Emirates wants to drop its last five Airbus A380 orders

The Gulf airline could cut as many as half of its Airbus A380 fleet while also slashing 30% of its workforce.

By David Flynn, May 21 2020
Emirates wants to drop its last five Airbus A380 orders

Emirates is seeking to cancel five of its last eight A380 deliveries, with manufacturer Airbus pushing back because the planes are already in assembly, according to people familiar with the situation.

Dubai-based Emirates plans to take three more of the double-deckers before the end of its fiscal year next March, but doesn’t want the remaining five, according to the people, who asked not to be named as the talks are private. Airbus is proposing a deferral of deliveries or payments, the people said.

Emirates said it remains “in regular dialog with Airbus” regarding fleet requirements and doesn’t comment on commercial discussions. Airbus declined to comment, saying talks with customers are confidential.

The coronavirus outbreak has plunged airlines worldwide into crisis, with Emirates especially exposed to any long-term slump after building its business model around the world’s biggest passenger plane. The carrier has a fleet of 115 A380s and had planned to operate them through the end of the decade.

Walking away from A380 contracts without an agreement would come at a cost for Emirates, triggering penalties of up to US$70 million per plane, according to the company’s annual report.

Three of the final A380s are already built, according to planespotter websites, while wings and fuselage sections for the remaining planes are at the final assembly plant in Toulouse after being shipped in February. The jets, together with one for Japan’s All Nippon Airways, are the final ones in a program that’s due to be wound by the end of next year.

As previously reported, Emirates is already looking at accelerating the retirement of a chunk of its existing A380 fleet. That could see it stand down as many as 65 aircraft earlier than scheduled, according to one of the people.

Reporting by Bloomberg News

PREVIOUS [18 May, 2020] | Emirates is considering accelerating the retirement of its fleet of A380s and slashing about 30,000 jobs as it reduces costs and realigns its operation to cope with a travel downturn expected to last for years, according to people familiar with the matter.

The A380 was the linchpin of a strategy that made Dubai the leading hub for flights around the globe. Emirates is the biggest operator of the A380, with 115 of the double-decker jets in its fleet, and eight more due for delivery before Airbus ends production of the superjumbo in 2021.

None of the A380s are currently flying, and airline president Sir Tim Clark this month said he expects demand for airline travel to be “tempered” for at least the next couple of years, adding that "we know the A380 is over."

It's been suggested that as many of 46 of the older A380s could be stood down, with Emirates planning to mostly rely on its Boeing  777 jets during the recuperation period, said one of the people. The airline has 155 of the smaller planes in its fleet.

The Airbus A380 proved a cornerstone of Emirates' success in connecting the world through Dubai.
The Airbus A380 proved a cornerstone of Emirates' success in connecting the world through Dubai.

Emirates also holds around 200 orders for the Airbus A350, Boeing 787-9 and Boeing 777X.

However, facing a slow recovery ahead, Clark said the new jets "may not be ordered soon, they may have orders deferred and pushed back, but eventually they will come back, and they will be a better fit probably for global demand in the years post the pandemic." 

Read more: "The A380 is over" declares Emirates president

The airline could shrink a payroll that stood at 105,000 in March by as much as 30%, the deepest cuts yet in a global airline industry that’s been forced into near-hibernation by the coronavirus pandemic.

Emirates said it is reviewing “costs and resourcing” levels against projections as it prepares to resume service after an almost two-month grounding.

“No announcement has been made regarding mass redundancies at the airline,” it said in an emailed statement. “Conserving cash, safeguarding our business, and preserving as much of our skilled workforce as possible remain our top priorities.”

All of Emirates A380s are currently grounded, but barely half may return to the skies.
All of Emirates A380s are currently grounded, but barely half may return to the skies.

Emirates halted most of its passenger flights on March 25, but with some countries starting to ease travel restrictions, the airline plans to resume limited operations on May 21.

The pandemic has also forced Emirates to push back the launch of its long-awaited premium economy offering and rule out retrofitting the new seats to its older jets.

Clark has called the pandemic a black swan event for the industry, referring to a rare occurrence with extreme impact.

"If you go back to any of the major interventions, disruptions that the world has faced since the Second World War; if you took the aggregate of all of those, they wouldn’t be the equivalent to what has happened here. It’s hugely serious and it’s devastating for the business. I don’t see any way forward at the moment."

Additional content by Bloomberg

David

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.

QF

04 Apr 2014

Total posts 175

In the years to come those of us fortunate to have experienced the A380 will remember these past 10 years or so fondly....

24 Sep 2019

Total posts 14

I agree. What a great product, particularly upstairs. Sadly it is not just the A380 that will be missed but the whole travel experience in general.

01 Mar 2019

Total posts 6

Yes a sad day 2 steps forward 3 back

Comparing early 2021 flights between Singapore and Emirates from Adelaide, and Emirates offering of the 777-200LR is making me lean heavily towards Singapore.

QANTAS

11 Feb 2013

Total posts 2

Yes so disappointing. The 777 is not a patch on the A380! Having to clamber over passengers in business is not on these days! I've now tried Singapore air and love the single seats ( despite being very firm) as on Qantas. Emirates it's time to sort your business class out!

Virgin Australia - Velocity Rewards

05 Sep 2013

Total posts 54

Couldn't agree with you more.

Emirates is always be known for having a great business class service. Whilst its soft product is definitely at the top of the pack, their hard products (such as seats) has always been very dense and generic to me.

Why are all the airlines so full of gloom for travel?? I personally think it will boom again. Remember 911, GFC, SARS and previous pandemics, they surely did not stop a post boom in air travel.

I hope we learn a lot from the failures of this pandemic that we should have.

Virgin Australia - Velocity Rewards

05 Sep 2013

Total posts 54

It's more the short term that they worried about over.

The next 5 years or so there is no way that every airlines that operate the A380 will be able to fill it to capacity. After that sure it will have a rebound to 2019 levels but do you really want to be maintaining an asset for the next five years that's not going to be a profit generator?

31 Mar 2020

Total posts 13

I remember many of the flights i've had in my life, i remember well the horrible ones and the good

ones but the one i'll never forget was the time i unknowingly entered a new Emirates A380, top

floor, the luxury, the space, the comfortable seats, for once i didn't mind travelling cattle class

long haul, i'll never forget this flight, i just flew Qatar on the same route, new plane, rock hard

seats, being only 5' tall, there is no way to get comfortable and my bum nearly went numb.

I hope i can fly the Emirates A380 plane again.


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