Emirates' Massive A380 Order
Emirates Wednesday placed an order at the Berlin Air Show for an additional 32 Airbus A380s, making the single largest order for the superjumbo and a deal worth $11.5 billion (at list prices). The government of Dubai (from which Emirates operates) reportedly lays claim to a $100 billion debt, but the airline is operated independently and last year showed profits of $964 million and a (roughly) 20-percent increase in passengers. Meanwhile, Airbus is struggling with positive cash flow specific to the A380, acknowledging that selling the aircraft to U.S. airlines has been a challenge. The manufacturer has been encouraged by the dollar's recent rise versus the euro. Airbus prices the aircraft in dollars, while many of the A380's costs of manufacture are based on the euro. With its latest order, Emirates is now slated to operate 90 Airbus A380 superjumbo airliners by 2017. And Emirates president Tim Clark has said his company is interested in buying even larger versions of the massive jet.
According to the Telegraph.co.uk, Emirates' Clark has said his airline would be interested in a stretched A380 capable of seating 1,000 passengers. Airbus hopes that customers suited to purchase the A380 will find the jet's passenger-carrying ability a compelling answer to high fuel costs and traffic jams at airports. The current deal brings Airbus' A380 order roster to 234 aircraft, but delivery delays and other production problems have kept the manufacturer far from turning a profit on the aircraft. Separate from Airbus, Emirates' order clearly shows confidence in its own continued growth.