EK orders 32 more A380's(Merged)
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DATE:14/06/10
SOURCE:Flight International
Why Emirates chose ILA to reveal big A380 deal
By Murdo Morrison
Why did Emirates announce its massive A380 order at ILA rather than the higher-profile Farnborough air show next month? That was a question many were asking at an event that has been seen in the past as a rather parochial get-together for German industry.
There were two reasons. While the Dubai-based airline is already comfortably ensconced in the UK market, it is desperate to secure more lucrative German routes, including Berlin, where the regulatory and political environment is not so welcoming to potentially dominant foreign carriers.
Despite the temptation to delay the announcement to July, Emirates bosses figured the opportunity to impress German media and ministers, including Chancellor Angela Merkel, was too good to pass over.
Airbus parent EADS is also by far the biggest exhibitor at ILA, and through its influence with German trade association BDLI, in effect underwrites the whole event. The European giant was delighted to dominate the headlines at what it regards, with Paris, as one of its two home shows.
SOURCE:Flight International
Why Emirates chose ILA to reveal big A380 deal
By Murdo Morrison
Why did Emirates announce its massive A380 order at ILA rather than the higher-profile Farnborough air show next month? That was a question many were asking at an event that has been seen in the past as a rather parochial get-together for German industry.
There were two reasons. While the Dubai-based airline is already comfortably ensconced in the UK market, it is desperate to secure more lucrative German routes, including Berlin, where the regulatory and political environment is not so welcoming to potentially dominant foreign carriers.
Despite the temptation to delay the announcement to July, Emirates bosses figured the opportunity to impress German media and ministers, including Chancellor Angela Merkel, was too good to pass over.
Airbus parent EADS is also by far the biggest exhibitor at ILA, and through its influence with German trade association BDLI, in effect underwrites the whole event. The European giant was delighted to dominate the headlines at what it regards, with Paris, as one of its two home shows.
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Leading Seaman Stains, think of how many more ****-holes there are in Africa. Then there's a billion Chinese.
Lots more cities in N. America too. Loads of indians in Vancouver all wanting-wanting to go home.
Lots more cities in N. America too. Loads of indians in Vancouver all wanting-wanting to go home.
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Here's the latest from Flight Global, follow the link or read it below:
New A380 deal part of long-term strategy for ?measured growth?: Clark
New A380 deal part of long-term strategy for “measured growth”: Clark
By Max Kingsley-Jones
Emirates gave the Airbus A380 a major shot in the arm last week, placing the biggest single order ever for the superjumbo with a deal for 32 aircraft. The airline's chief executive Tim Clark dismissed cynicism from certain quarters about the deal, which takes the airline's orders for the 500-seater to 90 aircraft, saying that it simply reconfirms its successful strategy of "measured, staged growth".
The Dubai carrier signed the $11.5 billion firm order at last week's ILA show in Berlin, where it had also just taken delivery of the 10th of 58 Engine Alliance GP7200-powered A380s from its existing orders.
Clark says that the deal for 32 additional A380s, which will also be GP7200-powered, "has been in the making for a long time" and is "simply an extension of the growth strategy which have been doing successfully for quite a number of years".
Deliveries will begin shortly after the last of the current batch arrives in January 2015, says Clark: "The 32 will be delivered between April 2015 and November 2017.
The decision to expand the Emirates A380 fleet to 90 aircraft over the next seven years is part of the airline's strategy to ensure "we have the delivery slots we want at the time that we want, to allow us to grow at the pace that we want to", Clark says.
"When the going gets good again, if we haven't placed our orders and bagged the positions for the aircraft that we want to do the job then we'll be behind the curve when everybody else is doing it."
The airline is operating the 10 A380s already delivered to destinations across its network, including to key points in Europe, North America, Asia and Australasia. Clark says that as the airline's traffic and network grows the double-decker will be deployed to more destinations in these regions, replacing existing widebodies, and also to increase frequencies.
The size that Emirates'A380 commitment has grown to now raises a few eyebrows, but Clark uses a simple utilisation calculation to justify it: "When we send an A380 to the US East or West Coast on a daily basis, I lose 2.5 aircraft. If I go there twice a day that's five aircraft, so you've only got to do six destinations on a double-daily frequency on 14.5h missions and those 32 aircraft are gone."
