Etihad Rules Out Further Airbus A380 Purchases

mffoda · Thu Dec 18, 2014 9:20 pm

As the title states, Etihad's CEO James Hogan says no more A380's... Not great news for the program.

"Etihad Airways has revealed it does not plan more A380 purchases in a blow for the manufacturer Airbus as it ponders the future of its US$25 billion superjumbo programme.

The Abu Dhabi carrier’s chief executive said yesterday that a halt in the production of the world’s biggest passenger plane will not affect its strategy, as it does not plan to take more than it already has on order from the European manufacturer.

“When you are taking 10 aircraft, then whether Airbus continues the production line or not isn’t an issue,” said James Hogan, the Etihad president and chief executive, at an Abu Dhabi airport event yesterday to showcase Etihad’s first A380 and Boeing 787.

Mr Hogan’s remarks add weight to comments last week from Airbus that there is a lack of new buyers for the superjumbo, raising the possibility of ending production of its flagship plane."

http://www.thenational.ae/business/a...-out-further-airbus-a380-purchases

Miami · Thu Dec 18, 2014 9:38 pm

Quoting mffoda (Thread starter):
Not great news for the program.

Not at all.

I would've thought EY would need more A380s in the future as Abu Dhabi continues to expand and get more and more popular. But, Abu Dhabi is no Dubai. At least, not right now.

BiggerJetsPlz · Thu Dec 18, 2014 9:44 pm

If he needs more A380s, buy 12 year old Emirates hand me downs cheap in 4-5 years. Some second hand demand would be very good for the A380 program.

BlueShamu330s · Thu Dec 18, 2014 9:44 pm

I don't recall Etihad ever talking about expanding their fleet to a larger number of A380s or indeed ever saying anything other than the fact their current order was the "right size" for their requirements.

When Etihad start cancelling their current order, then it becomes news.

Until then, it's just lazy journalism jumping on last week's bad news, already debunked, bandwagon.

Good try by The National though.

[Edited 2014-12-18 14:32:15]

Clipper101 · Thu Dec 18, 2014 10:07 pm

In accordance with A380 blog, EY has 10 orders plus 5 options. Does that mean they will be enough with the 10 orders & will not tap into their 5 options? This is what I understand from "When you are taking 10 aircraft" statement, I think it is a little bit confusing

Stitch · Thu Dec 18, 2014 10:10 pm

Quoting Miami (Reply 1):
I would've thought EY would need more A380s in the future as Abu Dhabi continues to expand and get more and more popular. But, Abu Dhabi is no Dubai. At least, not right now.

Perhaps management currently feels that 10 A380s are sufficient for their core trunk routes and the A350 and 787 are better-suited to expansion to other destinations.

Quoting Clipper101 (Reply 5):
In accordance with A380 blog, EY has 10 orders plus 5 options. Does that mean they will be enough with the 10 orders & will not tap into their 5 options?

That does seem like a reasonable interpretation of his comments.

[Edited 2014-12-18 14:11:35]

Miami · Thu Dec 18, 2014 10:23 pm

Quoting Stitch (Reply 6):
Perhaps management currently feels that 10 A380s are sufficient for their core trunk routes and the A350 and 787 are better-suited to expansion to other destinations.

Perhaps so.. But let's say Airbus does end A380 production, and EY needs more 380s. They'll end up regretting it.

KarelXWB · Thu Dec 18, 2014 10:41 pm

As always with these statements, it means they have no plans to order more aircraft for the moment. Big airlines like EY review their fleet plans year after year, and every year might have a different outcome.

avek00 · Thu Dec 18, 2014 11:09 pm

Quoting Miami (Reply 7):
But let's say Airbus does end A380 production, and EY needs more 380s.

Abu Dhabi is the more level-headed version of Dubai. As it is, Etihad struggles with the A380...The Residence is a nice spin on space EY can't easily sell.

Clipper101 · Thu Dec 18, 2014 11:14 pm

Quoting Miami (Reply 1):
I would've thought EY would need more A380s in the future as Abu Dhabi continues to expand and get more and more popular. But, Abu Dhabi is no Dubai. At least, not right now.

EK & EY are two different stories, both airlines have different strategies into growing their business models: When one is more concentrated on growing its own hub, the other is more about building a network of partners (some are equity partners). These two totally diverging approaches are proving to dictate their choice of equipment.

