Airbus said Monday it will stop making the costly A380 superjumbo if it can't strike a long-term deal with the airline Emirates for a steady supply of the planes.
Airbus said Monday it will stop making the costly A380 superjumbo if it can’t strike a long-term deal with the airline Emirates for a steady supply of the planes. Abandoning the A380 would be a disappointing defeat for Airbus, which spent many years and many billions developing the double-decker behemoth, even as skeptics questioned the whether it could generate enough demand to justify its cost and the bigger runways it requires. Airbus chief salesman John Leahy told reporters Monday, when Airbus otherwise reported a record number of overall plane deliveries for 2017, that “if we can’t work out a deal with Emirates, there is no choice but to shut down the program.” He said the Dubai-based airline is “the only one who has the ability” to commit to a minimum of six planes a year for a minimum of eight to 10 years, which Airbus needs to make the program viable. Emirates, the government-owned, Dubai-based long-haul carrier, declined to immediately comment. The A380 drew worldwide attention when launched a decade ago but has always struggled to win enough customers.
Airbus delivered just 15 of the planes last year, and aims to deliver 12 more this year and could scale down production to six per year after that, CEO Fabrice Bregier said. Emirates now relies solely on the Airbus 380 and the Boeing 777 for its flights, making it the largest operator of both. It has over 160 Boeing 777s in its fleet today and took possession of its 100th A380 in November. Reports circulated before the Dubai Air Show in November that a major A380 sale would be coming. Instead, however, Airbus employees found themselves attending a news conference where Emirates announced the purchase of 40 Boeing 787-10 Dreamliners in a $15.1 billion deal. The air show ended without an A380 deal, throwing the line into question.
Monday’s announcement came as Airbus said it sold 1,109 planes year, outstripping the 912 commercial planes sold by rival Boeing thanks to a raft of end-of-year deals, a growing global economy and travel demand. The planemaker, based in Toulouse, France, reported Monday that it delivered 718 planes in 2017, fewer than Boeing’s 763 but still a record for Airbus. Bregier said Airbus will speed up production in the coming year, notably of its long-delayed widebody A350, and hopes to out-deliver Boeing by 2020.
Bregier, who’s being replaced next month by Guilaume Faury as Airbus overhauls its top management, acknowledged “challenges” ahead but called them “manageable.” Airbus is facing multiple corruption investigations, notably in Britain, France and Austria.