Airbus’ (EADSY, Financial) super jumbo A380 has attracted plenty of attention in recent times. The super large aircraft’s biggest customer Emirates’ has been requesting the European plane maker to reengineering the plane. But Airbus had been very hesitant to upgrade the plane due to lack of demand. There were fears that Airbus might stop the production of the plane. However, the top bosses of the company alleviated this fear staying that they will continue offering this plane in the market in future.
Campaigning hard to stay on
Airbus has been in two minds in recent times. Just the way it was confused regarding whether or not to upgrade the A330, it is confused regarding the A380 as well. The airplane has failed to appeal to the airlines owing to the timing of its service entry in 2007, which was just before the global economy financial meltdown. Also operators were looking for less fuel consuming twin engine jets instead of flying the four engine plane. Even Boeing’s (BA, Financial) 747 is facing a similar problem with thin backlog and no new orders.
Airbus A380, Picture taken from Airbus
Emirates has been one of the most important customers for Airbus. Since the time the A380 entered service, Airbus received total orders of 318 units for this aircraft, of which orders for 140 units have come from Emirates. Recently Harald Wilhelm, finance director of Airbus, said at the investors’ conference held in London that the A380 project is scheduled to break even in 2015 and remain stable through the next three years. However, he said whether the company will continue the project thereafter or decide to upgrade is a point of consideration.
It’s not over yet
Definitely such a remark that raised doubts regarding the continuation of the project was not appreciated by Emirates as it had requested Airbus to upgrade the plane so that it could order more. The airline’s chief executive CEO Tim Clark gives confirmation that Emirates has greater appetite for the A380 and would undoubtedly order for around 70 units of the reengineered plane, if the company decides to fit new engines. Airbus’ chief executive officer Fabrice Bregier, mellowed down concerns regarding the discontinuation of the plane. He said:
“We will one day launch a 380neo, we will one day launch a stretch. This is so obvious there is extra potential. We will get more customers”
This conveys the message that Airbus does not want to annoy its priciest Gulf customer. It may want to look into avenues to add new engines to the plane and attract more order from Emirates as well as other airlines. Company chief operating officer John Leahy confirmed that the company has been trying to market the jumbo jet and is negotiating with various airlines to bag orders. Emirates has all through been very supportive to Airbus’ A380 program. It continuous to encourage the jet maker to continue the plane as demand for supersized planes is going to rise in future as passenger traffic is estimated to double to 7 billion people in the next 10 years. To serve so many passengers, airports and airlines would require giant sized planes like these.
Presently Airbus is studying the possibility of putting new engines to the plane and is in talks with Emirates’ preferred engine maker, Roll Royce. According to a source, Rolls Royce is weighing a variety of options, and one of it is the derivative engine of the one used in the highly anticipated A350 XWB. Rolls Royce declined to remark on being asked to give an update regarding the A380.
A solid order from Emirate and expectations of orders from other airlines as traffic is predicted to double are the driving factors, driving Airbus to go for an upgrade. The A380neo is awaiting almost certain to come and is awaiting a formal announcement. It’s just a matter of time.