EK413 · Thu Dec 18, 2014 11:57 pm

Quoting Clipper101 (Reply 10):
EK & EY are two different stories

You hit the nail in the head!

2 carriers with 2 strategies... EK is about quantity whilst EY is about quality...

EK413

jetjack74 · Fri Dec 19, 2014 1:46 am

Quoting EK413 (Reply 11):
2 carriers with 2 strategies... EK is about quantity whilst

Yes, a House of Cards under construction.

RickNRoll · Fri Dec 19, 2014 3:51 am

Quoting avek00 (Reply 9):
Abu Dhabi is the more level-headed version of Dubai. As it is, Etihad struggles with the A380...The Residence is a nice spin on space EY can't easily sell.

What is level headed about having much less business and profit?

ORDJOE · Fri Dec 19, 2014 4:32 am

EK the A380 is their workhorse aircraft and are willing to send one dam near anywhere. EY has a far more premium focus on their A380 and accordingly are only going to send them to destinations where people are going to be paying to sit up front or even in that residence. Totally different strategy.

Relax people, even if the A380 is halted, I still think the sun will come up in the east in the morning.

mugler · Fri Dec 19, 2014 4:46 am

I don't see the problem in this, just because EY is from the UAE does not mean they should have 50+ A380s.. look at the other airlines that own the whale they have less than 15 each except SQ and EK

Norcal773 · Fri Dec 19, 2014 7:05 am

I saw a marketing video t Etihad's A380 and there was that awkward moment of an EK A380 in the background at Toulouse. One would think they'd avoid that. Anyways, thought that was funny. Cool video though, here it is;

https://www.youtube.com/watch?v=2Btv2dZoTNQ&feature=youtu.be

SASDC8 · Fri Dec 19, 2014 8:55 am

Quoting avek00 (Reply 8):
Abu Dhabi is the more level-headed version of Dubai. As it is, Etihad struggles with the A380...The Residence is a nice spin on space EY can't easily sell.

Considering that Etihad has not put the 380 into service yet, I am not sure how the could be strugling? All I have read is that booking numbers for The Residence are good.

PlaneInsomniac · Fri Dec 19, 2014 10:32 am

Quoting mffoda (Thread starter):
in a blow for the manufacturer Airbus

Really? Didn't this go out of style around 2007 or so?

So next time an airline publicly states that they remain committed to their 777 or 787 order, is it a "blow to Boeing"?

PlaneInsomniac · Fri Dec 19, 2014 10:39 am

Also, it is maybe worth noting that

Quoting mffoda (Thread starter):
has revealed it does not plan more A380 purchases

is not at all the same as "rules out", as the title suggests.

If I say I am not planning a vacation to Australia, it does not mean I am ruling it out for good.

Lots of poeple getting ahead of themselves, again, when it comes to the A380. Journalists and a.netters alike.

Anyway, it seems the A380NEO is effectively already underway, as discussed at length. Some poeple may end up being very surprised.

BaconButty · Fri Dec 19, 2014 10:48 am

Quote:
Separately, Etihad said it has “no acquisitions on the radar”.

So bad news for the A320, A330, A350, 737, 787, 777 and 747 programs too.

Really, this near daily slack jaw trolling is embarrassing.

CaptCosslett · Fri Dec 19, 2014 10:52 am

Can please have this topic again in five years time when world has recovered from the downturn. I bet that there will be more than double the number of A380 on order then than there is today. Even might have a couple US carriers with A380's on order then.

rotating14 · Fri Dec 19, 2014 12:11 pm

Quoting KarelXWB (Reply 7):

That could be the case but he never said "at the moment".

Quoting mffoda (Thread starter):

Other carriers have not received more A380s than what was planned so why is it a blow when EY says that they don't plan on adding more in the future? The blow to the program is not existing customers not adding more A380s but A not adding new customers who have never bought it.

dtw2hyd · Fri Dec 19, 2014 12:26 pm

Quoting EK413 (Reply 10):
2 carriers with 2 strategies... EK is about quantity whilst EY is about quality...

Exactly. Two exclusive business models. Even if one fails other should survive.

EK's monolithic (near) VLA fleet (vs) EY's flexible fleet.
EK's bilaterals (vs) EY's equity partnerships
EK's high risk/high reward (vs) EY's slow/steady growth

Only time will tell if both thrive or just one.

