Emirates Announces $16 Bn Deal For 36 A380s

Emirates Airlines said Thursday it has struck a $16 billion deal to buy 36 Airbus A380 superjumbos just days after the European manufacturer said it would have to halt production without new orders.

The company said it had placed firm orders for 20 of the double-decker aircraft with options for a further 16. Deliveries are scheduled to start in 2020.

Emirates is already the world’s biggest customer for the A380 with 101 in its fleet and 41 more firm orders previously placed.

The Dubai-based airline said that with the new order it will have commitments for a total of 178 A380s worth $60 billion.

The deal was expected to be signed during the Dubai Airshow in November but was delayed without any explanation amid reports of tough negotiations.

Instead, Emirates inked a deal to buy 40 Boeing Dreamliners for more than $15 billion.

Airbus’s decision in 2007 to pursue the A380, capable of packing in 853 seats, was diametrically opposed to Boeing’s bet on the Dreamliner, marketed as a more efficient plane that could be used for both medium and long-distance flights.

But the economics of the A380 have proved daunting, with airlines having to fly every flight at full capacity in order to make a profit.

Airbus warned on Monday that it might have to end production of the A380, having booked no new orders for the plane in two years.

It said it regarded Emirates as the only airline with the capacity to place an order of the size required to keep production going.

“We’ve made no secret of the fact that the A380 has been a success for Emirates,” the airline’s chairman and CEO Sheikh Ahmed bin Saeed Al-Maktoum said.

“Our customers love it, and we’ve been able to deploy it on different missions across our network, giving us flexibility in terms of range and passenger mix.”

Emirates operates a fleet of 269 wide-bodied aircraft and flies to 157 destinations.