DUBAI – Dubai-based airline Emirates, the largest carrier in the Middle East, announced on Thursday it had struck a deal to buy 36 Airbus A380 aircraft for some $16 billion, ending speculation that the European aeronautical company would halt production of that model.
Emirates and Airbus signed a memorandum of understanding agreeing to a firm purchase of 20 aircraft and put in an order for another 16, with engine options – including engines manufactured by Rolls-Royce Holdings and the joint venture of General Electric and Pratt & Whitney – still being discussed.
“This order will provide stability to the A380 production line,” the CEO of Emirates, Ahmed bin Saeed al-Maktoum, said in a statement.
Airbus’s sales director, John Leahy, on Monday had cast doubt on the future of the plane model, saying that production could end if six orders per year could not be guaranteed. He also alluded to ongoing talks with the United Arab Emirates’ main airline.
“If we can’t work out a deal with Emirates, there is no choice but to shut down the program,” Leahy had said.
According to a report supplied by Dow Jones Newswire to EFE, Emirates now accounts for more than half of all A380 ordered if it exercises all options, punctuating the Toulouse (France)-based plane maker’s dependence on the airline.
The bleak outlook for the A380 was exacerbated late last year when the first of the jets, once operated by Singapore Airlines, was placed in long-term storage after the airline opted not to extend its initial lease period.
The Asian carrier is the second biggest A380 customer, having ordered 24.
Air France-KLM and Lufthansa are among other airlines to have cut orders for the plane.
In addition, Virgin Atlantic Airways has never introduced the model despite ordering six and Malaysia Airlines is phasing out its six, although it is trying to rent them to others.
Airbus had long promised huge demand for the A380, which costs $445.6 million per unit at list price, though airlines typically get discounts.
The airplane has been popular with passengers, but airlines have been cautious to embrace it, worried about sales teams being able to fill the aircrafts’ seats, as each plane can accommodate more than 600 passengers, the report provided by Dow Jones added.