Emirates places $11.5bn order for 32 A380s

Emirates airline yesterday made history once again by placing an order for 32 additional A380 superjumbo passenger aircraft with European plane maker Airbus, marking a powerful start for the week-long ILA Berlin Air Show.

The deal, valued at $11.5 billion (Dh42.2bn) (at list prices), takes Emirates' firm orders for the superjumbo to 90 aircraft, which would be delivered by 2017. The carrier received its 10th A380 yesterday from the previously ordered 58 superjumbos.

In a statement, Chairman and Chief Executive of Emirates, Sheikh Ahmed bin Saeed Al Maktoum, said: "This latest order, adding to 58 A380s previously ordered, affirms Emirates' strategy to become a world-leading carrier and further establish Dubai as a central gateway to worldwide air travel. The A380 is our flagship in terms of passenger comfort, innovation, operating and environmental efficiency and revenue generation." He added that the airline's latest commitment signals its confidence in the growth to come in a "thriving aviation sector as we build our fleet for tomorrow".

The second largest carrier in the world in available seat kilometres, Emirates currently has 48 Airbus 380s, 70 Airbus 350s, 18 Boeing 777-300s and seven Boeing air freighters on order totalling 143 wide-body aircraft worth more than $48bn.

Even as the global aviation industry was rocked by the economic downturn, Emirates posted a net profit of $964 million in financial year ended March 31. Emirate's President, Tim Clark, said on Monday the airline is set to exceed its last year's profit levels in the current financial year (ending March 31), owing to a rebound in demand for air travel.

Airbus Chief Executive Officer, Tom Enders, called the A380 as a "profit generator" for airlines, and said the order was the "single largest A380 order ever". He further described the order as a "sign of confidence in the superjumbo and in Airbus".

Asked how Emirates is likely to justify inflating the A380 order, industry expert Peter Morris, Chief Economist at Ascend Worldwide, told Emirates Business: "The main question is whether Emirates can expand to enough routes that have sufficient traffic density to turn the benefits of that low cost per seat in to profits. Its track record shows that it tends to get its sums right, and have opened up a number of new markets in both Asia-Pacific and Americas where this aircraft could be beneficial.

"A further possibility is that Emirates is looking at operating some A380s with much higher densities of seating on medium haul [such as Middles East-Indian Subcontinent]."

He added that buying a large order of A380s is clearly one of those decisions that makes Emirates "stand out from the crowd".

Commenting on whether the timing is right for Emirates to place another such huge order for the world's largest jet, Addison Schonland, Founder and President of California-based IAG (Innovation Analysis Group), said: "The timing is okay, as Emirates is clearly profitable and the A380 flights are all profitable. Fortunately, for Airbus, Emirates is strong and growing stronger."

BERLIN AIR SHOW OPENS WITH SPOTLIGHT ON AIRBUS

Aerospace group EADS had a key showcase at the opening of the Berlin Air Show as it paraded its embattled A400M military transporter and announced a massive new sale for its flagship A380. The Berlin show is a biennial event that tends to be overshadowed by larger shows elsewhere, but EADS' Airbus unit will use it as a platform to show it can finish and sell the A400M, the massive plane on which it has bet much of its future. The A400M, which has cost EADS billions of dollars in cost overrun charges, also has a presence at the show. EADS said last week the two planes in testing were working well and two more test planes should go into service this year.

Airbus chief Tom Enders told an industry dinner packed with airline CEOs on Monday night he would gladly sell any of them an A400M – drawing laughs but no obvious takers. (Reuters)

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