View Full Version : EK Aims at 120 A380s
Just found this news tidbit on an American website. Looks like the A330/340 pilots will have more A380 seats available to them. Where will they put all of these airplanes? How many airports worldwide are even capable of handling A380s? Interesting news about EK working with Boeing to potentially develop a next-generation 777.
Market Movers
Emirates eyes 120 A380s, works with Boeing on 777
Tue, Oct 12 10:56 AM EDT
DUBAI, Oct 12 (Reuters) - Dubai carrier Emirates [EMIRA.UL], the Arab world's largest airline, aims to have 120 Airbus (EAD.PA (http://us.mobile.reuters.com/quoteSearchResults?symbol=EAD.PA)) A380s when new airport space is available and is working with Boeing (BA.N (http://us.mobile.reuters.com/quoteSearchResults?symbol=BA.N)) on the next generation of 777 jets.
Emirates, whose passengers are growing at 20 percent annually and expects to maintain this level for the next five years, will fulfill all its 90 orders so far for the A380 superjumbo, President Tim Clark told Reuters in an interview. "We would like some more but we are going to run short of space," he said. "120 was the baseline figure that the planners worked to get where we needed to be, but we couldn't order that amount because it was too many for here so 90 was a compromise."
The carrier will order more when it gets additional space at its home base in Dubai, he added. The target implies a future Emirates order for 30 of the world's largest airliner, worth $10 billion at list prices, at an unspecified date. If the airline went ahead with its growth plans it would have an A380 fleet worth over $40 billion.
Emirates, already by far the biggest customer for A380, announced a record $11 billion order for 32 superjumbos at the Berlin Air Show in June.
At July's Farnborough Air Show, Emirates also ordered 30 Boeing (BA.N (http://us.mobile.reuters.com/quoteSearchResults?symbol=BA.N)) 777-300ER wide-body planes, a deal worth potentially more than $9 billion. [ID:nWEA0008]. Clark said the airline is collaborating with Boeing to find a solution for the manufacturer's wide-body 777 aircraft, but said he could not share more details.
"We are working with Boeing on the next generation of 777. We are still very interested in a replacement," he said. Boeing has said it is looking at the future of the aircraft which faces competition from the future Airbus A350-1000. (Reporting by Tamara Walid; Editing by Tim Hepher)
Sataybox
13th Oct 2010, 06:38
using the very latest technology and tweaks to ensure they cost less
Very amusing. The 2nd Class EFB is an example of the "latest technology"? Maybe it was a mis-quote of "lowest" technology...
Why doesn't this reporter comment on the fact the Crew Rest Compartments on all these new aircraft are all ripped out and relocated at the farthest point away from the cockpit????
ferris
13th Oct 2010, 06:50
This article has taken the same info, but takes a slightly different tack. Emirates challenges rivals, aims for 120 A380s (http://www.theage.com.au/travel/travel-news/emirates-challenges-rivals-aims-for-120-a380s-20101013-16ihz.html)
It also mentions "export credits", and the efforts by EK's competition to have them stopped, as they give EK an unfair advantage. In all the 'unfair advantage' arguments I've seen, I've never heard this mentioned before. I can only assume these credits are used to pay air nav charges etc. Anyone know?
Wizofoz
13th Oct 2010, 06:59
Why doesn't this reporter comment on the fact the Crew Rest Compartments on all these new aircraft are all ripped out and relocated at the farthest point away from the cockpit????
Possibly because it is completely irrelevent to the point of the article?
The Class 2s don't increase the fuel burn, and the weight saving from removing the forward CRC reduces it.
I'd rather good class 3s and a decent crew rest also, but why would you think it would be of interest in an article about the ecconomics of the aircraft?
one observation on the main thrust of this article , look at the age of the classic 777 fleet, 332/343 fleet. Still quite a big chunk of the airline and not shiny new and all being maintained in house. Dont think the MAJORITY of them are being retired in the near future .
fatbus
13th Oct 2010, 11:17
68 to be retired within the next few years
Guy D'ageradar
13th Oct 2010, 12:54
It also mentions "export credits", and the efforts by EK's competition to have them stopped, as they give EK an unfair advantage. In all the 'unfair advantage' arguments I've seen, I've never heard this mentioned before. I can only assume these credits are used to pay air nav charges etc. Anyone know?
Can't comment specifically on that but it's interesting that noone has yet commented on how much (sic) they pay in air nav charges at their home base!
Level playing field my a*&e. :hmm:
Wizofoz
13th Oct 2010, 16:15
Can't comment specifically on that but it's interesting that noone has yet commented on how much (sic) they pay in air nav charges at their home base!
