Airbus will not offer a new engine option for the A380 until a more compelling business case presents itself, despite a proposition from Emirates Airline CEO Tim Clark to buy as many as 200 more re-engined superjumbos. Speaking on March 9 at the International Society of Transport Aircraft Traders (ISTAT) conference in Phoenix, Airbus COO for customers John Leahy noted that the company remains in the process of deciding whether sufficient grounds exist for pursuing such a project. “There is an airline in the Middle East that has been suggesting that we [launch an A380neo]. We aren’t obviously going to build an airplane for just one airline, even if it does buy a lot,” he said. “We have to back and forth with the tradeoff...if you’re getting double digit lower fuel consumption, if you’ve got perhaps even longer range, you can study that. And we’re in the process of trying to decide, do you invest money to make a neo version of this airplane and charging more for it...or do you say no, it’s got a nice price now. And I forgot to mention, in 2015 we are breaking even on the airplane.”
Leahy did concede that the market for the A380 has developed more slowly than Airbus had expected when it launched the airplane, however. “Yes, it’s a small market, maybe smaller than we thought at the beginning, but it’s growing,” he said.
Airbus has collected firm orders for just over 300 A380s and has delivered 153 of the big quads. Its backlog of 163 airplanes would account for a production run of between five and six years at the current production rate of some 30 per year.
Airbus sent ripples through the investment community last December, when CFO Harald Wilhelm told attendees at the company’s Global Investor Forum in London that the company couldn’t guarantee a break-even year for the program in 2018 and that a real possibility existed that the A380 could go out of production not much later.
In November Airbus said it expected the loss-making A380 program to reach break-even status by the end of 2015, helping to offset continued cost increases associated with A350 production support. In London, Wilhelm reiterated the 2015 projection, and insisted the A380 would break even in 2016 and 2017 as well. His apparent reticence about 2018 caught investors’ attention, however, and shares in Airbus Group plunged more than 10 percent in response.
A day later, the CEO of Airbus’s commercial aircraft division, Fabrice Bregier, sought to allay the concerns caused by Wilhelm’s remarks, insisting the improvements to the A380 would ensure no premature end to production. “Longer term…this aircraft will have extra potential,” said Bregier. “Yes, we will one day launch an A380neo. And I will tell you a secret—we will one day launch a stretch of the A380. This is so obvious that there is extra potential…This aircraft will find its place day after day. So don’t be too impatient.”