link : Airbus to End A380 Production After Emirates Switches to A330, A350
Airbus to End A380 Production After Emirates Switches to A330, A350
Airbus and Emirates Reach Agreement on A380 Fleet, Sign New Widebody Orders
(Source: Airbus; issued Feb 14, 2019)
Despite its technical prowess, the Airbus A380 has struggled as orders dried up, but Emirates’ decision to cancel its order for 39 aircraft has convinced Airbus management to stop production after the final aircraft are delivered in 2021. (Emirates photo)
As a consequence, and given the lack of order backlog with other airlines, Airbus will cease deliveries of the A380 in 2021.
Emirates has also decided to continue growing with Airbus’ newest generation, flexible widebody aircraft, ordering 40 A330-900 and 30 A350-900 aircraft.
“As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years. This leads to the end of A380 deliveries in 2021,” said Airbus Chief Executive Officer Tom Enders. “The consequences of this decision are largely embedded in our 2018 full year results”.
“The A380 is not only an outstanding engineering and industrial achievement. Passengers all over the world love to fly on this great aircraft. Hence today’s announcement is painful for us and the A380 communities worldwide. But, keep in mind that A380s will still roam the skies for many years to come and Airbus will of course continue to fully support the A380 operators,” Tom Enders added.
The A380 will be flying for decades. We are only announcing to end production in 2021. It’s the end of the four engine plane era.
— Rainer Ohler (@roblagnac) February 14, 2019
“The A380 is Emirates’ flagship and has contributed to the airline’s success for more than ten years. As much as we regret the airline’s position, selecting the A330neo and A350 for its future growth is a great endorsement of our very competitive widebody aircraft family,” said Guillaume Faury, President of Airbus Commercial Aircraft and future Airbus CEO. “Going forward, we are fully committed to deliver on the longstanding confidence Emirates is placing in Airbus.”
Airbus will start discussions with its social partners in the next few weeks regarding the 3,000 to 3,500 positions potentially impacted over the next three years. However, the ongoing A320 ramp-up and the new widebody order from Emirates Airline will offer a significant number of internal mobility opportunities.
(EDITOR’S NOTE: In its financial statement for 2018, out this morning, Airbus said “The recognition of the onerous contract provision [with Emirates] as well as other specific provisions and the remeasurement of the liabilities have led to a negative impact on EBIT of € -463 million and a positive impact on the other financial result of € 177 million.)</i< </p>
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Airbus Scraps Production of A380 Superjumbo
(Source: Deutsche Welle German Radio; issued Feb 14, 2019)
European aircraft manufacturer Airbus on Thursday announced it will end production of the A380 double-decker passenger jet by 2021.
The Franco-German company had hoped the superjumbo would challenge Boeing's 747 and revolutionize air travel in the 21st century.
What the company said:
--Key client Emirates had informed Airbus it was cutting orders from 162 to 123 aircraft;
--That left the company with no substantial A380 backlog and no basis to sustain production.
--Shutdown costs are estimated at €463 million ($521 million) with a billion euros of European government loans forgiven
--It will still produce 17 A380s including 14 for Emirates and 3 for Japanese airline ANA.
Emirates disappointed
The Dubai-based Emirates airline is the biggest A380 customer and built its global brand around the model.
"Emirates has been a staunch supporter of the A380 since its inception," said Emirates Chairman Sheikh Ahmed bin Saeed al-Maktoum. "While we are disappointed to have to give up our order, and sad that the program could not be sustained, we accept that this is the reality of the situation."
Airbus CEO Tom Enders called the superjumbo an "outstanding technical and industrial achievement," adding that the announcement was "painful for us and A380 communities around the world."
What was the problem with the A380?
The world's biggest passenger jet started flying in 2008. The double-decker aircraft can seat more than 500 passengers. However, airlines were reluctant to commit to the costly plane and airports had to build new runways and modify terminals to accommodate it. The project suffered production delays and cost overruns right from the outset. The company was forced to restructure, costing thousands of jobs.
What effect will it have on earnings? Despite losses of €899 million ($1 billion) on the A380, Airbus on Thursday announced a 29 percent rise in profits for 2018. Net profit increased from €2.4 billion to €3.1 billion.
What happens next? The company will start talks with unions over the 3,500 jobs that could be at risk.
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