They pay the same as everyone else.
TwinAisle
13th Oct 2010, 17:40
Nothing to do with nav charges. Export credit schemes are sources of finance or financial guarantees that are set up (usually) by governments or quasi-governmental organisations to mitigate the risk of an export being made, especially for big ticket items.
This can enable the exporter to take the risk at a lower than market rate, and hence enables the export to happen at a lower cost. This was especially important when EK was trying to finance aircraft at a time when Dubai was looking rather wobbly financially - Airbus were not that keen to start cutting metal and buying expensive kit (SFE) for aircraft that were going to a country with what looked like a major debt problem.
The argument being put forward in this case is that EK's (and other) transactions have been heavily supported by ECG, hence the charge of "unfair subsidy". The European carriers are getting upset since they can't get ECGs on Airbus - since the finished aircraft are not being exported from Europe, if you see what I mean. Moving a new A380 from TLS to FRA, CDG or LHR, for AF, LH, VS or BA, is NOT an export.
Absolute minefield of corporate finance law this. I'm glad I don't get paid to stress over the minutiae of this....
TA
EK could certainly be viewed as a competitive threat with all of this new capacity coming online with the A380s. That said, we Europeans also benefit from the jobs created by the A380 production line (thousands of suppliers and probably tens of thousands of jobs, etc.). It's a tough line to walk - we need EK to maintain or grow aerospace jobs but we don't want them to use our products AGAINST US....
Kalistan
13th Oct 2010, 21:03
The high density A380s make good sense like the slave ships that took the poor Africans to the new world and Europe; only this time the modern day slaves from the subcontinent and SEAsia to the sandpit.
ferris
14th Oct 2010, 10:15
The argument being put forward in this case is that EK's (and other) transactions have been heavily supported by ECG, hence the charge of "unfair subsidy". Thanks for the info, Twin Aisle.
How does this translate into an advantage? I gather, from what you are saying, is that the manufacturer gets the advantage, and that translates into a saving for EK (etc.) ie. they pay less for the same aircraft? I am aware of this happening in other industries, causing mayhem (eg. battery manufacture in Australia basically ceased after the lead mined in oz was sold to foreign battery manufacturers much cheaper than to Australian manufacturers because of export subsidies. Effectively, the government paid foreign competitors to kill off one of it's own industries). If so, i can understand some airlines being upset about the situation.
TwinAisle
14th Oct 2010, 18:14
You're most welcome, Ferris.
In essence, you are correct. Buying and selling airliners is rather more complex than selling a car, and all parties to the deal will look at all the costs, taxes, risks etc in toto. Sellers will take a view on how likely they are, when the buyer signs, for the deal to complete - remember that airliners are ordered in many cases years prior to delivery, and the manufacturer will commit considerable expenditure to making the aircraft - and even though the buyer will make PDPs (pre-delivery payments - stage payments if you like) they are still exposed.
What worries manufacturers is - Airline X has ordered five 777s. Value, $1Bn. By committing to make them, they are taking a risk that the backers of Airline X may walk away/go broke etc, leaving the manufacturer with uncovered risk. So they take that into account in the deal. If you have ECGs helping, these risks can be contained, and this reduces the overall deal cost to all parties.
What is irking the European carriers is that they can't get ECG on Airbus products. They could however get it on Boeing products.... assuming that their governments were as 'helpful' as other governments. So at least to some extent they are crying wolf. When did BA last take an Airbus that would be put on a route against EK, for example?
TA
ferris
14th Oct 2010, 18:43
So they take that into account in the deal. Surely export credits only bring a large risk back to the level of risk that exists for solid, local customers? ie. EK ordering 90 A380s receive an export credit (basically a govt guarantee), yet Lufthansa making an order for, say, 10 airframes carries less risk and therefor they don't get a 'credit'. All the EK credit is doing is balancing a negative- how does that translate into an advantage? It just removes an element of risk that would've made an EK purchase more expensive than an LH one. Am I reading this correctly?
If so, it does seem like a bit of 'wolf-crying'.
TwinAisle
14th Oct 2010, 18:50
Devil's in the detail....
Some of EK deal ECG comes from the private sector, some doesn't.
How do you quantify risk? How much is that risk worth? This is where all the corporate finance people will be sharpening their pencils, and ordering their new Aston Martins, dreaming of the fees.....
It may - or may not - be the case that certain carriers are being massively helped by ECGs that are well in excess of the real risks. Others may have governments that don't see things like that. If you see what I mean....
Beyond that, I dare not comment.... :E
TA