Future of Airbus A380 hinges on Emirates order

Airbus may not feel to proceed with smaller sales without Emirates deal, the people said

Airbus is working on vital sales campaigns aimed at extending the life of its flagship A380 superjumbo, with outgoing marketing chief John Leahy seeking to secure orders by the Dubai Air Show in November.

Key to the push is a requirement for 20 jets worth $8.7 billion at leading A380 customer Emirates, with follow-on orders from British Airways owner IAG , Japan’s ANA Holdings  and Thai Airways International also in the mix, according to the people, who asked not to be named as the talks are private.

Airbus may not feel that it can proceed with the smaller sales, likely to be for five to 10 planes apiece, without the Emirates deal to bolster the programme, the people said. In the absence of new orders the company is set to pare output to less than one A380 a month, most likely sounding the death knell for the jet amid a dwindling backlog, and could detail the envisaged cut in an earnings update this week, they said.

The double-decker A380, which entered service in 2008, ranks as the world’s biggest passenger plane, seating 550 in a standard cabin layout.
 

Boeing has already said it could end production of the rival 747, where the rate has been cut to just one plane every two months so that the current backlog will last almost four years. At the same time the original jumbo is also offered as a freighter, giving it a wider potential market than the passenger-only A380.

Landing a life-extending deal for the A380 would help cap the career of Leahy, 66, who announced in May that he’d be stepping down after 23 years as marketing boss and more than $1 trillion in sales. The American remains adamant that fast-growing markets will favour the model in years to come if it can be kept going, and is holding off on his departure to focus on the Emirates talks, one person said.

Emirates is evaluating an upgraded version of the superjumbo unveiled at the Paris Air Show in June and dubbed the “A380 plus.” The design adds fuel-saving winglets, which combined with an already-announced layout revision accommodating 80 more people would shave 13 percent from per-seat costs, though Tim Clark, the airline’s president, says he doesn’t need extra berths.