Vapor passes over the wings of an Airbus A380 as it performs a demonstration flight at the Paris Air Show in 2015. (AP Photo/Francois Mori, File)

Vapor passes over the wings of an Airbus A380 as it performs a demonstration flight at the Paris Air Show in 2015. (AP Photo/Francois Mori, File)

Emirates orders 20 more Airbus A380 jumbos, saving program

The Dubai carrier also has options to buy 16 more. The program seems safe until 2029.

By Christopher Jasper and Benjamin Katz / Bloomberg News

Airbus pulled its flagship A380 superjumbo back from the brink with a follow-up order from Emirates, giving the giant jet a new lease of life days after the planemaker floated the possibility of killing it off amid slack demand.

The Dubai-based carrier, already the biggest A380 customer, signed an outline agreement for 20 of the double-deckers with an option to buy 16 more, worth a potential $16 billion at list prices, it said Thursday, handing Airbus the first orders for the model in more than two years.

The purchase will extend A380 production until 2029 if Emirates takes all of the planes, according to Airbus, which as recently as Monday had acknowledged that the program could be terminated without a new sale soon. The carrier had scuttled a deal for the same number of aircraft toward the end of last year amid doubts about the manufacturer’s dedication to improving the plane.

“This new order underscores Airbus’s commitment to produce the A380 at least for another 10 years,” John Leahy, the Toulouse, France-based company’s outgoing sales chief, said in a statement. “I’m personally convinced more orders will follow Emirates’s example.”

The new aircraft will be delivered from 2020, with engine options still under evaluation. Rolls-Royce Holdings Plc is supplying turbines as part of Emirates’s most recent order for 50 A380s, while the Engine Alliance of General Electric and Pratt & Whitney powered the previous 90.

If Emirates signs off on the full deal it will have committed to a total of 178 A380s, or more than half of all orders for the plane worldwide. The carrier currently has 101 superjumbos in its fleet, and many older aircraft will have been phased out before the new batch arrives.

Airbus’s failure to land the order in November at the Dubai Air Show left the manufacturer red faced, with Emirates pulling out just minutes before an announcement was due as dignitaries were gathering for the event. Salvaging the deal will be especially important to Leahy, allowing him to deliver a final coup before standing down as sales supremo next week.

The planemaker and airline have developed an almost symbiotic relationship around the A380. Emirates has given the superjumbo a public profile it would otherwise have struggled to attain, while the 550-seat jet has enabled the carrier divert a significant proportion of global traffic via what’s a natural global crossroads but which was for so long an aviation backwater.

For Airbus the deal will avoid an early shutdown of its most prominent program, the oldest examples from which are barely 10 years old. The company is also keen to keep the A380 going in anticipation of the global travel market favoring bigger planes in years to come as the number of people flying climbs and runways become more and more crowded.

Emirates Chairman Sheikh Ahmed bin Saeed Al Maktoum, who signed the deal with Leahy in Dubai, said is company will now work with Airbus “to further enhance the aircraft and onboard product.”

The option component of the order may give Emirates leverage to press for enhancements possibly up to a re-engined version of the plane, Jefferies International analyst Sandy Morris said in a note. The Gulf carrier previously dangled the possibility of as many as 200 orders if Airbus agreed to develop the new engine option or Neo, only for the manufacturer and Rolls-Royce to push back against the proposal.

A spokesman for London-based Rolls said it welcomes the opportunity to “be selected again by Emirates,” while declining to comment further.

As of the end of last year, Airbus had a total of 95 unfilled A380 orders, though only 48 of those, the vast bulk from Emirates, can be regarded as credible, according to Morris. Orders from carriers including Virgin Atlantic Airways Ltd. and sat on the books undelivered for years.

More in Herald Business Journal

Boeing asks that its big state tax break be suspended

The company hopes the move will resolve a trade dispute involving European rival Airbus.

Boeing finds debris in wing fuel tanks of several 737 Maxs

The company did not say what the objects were found, but one report said they included tools and rags.

Charge: Lynnwood tobacco smuggler dodged $1 million in taxes

The man, 57, reportedly dealt in illicit cigarettes. Tax returns claimed he sold hats and T-shirts.

Some dissent emerges on new engineering contract with Boeing

“This is being shoved down our throats,” said one SPEEA council rep.

FAA faces dilemma over 737 Max wiring flaw that Boeing missed

The vulnerability could lead to an emergency similar to the one that brought down two jets.

Everett’s new passenger terminal gets some national love

Paine Field was voted 8th-best among a selection of small airports, some of which aren’t all that small.

United pushes back expected return of grounded Boeing planes

United, Southwest and American are bracing for a second straight summer without their Max planes.

US manufacturing output hit by Boeing troubles, slips 0.1%

Excluding the production of airplanes and parts, factory production rose 0.3%.

Boeing and engineering union agree on new, extended contract

The board of SPEEA will recommend the proposal to its 18,000 members in the Puget Sound area.

Airbus CEO sees no short-term benefit from Boeing Max woes

The European planemaker’s competing A320 is sold out through 2025.

Virus outbreak in China poses a new problem for Boeing

A number of deliveries are ready for Chinese customers who “cannot come to Seattle to take delivery.”

Boeing wins zero orders and delivers just 13 jets in January

Airbus by comparison had a big order month, winning net orders for 274 commercial aircraft.