Airbus: why the A380 is approaching the final crash

Emirates is considering converting its latest order for A380s to A350 jets, and possibly A330neo. Such an operation would probably mark the end of production of the super jumbo.

An Emirates A380

Requiem for the A380? In any case, the future of the Airbus super jumbo hangs by a thread. According to Reuters and Bloomberg, Emirates has entered into negotiations with Airbus to convert its latest order for the A380 (36 aircraft) to A350 jets. This operation, if confirmed, would very likely mark the end of the A380 program. Emirates is by far the largest customer of the world’s largest commercial aircraft, with more than half of the orders (162 out of 321). At the end of December 2018, only 87 A380s remained to be delivered, of which 53 to Emirates alone. A withdrawal of the latter would make the economic equation of the program untenable: Airbus has already reduced its production of super jumbos to the strict minimum, with an expected rate of 8 A380s this year. It can hardly go any lower, except to stop production of the aircraft for good. Former Airbus super-seller, American John Leahy, warned in January 2018 that “if we don’t come to an agreement with Emirates, there will be no choice but to stop the program. ”.

What was unthinkable is no longer so. Emirates seems to have lost patience: in exchange for its last order for the A380 (20 aircraft, plus 16 optional), it wanted to make efforts on the performance and price of the engines. Rolls-Royce, for which Emirates had left its traditional engine manufacturer Engine Alliance (GE-Pratt & Whitney), does not seem to have convinced the Dubai company, which considers its engine to be too expensive and not efficient enough. Emirates has tried to return to Engine Alliance, but the engine manufacturer has “shown little enthusiasm”, according to Bloomberg. It must be said that the limited volumes of the reactors intended for the A380 do not encourage the engine manufacturers to make disproportionate efforts: most of their production of long-haul engines is done in the twin-jet segment (A350, A330neo, 777 , 787), much more dynamic.

Fragile balance

If the order for the A380 flies, it is the whole rescue plan of Airbus for its giant plane that collapses. The European aircraft manufacturer had decided to reduce its super jumbo production to the strict minimum (8 planes in 2019), so as not to burn too quickly its meager order book. The idea was to take the time to convince new customers, especially Chinese companies, to choose the device. A renunciation by Emirates would destroy this fragile balance, and could lead to the closure of the Jean-Luc Lagardère assembly line in Toulouse, where the A380 is produced. A good part of this giant building is also already used to assemble the A350, which is itself a real bestseller.

Beyond Emirates, the other A380 customers do not seem in a hurry to order again. Air France reiterated that it was not planning any additional orders, and had to increase its fleet of very large carriers from 10 to 5 aircraft. Asked at a OneWorld alliance event in London, Willie Walsh, boss of IAG, the parent company of British Airways, said he was very satisfied with the plane, but that it would take reductions “very aggressive” taken to convince him to take out the checkbook.

Pillar of the Great Emirates

Will Emirates follow through on its threats? A priori, the company has no real interest in stopping the A380 program. The device is a pillar of its fleet, in which it has invested heavily, and which is very important for its image. It is particularly suited to fuel the growth of the Emirates hub, with configurations between 489 and 615 seats. By precipitating the end of the A380, the company would also reduce the residual value of its planes, which do not need it, given the extremely limited nature of the used A380 market.

The alternative, for Emirates, would be to fall back on high-capacity jets, such as the A350 (335 to 366 seats in conventional configuration) or the future 777X (350 to 400 seats). They do not reach the capacity of the A380, but they have the advantage of being easier to fill, newer, and more fuel efficient. They would also allow Emirates to have better visibility on the future of its planes. They would also be better suited to a slowdown or even a turnaround in air traffic in the Middle East, predicted by some.

The end of the A380 would be the sad end of a program that has multiplied hard knocks. Wiring problems, incidents on Qantas and Air France aircraft engines, huge delays and gargantuan additional costs: despite its popularity with passengers, despite the technical feat of having succeeded in developing an aircraft of this size, the A380 risks remaining as the biggest commercial and financial failure in the history of Airbus.