Emirates is looking to cancel five of its last eight Airbus A380 orders. The UAE-based carrier is planning to take on three of the widebody aircraft this year but does not want the remaining three that are due to arrive after. However, Airbus is standing its ground since the planes are already in production.
Challenging times
Bloomberg reports that the manufacturer is proposing a deferral of deliveries or payments, rather than a full cancellation. The jumbo is just one of two aircraft types in Emirates' commercial fleet. The other jet is also a widebody in the form of the Boeing 777. Altogether, the Dubai outfit holds 115 A380s and 153 777s.
However, complications surrounding the coronavirus pandemic have forced Emirates to ground most of its planes over the last few months. Moreover, with both of its models built with high capacity onboard, many of the flights that are still in operation may not be as efficient amid the downturn in passenger activity.
Troubles with the superjumbo
The A380 has been one of the most affected planes during the virus outbreak. With all the flight suspensions put in place, most of its operators have been storing the jet. Last month, China Southern was the only carrier still flying with the aircraft.
Even before the outbreak, several airlines had already planned to retire the A380, preferring more cost-effective solutions. Subsequently, the pandemic is forcing the early retirement of the plane, with the likes of Air France stopping operations with it already.
Previously, Emirates has shared its love for the jet, initially expecting it to be part of its holdings until 2035. The firm planned for the retirement to be gradual, cutting to around 90-100 units by the middle of this decade. However, with the global health crisis creating such a massive storm within the aviation industry, it would not be a surprise to see the phasing out happen much more swiftly.
A lot at stake
Ultimately, Emirates can't just back out of the deal as there is a contractual agreement. If the terms are not adhered to, there could be penalties of up to 257 million dirhams ($70 million) per aircraft.
Therefore, the airline will be keen to reach a viable solution with Airbus as it tries to limit the damage. Nonetheless, demand will pick up again, and the firm will be able to fill up its aircraft eventually. However, for now, any reduction in cost will go a long way.
Simple Flying reached out to Emirates for comment on its A380 situation. A spokesperson shared that that the company is in regular dialog with Airbus regarding its fleet requirements but does not comment on commercial discussions.
What are your thoughts on Emirates' decision regarding its Airbus A380s? Do is this a good move for the airline? Let us know what you think in the comment section.