LONDON – The 36 Airbus A380s ordered by Emirates earlier this year could be at risk of stalling into an impasse, according to sources at Bloomberg.
Back in February, Emirates and Airbus confirmed the previously signed MoU in which 20 Airbus A380s with a further 16 options were booked by the Emirati carrier.
The total agreement for 36 aircraft, valued at US$16 billion based on list prices, might be at risk.
As of today, deliveries for the first A380s on this order are expected to begin as early as 2020.
But the deal might be at risk because of ongoing negotiations with Rolls-Royce about its engines underperforming and not meeting targets.
According to the Bloomberg report, Emirates demands that Rolls-Royce improves the efficiency and fuel burn of the engines, as agreed to in the contract the airline signed with the engine planemaker.
As negotiations continue, parties involved have missed deadlines to select the engines for the upcoming A380s, which could put a delay
Emirates has been very vocal in the past when it comes to engine performance. With a further increase of fuel prices in the loom, the carrier must guarantee that it will operate the most fuel-efficient fleet possible.
Rolls-Royce continues to battle with hefty losses as it weathers the Dreamliner engine woes.
Should the A380 engine impasse not find a solution, Emirates is likely to cancel the order, putting to an end the A380 program for good.
“We’ve made no secret of the fact that the A380 has been a success for Emirates. 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’ Sheikh Ahmed said at the time of confirming the order for 36 more planes.
But if the A380 becomes unproductive and cost-prohibitive, the Emirati carrier might decide in favor of smaller, twin-engine aircraft.
As things stand, Emirates moving away from the A380 would be devastating to Airbus, as it would effectively eliminate any possible justification for the continuation of Superjumbo production.
The engine joint venture Engine Alliance—which is an agreement between General Electric and Pratt & Whitney—hasn’t pursued any element of bidding for the jets because no new orders have been picked up in years.
The JV has therefore picked up contracts on other aircraft away from the A380.
However, they did keep open the idea of supplying more GP7200 engines to Emirates if they were interested. In a statement, they said that the GP7200s have “exceptional fuel burn and durability”.
“We look forward to an Emirates announcement, and we are also focused on supporting their fleet for decades to come,” they said.