BN727227Ultra · Fri Dec 19, 2014 12:35 pm

Quoting ORDJOE (Reply 13):
Relax people, even if the A380 is halted, I still think the sun will come up in the east in the morning.

And Industrie will still be printing money. No worries in Toulouse.

seahawk · Fri Dec 19, 2014 12:54 pm

No airline will base their plans for the future on the availability of one aircraft.

EPA001 · Fri Dec 19, 2014 2:02 pm

Quoting BlueShamu330s (Reply 3):
I don't recall Etihad ever talking about expanding their fleet to a larger number of A380s or indeed ever saying anything other than the fact their current order was the "right size" for their requirements.

I don't recall that either. So I don't know what all the fuzz is about.

Quoting BlueShamu330s (Reply 3):
When Etihad start cancelling their current order, then it becomes news.

Until then, it's just lazy journalism jumping on last week's bad news, already debunked, bandwagon.

And so it is.

.

Quoting KarelXWB (Reply 7):
As always with these statements, it means they have no plans to order more aircraft for the moment. Big airlines like EY review their fleet plans year after year, and every year might have a different outcome.

Indeed. As we have seen with many airlines. And no doubt we will see such developments in the civil airliner market in the future.

Revelation · Fri Dec 19, 2014 3:25 pm

Quoting ORDJOE (Reply 13):
EK the A380 is their workhorse aircraft and are willing to send one dam near anywhere.

Yes, EK has 56x A380 but it also has 101x 777W and 130 total 777 family members. If all pending orders are exercised without retirement we'd have 140 A380 vs 331 777. Of course there will be retirement and maybe pending 777W orders will move to 777X but IMHO the 777 is just as important to EK as is A380.

Quoting ORDJOE (Reply 13):
EY has a far more premium focus on their A380 and accordingly are only going to send them to destinations where people are going to be paying to sit up front or even in that residence. Totally different strategy.

IMHO EK and EY's strategies are similar, just EK's scale is much larger.

Quoting Norcal773 (Reply 15):
I saw a marketing video t Etihad's A380 and there was that awkward moment of an EK A380 in the background at Toulouse. One would think they'd avoid that.

It's kind of hard to take a video at TLS and not have an EK A380 in the background!

Quoting CaptCosslett (Reply 20):
Can please have this topic again in five years time when world has recovered from the downturn.

Come now. Lots of the world is in recovery right now relative to five years ago, and you have no idea that in five years time the world will "recover". There's always ups and downs. A380's biggest problem is that it's always been based on overly optimistic projections. Right from the start one could see how it'd be very useful on key trunk routes, but there's never been enough of these to support the cost of the program. Airbus bet other routes would grow in volume, but it's just not happening to the degree the program needs, and other opportunities are shrinking because of increased use of secondary airports and other more efficient aircraft that are better suited for such airports.

KarelXWB · Fri Dec 19, 2014 3:33 pm

Quoting Revelation (Reply 26):
It's kind of hard to take a video at TLS and not have an EK A380 in the background!

Little nitpick, but it was in XFW. An Emirates A380 in TLS is rather unique.

cuban8 · Fri Dec 19, 2014 4:42 pm

Quoting avek00 (Reply 8):
Abu Dhabi is the more level-headed version of Dubai.

You managed to put level-headed and Abu Dhabi in the same sentence??? That's a first...

Quoting EK413 (Reply 10):
2 carriers with 2 strategies... EK is about quantity whilst EY is about quality...

I'm not convinced about the quality part of EY. If you've been inside EY as a company, you would realize it's light years behind EK. Just looking at EY's acquisitions should give you an idea.

Quoting RickNRoll (Reply 12):
What is level headed about having much less business and profit?

Quoting Revelation (Reply 26):
Come now. Lots of the world is in recovery right now relative to five years ago, and you have no idea that in five years time the world will "recover". There's always ups and downs.

Agreed. That being said, many posters are jumping on the conclusion that the A380 is dead. I believe it might have some time to go, just like the B747 didn't sell like cupcakes initially neither.

Revelation · Fri Dec 19, 2014 4:53 pm

Quoting KarelXWB (Reply 27):
Little nitpick, but it was in XFW.

Fair enough.

Quoting KarelXWB (Reply 27):
An Emirates A380 in TLS is rather unique.

