The 2017 Dubai Air Show has just ended and over the 5 days it delivered surprises and shocks, and a record breaking order haul.
For Wales, that record breaking order was great news as it is just one of many orders for aircraft whose wings are made in Broughton, North Wales.
The week didn’t start well for Airbus. At the beginning of the week Emirates & Airbus were expected to make an announcement regarding the A380 but just as journalists were sharpening their pencils the aircraft model on display in the press conference was switched and as the cover slipped momentarily it revealed the 787-10 logo. Emirates had just given a commitment for 40 Boeing 787-10 Dreamliners, killing off any hopes Airbus had to sell the A350 aircraft to the middle-eastern carrier (an order that was cancelled in 2014 to allow Emirates to reassess their needs).
Don’t panic though, an order for 36 Airbus A380’s must still be coming – the analysts said so! To further add to Airbus’ woes Emirates announced that they had no interest in the re-engined A380Plus that the Toulouse based company was touting. As the biggest user of A380’s Emirates effectively killed that concept off before it had even really begun.
The usual raft of smaller orders for both sides of the Boeing/Airbus fence than started to filter through and overall the two airframers did combined deals worth $75bn. One order though stole the show.
On Wednesday the 15th November Indigo Partners, an equity firm that specialises in investing in budget airlines signed a memorandum of understanding (MOU) for 430 Airbus A320Neo family aircraft on behalf of four of their airlines including Frontier, Volaris, Wizz and JetSMART.
For the Airbus’ site at Broughton, Flintshire, which makes the wings for Airbus’ commercial aircraft line up from the A320 family up to the massive super-jumbo A380, the Dubai Air Show provided job security for 1000’s as the production of wings for the airliners on order amount to years of work.
At current production rates it would take over 3 years just to fulfil the Indigo commitment alone. Taking other orders in for aircraft from the A320 through to the A350 and that figure is more than 15 years of guaranteed work for the North Wales site.
In contrast however, the Airbus A380 is officially on life-support. The failure to secure the expected deal for 36 aircraft at the Dubai Air Show means that there have been no new orders for the type in 3 years.
The hold-up for a deal with Emirates is the fact that it wants guarantees that Airbus will produce the jet for at least another 10 years. Airbus is cutting production down to just 8 per year as 217 of the 317 ordered have been delivered. There are massive doubts about whether some airlines will actually continue with their existing orders for the A380. If they don’t to honour their orders then Airbus could be forced to halt production or try to persuade Emirates to accept the jets at a faster rate than it had planned.
The reason Emirates wants a guarantee is that should Airbus halt production of the type the already weak resale market would collapse with resale values being slashed. Malaysian Airlines recently found it impossible to find a buyer for its A380s and Singapore has just returned its oldest A380s to the lease company who, as yet, have no user lined up for them.
It remains down to Emirates to decide whether the A380 recovers or life-support is switched off.
Whilst that would be a blow for the Broughton site that makes the wings other Airbus models are continuing to sell strongly ensuring the production lines keep rolling for many years to come.