Airbus Group SE’s struggles with its A380 superjumbo jet are deepening as the planemaker delays deliveries of a dozen aircraft over the next two years to Emirates, the double-decker’s biggest customer.
To make up for the financial drag from the tardier handovers, Airbus will accelerate cost cuts, according to an e-mailed company statement Tuesday. The delay stems from an agreement between Emirates and engine supplier Rolls-Royce Group Holdings Plc, the release said. Handovers of six A380s apiece that were originally planned for 2017 and 2018 will be shifted to a year later following a subsequent agreement with Emirates and Airbus, the planemaker said, adding it still plans to deliver about 12 A380s per year as of 2018.
Emirates and Rolls-Royce reached a settlement earlier in December over the airline’s A380 engine performance and maintenance concerns, after the carrier had revealed technical shortcomings a few weeks earlier. The delays compound Airbus’s efforts to turn around the fortunes of the A380, the world’s largest commercial jetliner, which lists for $433 million before the discounts customary in the industry.
Bad Year
The announcement caps a year of negative news for Airbus’s flagship model. An order for A380s from Iran never materialized when that country announced purchases from Airbus earlier in December, meaning the company hasn’t received any advance contracts on the model this year. As a consequence of slack demand, Airbus cut its delivery target for the A380 in July. U.S. competitor Boeing Co. is also having trouble selling its competing 747-8.
Emirates is by far the biggest buyer and operator of the A380, with orders for more than 140 of the plane. The Dubai-based carrier recently switched to Rolls-Royce engines for its latest batch of A380s, after relying on General Electric Co.’s Engine Alliance joint venture with Pratt & Whitney for the four powerplants that propel the airliner.
Rolls-Royce said in an e-mailed response to questions that it will “continue to work with Airbus and Emirates to meet their requirements.” Winning Emirates as a customer for its Trent 900 engine to power the A380 was a major commercial victory for Rolls-Royce when it was announced in 2015, and the contract for a total of 50 aircraft remains the largest in the history of the U.K.’s prime manufacturer. In November, Emirates President Tim Clark revealed that feedback on the powerplants indicates “technical issues” that needed to be resolved before the first plane was delivered to Emirates, which had been due this month.