Really? http://www.google.com/search?q=emirates+a380+in+toulouse and click on Images to see many.

sunrisevalley · Fri Dec 19, 2014 5:19 pm

Quoting Revelation (Reply 26):
but IMHO the 777 is just as important to EK as is A380.

It is my view, probably not widely shared, that EK make more money from their 77W's than their A380's.

ytz · Fri Dec 19, 2014 5:40 pm

Quoting EK413 (Reply 10):
EK is about quantity whilst EY is about quality...

From the perspective of the Y pax, EK is quality....

PW100 · Fri Dec 19, 2014 8:58 pm

Quoting PlaneInsomniac (Reply 18):
Lots of poeple getting ahead of themselves, again, when it comes to the A380. Journalists and a.netters alike

Absolutely, as nicely demonstrated here . . .

Quoting avek00 (Reply 8):
Etihad struggles with the A380

considering . . .

Quoting SASDC8 (Reply 16):
that Etihad has not put the 380 into service yet

Quoting rotating14 (Reply 21):
That could be the case but he never said "at the moment".

Correct. But then again, he never said "ever".

Planesmart · Fri Dec 19, 2014 9:00 pm

Despite their different sizes now, EY aspires to be EK, though the strategies to get there aren't the same.

If your arch rival's fleet strategy is based largely on one model, a great way to undermine them, is to target the model.

Although EY has ordered 10, EK's position is more exposed having ordered 150.

The challenge for EK, is can they replicate a 388 configuration in a smaller aircraft, retain 388 customer satisfaction levels, and achieve the same margins.

Be ready for more PR on the subject from EY.

Revelation · Fri Dec 19, 2014 9:06 pm

Quoting planesmart (Reply 33):
If your arch rival's fleet strategy is based largely on one model, a great way to undermine them, is to target the model.

Surely EK has a two model strategy.

Quoting planesmart (Reply 33):
Although EY has ordered 10, EK's position is more exposed having ordered 150.

By my count, they've ordered 330+ 777 frames past, present and future.

hilram · Fri Dec 19, 2014 9:24 pm

I think I'll start a "Delta rules out any further B777's" -thread just to even things up a bit...

billreid · Fri Dec 19, 2014 10:07 pm

Quoting Miami (Reply 1):
I would've thought EY would need more A380s in the future as Abu Dhabi continues to expand and get more and more popular. But, Abu Dhabi is no Dubai. At least, not right now.

If you have been to both Abu Dhabi and Dubai you would realize that growth of both hubs and Etihad at ABU is a function of connections and not O&D. That said Etihad can grow as fast as it wants based on serving connections just as Emirates and Qatar does.

Quoting KarelXWB (Reply 7):
As always with these statements, it means they have no plans to order more aircraft for the moment. Big airlines like EY review their fleet plans year after year, and every year might have a different outcome.

Thats not what he meant at all. He was saying with only ten orders of the A380 he has no need for more given that it would have little impact on flight operations. They could move on easily.

I believe their statement is clear ..... they are not interested in more A380's based on the gi-normous problem of the aircraft having essentially no residual value or future users other than Emirates. Etihad is essentially telling AB to kill the programme.

It also has the positioning of putting Emirates in a corner with the A380. If there are no other buyers, then Airbus would be smart to tell Emirates "sorry but no more A380's." Unless Emirates would place an order backed by the government in Abu Dhabi then pays 100% at time of order. The reason I say this than no business in its right mind would tie up billions on one customer without other sales perspectives, way too dangerous for AB. What happens if Emirates decides half way through its order to cancel the remaining frames? Does the EU then absorb the loss of billions and the impact on jobs as well. AB would be better served to increase production of its twins and drop the Quad ASAP.

Stitch · Fri Dec 19, 2014 10:43 pm

Quoting billreid (Reply 36):
Etihad is essentially telling AB to kill the programme.

Unless they paid cash for the A380 they just took and intend to pay cash for the next nine, that's not very smart as it is just going to increase their borrowing costs if financial institutions feel the program is soon to be axed.

And even if they are paying cash, they're just increasing their operating costs with the type as no new orders means Airbus and suppliers won't be replenishing the spares pool long-term.

billreid · Fri Dec 19, 2014 11:05 pm

Quoting Stitch (Reply 37):
Unless they paid cash for the A380 they just took and intend to pay cash for the next nine, that's not very smart as it is just going to increase their borrowing costs if financial institutions feel the program is soon to be axed.

