After a two-year order drought, Airbus Group SE has reportedly signed up another customer for its A380 superjumbo passenger jet. All Nippon Airways (ANA) is said to have ordered 3 of the planes, each of which has a list price of $428 million. At list price the value of the order is about $1.28 billion.
Airbus’s biggest customer for the plane is Dubai-based Emirates which currently flies 72 of the planes and has 7 more on order. The airline has been pushing Airbus to put new engines on the four-engine, twin-decked behemoth, but the aircraft maker has resisted making a decision.
Emirates has been pushing Airbus to put a new, more fuel-efficient engine on the A380 and has said that a new engine could generate an order for up to 200 of the planes from Emirates. Qatar Airways, which currently has 6 A380-800s in its fleet and 2 more on backlog, may also order more of the huge planes.
Even though the A380 is the world’s most expensive plane to purchase, the economics of flying the plane are competitive if the A380 is configured to carry about 600 passengers and if the seats can be filled. The plane’s four engines do not weigh on operating costs much when the plane is stacked up against existing versions of 777-300ER from The Boeing Co. (NYSE: BA), but when the 777-9X reaches customers in 2020, that could change. Boeing’s 747 is slightly more expensive to operate right now, and Boeing has said that it has no plans to update its largest plane.
Whether or not the order from ANA will be enough to convince Airbus to pull the trigger on putting a new engine on the A380 remains to be seen. ANA plans to use the A380 to expand its service to Hawaii. According to the Nikkei Asian Review, about 1.5 million passengers fly from Japan to Hawaii every year and ANA’s share of that market is 20%, trailing the market leader Japan Air Lines which claims about 35% of the market.
Singapore Airlines, which was the 2007 launch customer for the A380, counts 19 of the planes in its current fleet and 2 more on order. The airline has shown no interest in joining the debate over a new engine for the plane.
Will one the promise of one massive order and the reality of one small one be enough to cause Airbus to pull the trigger on putting new engines on the A380? Stay tuned.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.