The Emirates Deal That Saved The A380 May Be In Jeopardy

At the beginning of the year Emirates gave the A380 a new lifeline. For years it had looked like production of the A380 would end, given that the plane hadn’t worked out the way Airbus had hoped, with very few new orders in the past few years.

Emirates loves the A380, and has over 100 of them in their fleet. They’ve been able to use the A380 to scale their operations in a way that no other airline has. Other airlines have instead opted for the 787 or A350, which are smaller aircraft that are easier to fill.

At the beginning of the year Emirates signed a memorandum of understanding to acquire 36 additional Airbus A380 aircraft, including 20 firm orders and the option for 16 more. The deal is valued at 16 billion USD based on list prices, though I think it’s safe to assume that Emirates got significant discounts.

Anyway, while this deal sounded like a sure bet, it looks like it may unfortunately be in trouble.

Bloomberg is reporting that an impasse has been reached regarding the engines of these newly ordered A380s. People familiar with the matter say there have been drawn out talks regarding the price and fuel burn of Rolls-Royce engines that are already falling short when it comes to performance parameters.

This has caused a missed deadline that could delay the first delivery past 2020, or worse, could possibly lead to changes to the order.

What’s interesting here is that Emirates doesn’t actually have another option for the A380 engine anymore. When Emirates first started taking delivery of the A380 they used engines provided by a joint venture between General Electric and Pratt & Whitney.

But then they made the switch to Rolls-Royce a few years ago, and now General Electric and Pratt & Whitney aren’t interested anymore, having turned their focus to other programs instead (which makes sense, given how few A380s are in production anymore).

So I guess we better hope that Emirates, Airbus, and Rolls-Royce can work together to find an acceptable solution, or else the future of the A380 may once again be in trouble in the near future.

(Tip of the hat to Scott)

Comments

  1. RR has had it issues of late some troubling. Their even having engine issues with their engines in military non flying applications. As a AF I always felt safe when seeing the RR on the cowlings not so much anymore

    A once great engine maker now having reliability issues.

  2. @lucky – I just heard that Cathay is taking the A350-1000 off the Washington Dulles route (just a few weeks after their launch). Instead their moving it to their SFO flight and making the Dulles flight an A350-900 as of November

  3. RR screw-ups single handedly killed the L-1011, one it’s time best airplane, both from technology and beauty point of view. Now they will kill the A380 too.. congrats

  4. I have heard Emirates needs the order more than Airbus does. If the A380 production line doesn’t stay open, then the existing fleet value will fall considerably due to the end of the line of the plane type. If this dynamic is indeed the case, EK will find a way to work it out with RR.

  5. I think Emirates will have to keep this order because if Airbus stops production of the a380 then Emirates will have to purchase hundreds of replacement aircraft.

    Rolls-Royce seems to be really struggling lately.

  6. RR needs to develop a new high by-pass engine line-up instead of tweaking the RB211 from the 70s. This engine killed the L-1011 TriStart too….

    Better stick to the GP

  7. Marcus and AsTheCrowFlies, EK don’t own the aircraft, some or other leasing company does, so value of aircraft isn’t the biggest of their concerns, though replacement parts would be. As to needing the order, it’s 30 aircraft, their existing fleet isn’t going to disappear and they already have orders for several hundred 777X and 787s so they’re not running out of aircraft. I actually think EK would love to get out of it, and blaming it on RR might be convenient to both Airbus and EK as a way to end the deal, while Airbus got the positive publicity from the deal initially

  8. Marcus – No they won’t… The existing A380s can continue operating even if they stop making new ones.

    Asthecrowflies – what value? Airlines don’t want the A380. Malaysian struggled to get rid of their 6 planes and gave up in the end. Emirates are never going to find decent buyers for over 100 of them, regardless of whether it’s still in production or not.

  9. So leave RR and revert back to the GP7200? RR faces quite the headwind going forward. With the Trent family problems, development of the Pearl, and Brexit doing heaven knows what to their supply chain? Yikes

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