He also points out that the airline will begin a phase-out in February next year of around 68 of its older widebodies, including A330-200s, A340-300/500s and Boeing 777-200s. These aircraft will be replaced by the larger 777-300ER, and the A350 XWB which is on order, as the A380s arrive and succeed those big twinjets on denser routes.
The A380 order, which is the first for the superjumbo in 2010 and comes after several years of slow sales, has met with criticism in some quarters with observers querying the logic of Airbus's over-reliance on one market for A380 sales.
"From Emirates' viewpoint, it might just be win-win. They'll almost certainly get walk-away rights, so the worst-case scenario is a cancelled order," says Richard Aboulafia, vice-president analysis at Teal Group.
"Best case is better market access, and a lot of heavily discounted capacity with which to take advantage of this access. But even then it's impossible to imagine an expansion plan that absorbed 90 A380s before 2026, especially given all their other order positions."
But Airbus chief executive Tom Enders says the benefits of having so many A380s earmarked for one carrier outweigh the business risks. "There is always a risk in this sort of exposure, but if you see how Emirates operates, it has one of the best managements in the world. Their strategy is not built on sand. They see chances where others see risks. So I don't think we have too many eggs with a weak customer, as Emirates have demonstrated [by emerging quickly from] this crisis."
He adds: "Industrially it is much better than selling four A380s here and six there, with each one differently customised. Of course, it is easier for us to have bigger orders with fewer customers."
Although Emirates was a launch customer for the A380, its first commitment was for just seven aircraft (plus five options) and the growing success of the superjumbo at the airline has come as a relatively recent surprise to Airbus. Until 2005, the airline's Dubai hub was notably absent from the list of top 10 superjumbo hubs in Airbus's 20-year global market forecasts - it then went straight in at number six.
However Enders says that A380 was developed very much with the Middle East and Asia in mind. He sees Asia as the bigger opportunity now, as this Emirates order probably represents one of the final big commitments from that region. "I think we have exploited that market already".
He believes the Emirates commitment will prompt rivals to reconsider their fleet strategy. "Some of the blue-chip airlines will have to think 'Are we getting it right and Tim [Clark] is getting it very wrong. What will the world look like when Emirates has 90 A380s?'."
Although Airbus's A380 product-marketing chief Richard Carcaillet acknowledges that the industry is not used to seeing orders of this size for very large aircraft, he is convinced more customers will follow the Emirates lead: "I have no doubt we'll see a number of airlines with fleets of this sort of size in the medium to long term."
But Aboulafia points out that as Emirates is not growing with traffic that is organic to Dubai, its huge deal could hurt other potential A380 customers. "Much of Emirates' traffic has been siphoned off from Europe's legacy carriers. Europe appears willing to let Emirates poach this traffic in order to save the A380. Since the A380 seems to have exactly one big fan (whose enthusiasm has been overstated) letting Emirates grow at European carriers' expense might be the only way to generate demand for this airplane."
Speaking a month before the Emirates deal, Airbus's chief salesman John Leahy doubled his earlier estimate for the minimum number of new A380 orders in 2010 to "at least 20". But Aboulafia says if this deal constitutes that forecast, it "raises troubling questions about this programme, particularly if ILFC cancels its orders. It has been a very long time since they've secured new A380 orders, or a meaningful commitment from someone new."
However Carcaillet says that Airbus is currently engaged in A380 sales campaigns with at least three potential new customers for the type, although he is non-committal whether any more deals could materialise this year.
New A380 deal part of long-term strategy for ?measured growth?: Clark
New A380 deal part of long-term strategy for “measured growth”: Clark
By Max Kingsley-Jones
Emirates gave the Airbus A380 a major shot in the arm last week, placing the biggest single order ever for the superjumbo with a deal for 32 aircraft. The airline's chief executive Tim Clark dismissed cynicism from certain quarters about the deal, which takes the airline's orders for the 500-seater to 90 aircraft, saying that it simply reconfirms its successful strategy of "measured, staged growth".
The Dubai carrier signed the $11.5 billion firm order at last week's ILA show in Berlin, where it had also just taken delivery of the 10th of 58 Engine Alliance GP7200-powered A380s from its existing orders.
Clark says that the deal for 32 additional A380s, which will also be GP7200-powered, "has been in the making for a long time" and is "simply an extension of the growth strategy which have been doing successfully for quite a number of years".
Deliveries will begin shortly after the last of the current batch arrives in January 2015, says Clark: "The 32 will be delivered between April 2015 and November 2017.
