- Emirates ordered 40 Boeing 787-10 Dreamliners at the 2017 Dubai Air Show.
- The airline was expected to order more Airbus A380s.Emirates is concerned that Airbus may cancel the A380 program.
- "Most operators of the A380 I've talked to are not thrilled with the performance of the A380 given the cost," Delta CEO Ed Bastian said in an interview.
Of the 318 A380 Superjumbos that Airbus has managed to sell over the past fifteen years since it began building the massive aircraft, one airline -- Emirates -- has bought nearly half.
The Dubai, United Arab Emirates-based airline currently operates 100 A380s, while no other airline owns more than 19 of the massive, double-decker aircraft that can carry as many as 800 passengers on long flights.
So when Emirates Airline opened the 2017 Dubai Air Show this week with a blockbuster $US15.1 billion order for 40 Boeing 787-10 Dreamliners, the decision to go with the sleeker, more efficient aircraft made by Airbus's rival, was a massive surprise. In fact, as Bloomberg News reporters at the show in Dubai noted -- Airbus was actually expecting to announce a deal a deal of that very size for the A380.
Even though Emirates Airline president Sir Tim Clark told CNBC on Monday that the company hasn't ruled out buying more A380s in the future, the reason he gave for going with the Boeing is particularly troubling. Emirates won't order any more A380s, he said, until Airbus can firmly commit to not cancelling the Superjumbo.
Clark's concern -- that Airbus won't keep the A380 program going -- may become a self-fulfilling prophecy for Airbus.
For most other planes, Airbus could firm up its order books and bring stability to the program by fishing for sales elsewhere.
But they can't do that with the A380. At this point, Emirates isn't just the plane's most important customers, it is effectively the plane's only customer. And that means what happened in Dubai this week could mark the end of the giant aircraft.
Airbus was not immediately available for comment.
It was going to revolutionise air travel
When Airbus unveiled the A380 in the early 2000s, it was an aircraft that was supposed to revolutionise air travel. It was to usher in a new era of luxury and comfort, with the economics to make airlines happy. We were dazzled by visions of flying casinos and stylish in-flight lounges. And the sheer magnitude of the aircraft is awe inspiring. Even though the casino never materialised, the A380 has certainly delivered on the luxury and comfort it promised.
But for airlines, the aeroplane hasn't quite delivered the financial returns operators sought.
Especially when compared to cheaper, more fuel-efficient twin-jets like the Boeing 787, 777, and even the Airbus A350.
"The A380, I'll be honest with you, has not been a wildly successful aircraft given that [Emirates] is the main operator of the plane," Delta CEO Ed Bastian told Business Insider in an interview. "Most operators of the A380 I've talked to are not thrilled with the performance of the A380 given the cost."
Even those who like the A380 recognise the economic challenges associated with operating the plane.
"If we were to fly two (236-seat) 787s tail-to-tail, the per-seat cost would be less than the (486-seat) A380," Qantas CEO Alan Joyce told us in an interview.
Qantas originally order 20 of the double deckers but decided to only take delivery of 12. According to Joyce, the Dreamliner offers the airline more flexibility and lower financial risk especially on routes with inconsistent or seasonal demand.
Is the end really here?
It's time to admit that the plane billed as the second coming of the Boeing 747 is really more than a niche product. The 747, itself, is on life support, with production rates slowed down to one plane every two months. These days, the bulk of long-haul flying is done by twin-engined wide-bodies.
The big four-engined jets are relegated to special high-density routes.
"The A380 still has a role on airports that have slot restrictions (where you can't add a second flight) or where the scheduling windows work for (a single flight) like out of Los Angeles," the Qantas CEO said.
Which means the only thing that can save the superjumbo is really airport congestion.
It's the same argument Clark has made in support of the plane.
"Airport congestion around the world is getting worse," Clark told Business Insider in 2016. "And up-gauging aircraft is a solution for this."
At the end of the day, Clark and Emirates may still order another tranche of A380s. The airline likes to keep its average fleet age around six years and some of its older Superjumbos are approaching the 10-year mark. Updating the A380 looks to be particularly pricey. For instance, Singapore Airlines just spent $US850 million for new interiors in its 19 A380s. It may simply be more economically prudent to just order new planes.
Whether that will be enough to save the A380 remains to be seen.
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