not exist after a decade or so.

  4. One of Emirates’ A380’s has become a part of a garden exhibit in Dubai – covered in flowers even! Seems like even Emirates isn’t able to make full use of the A380’s that they have

  5. Doubt there will ever be a sizable market for this jumbo plane, now or int he future. The few times I have taken the A380 it is been a pain to get on, get off, get through immigration — also a huge toll on the facilities and airport staffing.

    With higher demand more people will want the ability to fly directly between tier 2 cities or more frequency serving hub cities. 787 allows airlines to do this at a profit.

  6. @Andy, the A380 garden display at the Miracle Garden isnt a real A380. Its just a 1:1 flower display of an A380.

  7. Kevin

    Depends on the airport. At Heathrow, for instance, there are typically three separate entrance/exits for a A380.

  8. it doesnt even have the same cabin pressure as 787 (which is better), or even the a350(which was airbus response to 787).

    dont see a380 is better for comfort. typically too dry for me in premium cabins. i will choose 787 or 350 anyday.

  9. @JS +1. I disagree with the premise that there will DEFINITELY eventually be a demand for a 380. Fuel efficiency is causing a shift to long and thin routes worldwide. If a tier 1 city becomes too congested with air traffic, simply fly to the nearest tier 2 instead.

  10. I’ve always enjoyed my trips on the A380, both in business and economy. It’s been a much better passenger experience than the 787 squeezeliner, especially in economy.

    Congested airports and hub-and-spoke models will remain for as long as it is economically advantageous to operate such a network. I believe that as air traffic continues to rise, the A380 could once again become a viable option for airlines looking to move tons of people from point A to point B.

    The challenge Airbus faces is that Emirates want an engine update, but Airbus appears to be loath to invest.

  11. Sadly with effectively only one customer it’s hard to see a future for this plane. I don’t know the economics that Airbus operates on for this production line, but given that Emirates can effectively name their price, its hard to see much of a margin for them.

    One issue I think may become more relevant (over time and not soon enough to save the A380) is the capacity that this type of plane provides to capacity constrained airports (I say this as someone that flies from Asia to Heathrow at least 15 times a year). Where you have an airport like Heathrow, where building an extra runway is overdue and doubtless likely to be tied up in planning appeals for years – good luck finding a major infrastructure project in the UK delivered either to time or budget – I’m surprised that opponents don’t make more of the fact that commercial decisions by airlines to fly lower capacity planes, means that the effective capacity of airports (in terms of runway capacity, given that a A320 takes as much runway capacity as an A380) is reduced. It’s not wholly a valid argument, but if one looks at British Airways, who, through IAG have the best part of 50% of the slots at Heathrow, then a local resident could argue that BA are putting their operational efficiency above wider social issues for residents.

    As I say, I’m not looking for someone to put a coach and horses through that argument, I could do that myself (ground facilities at destination airports, etc, etc,) but it’s something I’m surprised hasn’t had more airplay.

  12. I remember the hype around the A380, when it was introduced into service.
    Me, my wife and two kid sons were so excited, we booked flights from Europe to Tokyo, only to be able to get on a flight to Singapore from there in the firstvweek of A380 service on Singapore Airlines. We sat in the very back of the upper deck, near the stairs to the lower deck. We were in Economy, but the screens were big, much bigger than any other economy class at that time. It was absolutely worth the cost, to haves ich a family experience, we talked about it for years. Later I flew the A380 in Premium Economy from Paris to Tokyo on Air France, which was Much worse than the Economy experience on Singapore! The French were so cheap… I understood that it depends on the airline, not the aircraft! I recently was on Emirates full flat Business on the A380, and there I found again this special feeling, that i first had in the 1980s, when being on the upper Deck of a 747 Jumbo Jet. It may be a romantic thing, but I hope the A380 is there to stay.

  13. One of the issues with the 380 is the stretch was never built. The wing is designed for the A380-900, so too big for the -800. Thus not as efficient as it could be and this hits the seat per mile cost. It could have a long future with Emirates and maybe a few others if Airbus can improve the operating costs. This is a risk that Airbus needs to weigh up and no doubt needs some very firm commitments.
    At the end it also comes down to passenger choices. I go out of my way to avoid flying on the 787 which I have found uncomfortable on multiple airlines due to limited space, frustrating due to absurd technical decisions (IFE and window blind), extremely noisy and an unpleasant atmosphere due to poor temperature control. I hope the A380 remains a choice for a long time to come.

  14. @kevin
    No A380 freighter. Even though the plane is substantially larger than the 747 freighter it cannot take advantage of that xtra cargo space unless someone is shipping pillows (low density cargo).

    @Lucky
    I think the 20 year future trend for big planes will be slightly slower ( .6-7M) and larger with high value fliers flying on smaller much faster planes.

  15. I’ve flown (only) 3 segments on Qantas A380. Thought the aircraft was very smooth and quiet compared to other airliners. I also appreciate A380s having 4 engines while on 10+ hour flights over vast stretches of ocean, although I realize airlines prefer [aircraft with] 2 engines for their superior economics.

    I definitely hope A380s continue to fly for the next 20 years.

  16. There’s one variable that people don’t factor in: unrest in the Middle East. If Airbus agrees to continue producing the A380 based on an Emirates order and there’s a war in that part of the world, Airbus might be stuck with frames in production for a grounded or non-existent airline. No one saw the Qatar crisis coming and people can’t assume that Dubai at some point won’t get drawn into a crisis that grounds Emirates. Geopolitical concerns are important for market analysis.

    That’s why spreading the risk factor for the A380 program was essential for its survival. At present it’s a big bird with all its eggs in the Emirates’ basket. Emirates knows this which is why they were pushing Airbus to lock in other buyers.

    The whole question of residuals on the frames etc is a nightmare scenario for Emirates.
    Whilst smaller and less technically capable airlines from some countries can manage 777s, A330s etc, keeping A380s in the air for an airline from Africa etc is a big ask, hence limited second hand market.

  17. soon or later will finish the production. The same happen with 747. Not talking just a out biz class. For companies it’s better a plane like 737. Of course A380 it’s a beast, but looking from the practical side, i don’t know..

  18. Well…. Emirates just confirmed an order of 36 new A380 worth $16b… I guess the A380 is safe for a while to come!! And I love flying the A380 (especially Emirates) so that’s good news to me…

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