The leading European Aircraft Manufacturer, Airbus has announced that it will discontinue the production of the largest passenger aircraft, ‘A380 Superjumbo’ by 2021.
The announcement was made after Dubai base carrier, Emirates, the largest customer of the A380 Superjumbo, decided to revise its order of 162 planes to 123 planes, reducing the order by 39 planes. Airbus will deliver the last 14 A380 Superjumbo planes to Emirates over the next 2 years. Also, A380 Superjumbo faced severe competition from new and smaller planes. Boeing 787 and 777, its closest competitor, is going to benefit most with the decision.
Emirates has made a fresh order of 70 smaller planes of the model A350 and A330 to Airbus. The cost of these 70 smaller planes will be U.S $ 21.4 billion.
An official statement from Airbus read, “Following a review of its operations, and in light of developments in aircraft and engine technologies, Emirates is reducing its A380 orderbook from 162 to 123 aircraft. As a consequence and given the lack of order backlog with other airlines, Airbus will cease deliveries of the A380 in 2021.”
The Chief Executive Officer (CEO) of Airbus, said, “As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years. Passengers all over the world love to fly on this great aircraft. Hence today’s announcement is painful for us and the A380 communities worldwide.”
Emirates Chairman – Sheikh Ahmed bin Saeed Al Maktoum said, “While we are disappointed to have to give up our order, and sad that the program could not be sustained, we accept that this is the reality of the situation. The A380 will remain a pillar of our fleet well into the 2030s.”
The move will also impact the jobs of 3,500 employees of Airbus over the next 3 years. It employs a staff strength of 6,000 people at its Main Wings Factory at Broughton in Flintshire and 3,000 people at Filton, near Bristol, where wings are designed and supported.
A380 Superjumbo which first had its first commercial flight in 2007, gained popularity but was complicated and expensive to build. It had production facilities across Europe, but the final assembling and finishing was carried out between Toulouse and Hamburg.
For the records, the company has so far delivered 234 aircrafts. Airbus would deliver between 880 and 890 new commercial aircraft this year to all its clients. Airbus’s financial result in 2018 showed a net profit of € 2.6 billion, which was only 30% more as compared to 2017.
The move will add another element of doubt with regards to economic turbulence in U.K., which is already facing uncertainties, owing to the Brexit deal. The U.K. economy grew 1.4% in 2018, its lowest ever in the last 6 years.