Redhat72

I was a bit surprised to read the following article recently that mentions the beginning of end of Airbus A380.

http://www.bloomberg.com/news/articl...-12-as-of-2018

Few key points related to EK from the article:

- Airbus prediction was airlines would buy 1,200 supersize-planes over two decades, but has delivered only 193 A380s with 126 orders left to fill
- Emirates has ordered more than 140 of the planes and has around 80 in service
- Facing tough competition from Boeing 777 & new 778 Dreamliner indicating that demand is for higher frequencies & not high capacity airplanes

Questions:

- Did lack of demand in US and emerging markets kill the A380? Note that none of the US airlines have placed a single order with the A380
- Will this affect EK in any way? Does EK's contribution to the A380 program enough to keep this jumbo airplane survive another decade?

edy4eva

Yet another no-news article about a uninteresting fluctuation in stock's price, cloaked with baseless opinions and inaccurate information.

Statements like the following make it a painful read.
"leaving Emirates of Dubai as the only carrier to fully embrace the giant aircraft." - Not true, just look at the graph for the largest A380 customers in the same article!

"Having once predicted that airlines would buy 1,200 supersize-planes over two decades..." The estimate was almost always 500, and that was revised to 250 few years ago.

"“It won’t recover from this,” said Richard Aboulafia, an aviation consultant at Teal Group in Fairfax, Virginia. “The new rate is seriously uneconomic; therefore it will die in a few years.”" - an outrageous statement, but wait on, the A380 program isn't supposed to be perpetual to begin with. So what?

edy4eva

And I got to add, at the end of the article a reference is made that the A380 was premature by almost two decades, well if that's the case then there might be stronger and new demand for it in a decade from now, which will extend its manufacturing well into the 2030's...

edy4eva

- We are not there yet- killing the A380.
- The A380 with EK is here to stay until the end of the 2020's at least (based on a 12 year service cycle). And if EK ends up letting go of the A380 on its key routes, they will have to double up on frequency for each frame replaced- and that is a lot of airplanes to be ordered, not to mention an inflated cost base in procurement, HR, maintenance etc.

Redhat72

Well, if you look at the orders for A380, they have declined considerably for the past few years

2013 - 50
2014 - 20
2015 - 3
2016 - 0

The orders for A320 & A330 combined has gone up.

I wish the A380 stays as I really like the plane but numbers seem to indicate that it is not popular enough with other airlines except for a few.

The brings up another question - what makes A380 so popular for EK? Why so many orders? Is there really the demand? Just trying to understand the company's vision when it comes to investing in a high capacity commercial airplane when others still prefer the regular ones.

77W_12A

I wonder the same myself. On a route such as DXB-HKG, they run 4 daily. One via BKK. Three out of the four flights are operated by A388. The morning out of HKG is a 77W.

They must be doing something right.

avcritic

Based on firm orders and production rate estimates it will be in production until 2020.

EK hasn't invested in A380. Lessors invested in A380s and EK is just leasing from them. EK sold the dream to lessors and their investors.

If lessors are not able to find new homes for lease returns, all they can do is increase lease rate factor on brand new leases to EK.

Redhat72

Apparently, Sheikh Ahmed bin Saeed, the chairman of Dubai Airports and Emirates Group is not happy. With so much vested interest in A380, Mr. Ahmed wants Airbus to sell more A380s.

http://www.thenational.ae/business/a...rates-chairman

DYKWIA

EK want a NEO A380... but Airbus aren't keen unless there's interest from other customers.

iRobert

In the end it will always be a question if Emirates can fill them up yes or no, if they cannot expand the routes for the A380 because of the lack of demand they will not purchase (lease) anymore then the ones to replace old ones.

NOIR

Maybe EK should use reverse physiology by showing Airbus intent to differ the remaining order to another type like the A350-900, and cancel the remaining deliveries. Any way they are evaluating the 359 vs the 7810, so use the resources to purchase the 359, and seriously look at what they can do with a potential 777-10. The additional stretch on the 770-10 could add a lounge/bar, and maybe showers.

Now that should put a shiver down Airbus's spine.

Anyway EK are noticing an over supply in the market, and it will only get more saturated in the future. The only real hit they would take is Heathrow, but then what's to say they can't purchase more slots.

skywardhunter

Huh?

NOIR

Oh well

avcritic

EK already tried all the tricks in the book and Airbus didn't bite. They said no to A380NEO.

Even if EK cancels all pending orders Airbus's risk is limited to 40 frames. Take onetime charge and move on with other projects. They need to focus on A320NEO and A350. A330 also doing good.

A380 is a news maker not money maker.

NOIR

I'm just basically trying to say is if Airbus won't do the NEO then move on, that's all. It's not the end of the world. Usually when an airline tells the manufacturer I'll order a few hundred of your air frames the manufacturer rubs their hands in joy. I've never seen a scenario such as the SJ where the manufacturer backs off from a mass order because they could really lose money.

It's like a high end hooker refusing a high paying customer because they have some sort of disease.