Emirates Airlines stated on Thursday that it has banged a $16 billion contract to purchase 36 Airbus A380 superjumbos just days after the European manufacturer mentioned it would have to stop production without new orders.
The company stated that it had placed firm orders for 20 of the double-decker aircraft with options for a further 16. Deliveries are planned to begin in 2020.
Emirates is already the world’s largest customer for the A380 with 101 in its fleet and 41 more firm orders earlier placed.
Sheikh Ahmed bin Saeed Al-Maktoum, the airline’s chairman and CEO mentioned, “This order will provide stability to the A380 production line.”
He also said in the statement, “We’ve made no secret of the fact that the A380 has been a success for Emirates.”
Additionally, he said, “Our customers love it, and we’ve been able to deploy it on different missions across our network, giving us flexibility in terms of range and passenger mix.”
The Dubai-based airline mentioned that with the new order it will have agreements for a total of 178 A380s worth $60 billion.
The contract was expected to be signed during the Dubai Airshow in November but was retarded without any explanation amid reports of difficult negotiations.
Instead, Emirates signed a contract to purchase 40 Boeing Dreamliners for more than $15 billion.
Airbus’s decision in 2007 to obtain the A380, capable of packing in 853 seats, was diametrically opposed to Boeing’s bet on the Dreamliner, marketed as a more efficient plane that could be used for both medium and long-distance flights.
But the economics of the four-engine A380 have proved daunting, with airlines having to work every flight at full capacity in a way to make a gain.
Airbus alerted on Monday that it might have to stop production of the A380, having booked no new orders for the plane in two years.
It mentioned that it regarded Emirates as the only airline with the capacity to place an order of the size needed to keep production in progress.
John Leahy, Airbus sales director mentioned, “Quite honestly, if we can’t work out a deal with Emirates there is no choice but to shut down the programme.”
The company stated that it required to construct at least six of the aircraft every year for the programme to stay viable.
On Thursday, Leahy seemed relaxed that Airbus’ plans of staring down Emirates appeared to have paid off, stating the programme was now good to go on for at least another decade.
Leahy mentioned, “This new order underscores Airbus’ commitment to produce the A380 at least for another ten years. I’m personally convinced more orders will follow Emirates’ example and that this great aircraft will be built well into the 2030s.”
Airbus is believing China will lead a revival in orders once demand for long-haul planes picks up, arguing that the plane is ideally capable for mass-market travel and for heavily congested airports.
Emirates works on a fleet of 269 wide-bodied aircraft and travels to 157 destinations. Airbus stated it has produced 222 A380s to 13 airlines so far.
Stock market investors welcomed the news of the order, pushing Airbus shares more than two percent larger on the Paris bourse in mid-session business.
Calling the contract “a relief for Airbus”, independent commercial aviation expert John Strickland sttaed it probably saved the A-380 programme.
Strickland mentioned, “Without it, production would likely have been terminated.”
He even said, “It is not a guarantee of financial success for the programme but buys Airbus time to go out and secure additional orders from other airlines.”
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