I am not sure but is Etihad state supported?
Either way if AB killed the programme, which they indicate they have no issues with it would be far greater pain for Emirates, right?

Stitch · Fri Dec 19, 2014 11:22 pm

Quoting billreid (Reply 38):
I am not sure but is Etihad state supported?

I believe they are owned by the government, but they appear to use commercial financing.

Quoting billreid (Reply 38):
Either way if AB killed the programme, which they indicate they have no issues with it would be far greater pain for Emirates, right?

It would, in that the A380 is the best weapon Emirates has to dominate their competition.

SEPilot · Fri Dec 19, 2014 11:28 pm

I think people are reading too much into EY's statement. What I get out of it is that they do not see at present that they can profitably utilize more than the ones they have on order at this point, nothing more. They are not talking about whether or not Airbus should can the program; that is not their concern. And yes, if once it is in service it becomes wildly popular, they could change their mind. But since all operators other than EK have essentially said the same thing there is a trend, and it is definitely worrisome to Airbus, and does imperil the A380's future.

Planesmart · Sat Dec 20, 2014 9:42 am

Quoting Revelation (Reply 34):
Surely EK has a two model strategy.

EK has a two model strategy (currently more), but one model tracks more than 10% points ahead of other models in respect to passenger satisfaction.

Unless new 777 acquisitions are to be configured consistent with the 380, especially in economy, EK management will harm customer satisfaction should 380 production end.

hilram · Sat Dec 20, 2014 10:17 am

Quoting planesmart (Reply 41):

Not long ago I heard Tim Clarke say that "11 abreast in the 777 is definetly the way to go". I believe that will not help customer satisfaction with the 777 much...

ytz · Sat Dec 20, 2014 3:32 pm

Quoting hilram (Reply 42):
Not long ago I heard Tim Clarke say that "11 abreast in the 777 is definetly the way to go". I believe that will not help customer satisfaction with the 777 much...

I believe that was 11 abreast in the A380. And the resulting seat width is still wider than most 777 and 787 operators.

The middle seat sucks. But it's only 1 out of 11 complaining. The rest of them still have 18" wide seats.

sunrisevalley · Sat Dec 20, 2014 5:35 pm

EY offered on AUH /SYD/AUH 29336 seats in September 2014. They filled 28900 for ~ a 98 % load factor. If they dropped back to an A380 1x daily they would have offered 29640- seats for a load factor of ~97% . This is one route that can well support two plus A380's. The rotation takes about 32- hours .

KarelXWB · Mon Dec 22, 2014 8:31 am

Quoting Revelation (Reply 29):
Really? http://www.google.com/search?q=emirates+a380+in+toulouse and click on Images to see many.

I meant painted frames.

chrisp390 · Mon Dec 22, 2014 9:30 am

Quoting SASDC8 (Reply 16):

There is one residence per aircraft which makes it easy to see how many are selling since their website will either show as available on X date or not if it has sold for that flight. Despite what they have said about it selling well from my searches I have hardly seen any booked apart from the first few days of operation

hilram · Mon Dec 22, 2014 10:28 am

Quoting chrisp390 (Reply 46):

Nope. Two per aircraft.

KarelXWB · Mon Dec 22, 2014 10:37 am

Quoting chrisp390 (Reply 46):
There is one residence per aircraft which makes it easy to see how many are selling since their website will either show as available on X date or not if it has sold for that flight. Despite what they have said about it selling well from my searches I have hardly seen any booked apart from the first few days of operation

Well last month, EY CEO Mr. Hogan himself said residence suite for the first 10 flights has been booked.

[Edited 2014-12-22 02:46:08]

Prost · Mon Dec 22, 2014 10:42 am

I wonder if the residences will also be booked closer in to departure than commonly occurs for the kind of travel you and I do. "Honey, I haven't been to London in AGES, and I need to get my nails done" "Okay dear, have Fritz book you the residence on Etihad so go have fun, and keep the Harvey Nichol's bill down below a million please."

That convo doesn't happen in my house. I just can't see some bloke sitting down with a brochure that he takes home to the little woman and they pour over it and circle dates on their calendars.

Who is online

Popular Searches On Airliners.net