The decision to expand the Emirates A380 fleet to 90 aircraft over the next seven years is part of the airline's strategy to ensure "we have the delivery slots we want at the time that we want, to allow us to grow at the pace that we want to", Clark says.
"When the going gets good again, if we haven't placed our orders and bagged the positions for the aircraft that we want to do the job then we'll be behind the curve when everybody else is doing it."
The airline is operating the 10 A380s already delivered to destinations across its network, including to key points in Europe, North America, Asia and Australasia. Clark says that as the airline's traffic and network grows the double-decker will be deployed to more destinations in these regions, replacing existing widebodies, and also to increase frequencies.
The size that Emirates'A380 commitment has grown to now raises a few eyebrows, but Clark uses a simple utilisation calculation to justify it: "When we send an A380 to the US East or West Coast on a daily basis, I lose 2.5 aircraft. If I go there twice a day that's five aircraft, so you've only got to do six destinations on a double-daily frequency on 14.5h missions and those 32 aircraft are gone."
He also points out that the airline will begin a phase-out in February next year of around 68 of its older widebodies, including A330-200s, A340-300/500s and Boeing 777-200s. These aircraft will be replaced by the larger 777-300ER, and the A350 XWB which is on order, as the A380s arrive and succeed those big twinjets on denser routes.
The A380 order, which is the first for the superjumbo in 2010 and comes after several years of slow sales, has met with criticism in some quarters with observers querying the logic of Airbus's over-reliance on one market for A380 sales.
"From Emirates' viewpoint, it might just be win-win. They'll almost certainly get walk-away rights, so the worst-case scenario is a cancelled order," says Richard Aboulafia, vice-president analysis at Teal Group.
"Best case is better market access, and a lot of heavily discounted capacity with which to take advantage of this access. But even then it's impossible to imagine an expansion plan that absorbed 90 A380s before 2026, especially given all their other order positions."
But Airbus chief executive Tom Enders says the benefits of having so many A380s earmarked for one carrier outweigh the business risks. "There is always a risk in this sort of exposure, but if you see how Emirates operates, it has one of the best managements in the world. Their strategy is not built on sand. They see chances where others see risks. So I don't think we have too many eggs with a weak customer, as Emirates have demonstrated [by emerging quickly from] this crisis."
He adds: "Industrially it is much better than selling four A380s here and six there, with each one differently customised. Of course, it is easier for us to have bigger orders with fewer customers."
Although Emirates was a launch customer for the A380, its first commitment was for just seven aircraft (plus five options) and the growing success of the superjumbo at the airline has come as a relatively recent surprise to Airbus. Until 2005, the airline's Dubai hub was notably absent from the list of top 10 superjumbo hubs in Airbus's 20-year global market forecasts - it then went straight in at number six.
However Enders says that A380 was developed very much with the Middle East and Asia in mind. He sees Asia as the bigger opportunity now, as this Emirates order probably represents one of the final big commitments from that region. "I think we have exploited that market already".
He believes the Emirates commitment will prompt rivals to reconsider their fleet strategy. "Some of the blue-chip airlines will have to think 'Are we getting it right and Tim [Clark] is getting it very wrong. What will the world look like when Emirates has 90 A380s?'."
Although Airbus's A380 product-marketing chief Richard Carcaillet acknowledges that the industry is not used to seeing orders of this size for very large aircraft, he is convinced more customers will follow the Emirates lead: "I have no doubt we'll see a number of airlines with fleets of this sort of size in the medium to long term."
But Aboulafia points out that as Emirates is not growing with traffic that is organic to Dubai, its huge deal could hurt other potential A380 customers. "Much of Emirates' traffic has been siphoned off from Europe's legacy carriers. Europe appears willing to let Emirates poach this traffic in order to save the A380. Since the A380 seems to have exactly one big fan (whose enthusiasm has been overstated) letting Emirates grow at European carriers' expense might be the only way to generate demand for this airplane."
Speaking a month before the Emirates deal, Airbus's chief salesman John Leahy doubled his earlier estimate for the minimum number of new A380 orders in 2010 to "at least 20". But Aboulafia says if this deal constitutes that forecast, it "raises troubling questions about this programme, particularly if ILFC cancels its orders. It has been a very long time since they've secured new A380 orders, or a meaningful commitment from someone new."
However Carcaillet says that Airbus is currently engaged in A380 sales campaigns with at least three potential new customers for the type, although he is non-committal whether any more deals could materialise this year.
