How Emirates' Strategic Move Ensured the Survival of the Airbus A380 Program

Emirates airline recently announced that it will be placing an order for up to 36 Airbus A380s. This $16 billion (£11.5 billion) deal comes as a relief for the A380 model, especially after Airbus had hinted that they might cease production if an agreement with Emirates wasn’t reached.

Emirates is unique in making the A380 a central part of its fleet strategy and many had anticipated that they would order more of these aircraft during the Dubai Airshow last November. However, Emirates surprised many by choosing to order 40 Boeing 787 Dreamliners at that time instead.

Now, Emirates has firmed up an order for 20 A380s, with the option to buy an additional 16. They plan to start receiving these aircraft in 2020. Emirates is already the largest operator of the A380, currently flying 101 of them, with 41 more previously ordered.

Earlier this week, Airbus sales director John Leahy mentioned that the company would likely have to stop producing the A380 if Emirates didn’t make another purchase. Fortunately, with this new order, Airbus will continue to manufacture the A380 for at least another decade, although production rates will drop to six planes a year starting from 2020, down from the current rate of 12 this year and eight in 2019. It’s also likely that Airbus offered Emirates a significant discount on the aircraft from the standard $16 billion catalog price, as is common in the industry.