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[LONDON] Airbus SE is working with Emirates, the biggest buyer of its A380 double-decker airliner, on a follow-up deal, which would bring much-needed relief to a program that's running out of orders as carriers pick smaller more fuel-efficient aircraft.
The two sides aim to come to terms in time for the Dubai Air Show, which starts Nov 12, Emirates Chairman Sheikh Ahmed Bin Saeed Al Maktoum said on Friday in Hamburg, before taking delivery of its 100th A380. Airbus Chief Executive Officer Tom Enders sought to bolster the troubled program at the event, saying the A380 would remain in production for another decade, and that there are other sales prospects to customers in the Middle East and Asia.
"I hope that we will be able to do it" in time for the biennial air show in Emirates' hometown, Al Maktoum said to reporters. "It's really about the work between the two teams as we speak today. There are discussions," but contract talks "take ages and are expensive." The Airbus A380, which is the European manufacturer's largest and most expensive plane at a list price of US$436.9 million, has become a tough sell for the company. Emirates represents the only major customer for the double-decker, with 142 of the jet's 317 net orders as the airline uses the model as its flagship. Airbus rose as much as 1.5 per cent to 87.73 euros and was up 1.3 per cent at 12.06 pm in Frankfurt trading. The stock has gained 39 per cent this year, while Boeing has risen 69 per cent.
Most other customers, such as British Airways to Lufthansa to Air France, have made the plane only a sub-category of their fleets. Bloomberg reported in June that Airbus was working to secure a follow-on order for 20 planes, which would lift Emirates' total orderbook to more than half of the A380's total. In June, Airbus unveiled the so-called A380plus, which adds fuel-saving upgrades in a bid to make the 550-seat, four-engine behemoth more appealing.
"For Emirates, the A380 has been a success," Al Maktoum said. "We remain committed to the program and will work closely with Airbus and our partners to continually enhance our A380 product." Airbus has cut back production of the superjumbo over the past few years to adapt to the slowing order flow, moving from 28 deliveries in 2016 to just eight a year from 2019. The move is in line with Boeing Co's own troubles selling the latest iteration of its 747-8 jumbo jet, which has seen even weaker demand than the A380.
The Dubai Air show, which runs until Nov 16, is the venue of choice for the major carriers from the Middle East to place orders. Besides Emirates, Etihad Airways PSJC and Qatar Airways also operate the plane. Emirates has on several occasions topped up its order book.
In a sign of how important the relationship is the Franco-German planemaker rolled out its top executives for the Hamburg handover ceremony, including outgoing sales chief John Leahy who is slated to be leaving Airbus at the end of this year or early next. Airbus is starting over in its search for a replacement for its sales supremo after designated replacement Kiran Rao counted himself out of the running.
Leahy, who has racked up more than 15,500 jet orders worth US$1.7 trillion at list prices over two decades as head salesman, could make a final Emirates deal his swan song.
"I'm not sure John will retire without one more significant A380 order," CEO Enders quipped in Hamburg.