Emirates ordered 58 A380s, but Airbus has been barely able to produce one airplane a monthPhoto: Ammar Abd Rabbo / CC BY-NC 2.0
The only surprise about Dubai’s sudden financial crisis was that it should be a surprise. To any sober eye, the kingdom’s real estate spending seemed unsustainable. There was nothing wrong with the drive to build a modern world city with an exemplary infrastructure—lacking the oil revenues of its fellow members of the United Arab Emirates it made sense to become a commercial and leisure mecca for the region. But it all got far too excessive in quantity and in taste.
One of the more consequential products of this grand scheme has been Emirates,
the national airline. It has rapidly built a reputation for vision and
quality. The geographic logic behind the airline was that building a
major hub airport in Dubai would create a valuable new route structure
linking Arabia with Africa, Europe and Asia. There are, in fact, seven
international airports altogether in the UAE and in 2008 they handled
40m passengers—Heathrow in London handles around 67m a year. Those
numbers are not as typical as they may seem, however. They include vast
numbers of workers imported from Asia to feed the real estate bubble
that has now burst. Many of them have been sent home.
But the most astonishing step by Emirates was to order 58 Airbus A380s, the world’s largest jet. Long established airlines with major international routes ordered far fewer: Singapore, the first customer for the A380, ordered 19, and Air France and British Airways each ordered 12. Any assessment of international air traffic over the next decades foresees the super-jumbo being used mostly as a high-capacity (around 500 passengers) carrier between major world capitals. A far higher number of routes that the airlines call point-to-point, which link many permutations of cities across the globe, will be served by two smaller jets of the next generation, the Boeing 787 and Airbus A350. Nobody I have talked to in the business could figure out how Emirates could need anything like 58 Airbus A380s, even though they had the benefit of buying their gas very cheaply.
As it happens, there are not going to be a lot of A380s standing idle in Dubai or anywhere else any time soon, because the Airbus production line is seriously constipated. They have been barely able to produce one airplane a month, compared to the workhorse A320, which can be turned out at the rate of one a day. By the end of this year only 25 A380s will have been delivered to airlines. But despite the production snafus, Airbus needs all the future orders it can get simply to break even on the program. That is why any reduction in the Emirates order would be serious for them, and why there is a level of high anxiety at the Airbus headquarters in Toulouse this week as the Dubai saga, spouting collateral damage across the world, unfolds.
But the most astonishing step by Emirates was to order 58 Airbus A380s, the world’s largest jet. Long established airlines with major international routes ordered far fewer: Singapore, the first customer for the A380, ordered 19, and Air France and British Airways each ordered 12. Any assessment of international air traffic over the next decades foresees the super-jumbo being used mostly as a high-capacity (around 500 passengers) carrier between major world capitals. A far higher number of routes that the airlines call point-to-point, which link many permutations of cities across the globe, will be served by two smaller jets of the next generation, the Boeing 787 and Airbus A350. Nobody I have talked to in the business could figure out how Emirates could need anything like 58 Airbus A380s, even though they had the benefit of buying their gas very cheaply.
As it happens, there are not going to be a lot of A380s standing idle in Dubai or anywhere else any time soon, because the Airbus production line is seriously constipated. They have been barely able to produce one airplane a month, compared to the workhorse A320, which can be turned out at the rate of one a day. By the end of this year only 25 A380s will have been delivered to airlines. But despite the production snafus, Airbus needs all the future orders it can get simply to break even on the program. That is why any reduction in the Emirates order would be serious for them, and why there is a level of high anxiety at the Airbus headquarters in Toulouse this week as the Dubai saga, spouting collateral damage across the world, unfolds.
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