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AT the handover of the 100th A380 superjumbo to Gulf carrier Emirates earlier this month in Hamburg, Airbus rolled out the red carpet to airline executives and Dubai royalty, who in turn winked and nodded that another multi-billion-dollar order for the double-decker was on the cards.
Ten days on, dignitaries were filing into a conference room at the Dubai Air show to witness the unveiling of a lifeline order for the slow-selling jet — when the unimaginable happened.
Excitement over a mammoth follow-on contract from the A380’s only significant backer turned first to bewilderment as word spread that no announcement would be forthcoming, and then to mortification for Airbus as Emirates proceeded instead to hand a $15 billion deal to arch-rival Boeing.
The 11th-hour switch amounted to much more than just a lost order for Airbus, sending ripples across the aviation industry as the superjumbo’s already uncertain future turned a shade darker.
It also provided a rare insight into how decisions are made at the world’s biggest long-haul airline - as well as the uneasy interdependence between a planemaker and its key clients.
Airbus and Emirates have developed an almost symbiotic relationship around the A380. The Gulf giant has given the superjumbo a public profile it would otherwise have struggled to attain, while the airline put the 550-seat jet at the heart of its bid to divert a significant proportion of global traffic via a former aviation backwater.
Airbus CEO Tom Enders summed it up at the handover event, saying: “Emirates has become synonymous with the A380, and the A380 with Emirates.”
So close are the ties that what is still regarded as Airbus’s flagship model couldn’t survive without the Gulf operator - which in turn would have a gaping hole in its strategy without the superjumbo.
No surprise, then, that Airbus officials were left shell-shocked by the turn of events in Dubai. The gloom eased only three days later after the announcement of an order for 430 narrow-body jets from a US buyer, a record deal for the company.
The mood at the Hamburg ceremony on Nov 3 had been rather more upbeat.
Emirates Chairman Sheikh Ahmed Bin Saeed Al Maktoum flashed a victory sign to photographers, with Enders and the carrier’s President Tim Clark sharing a joke nearby.
Emirates Chief Operating Officer Adel Ahmed Al Redha stood next to Airbus sales chief John Leahy, known for seducing airlines worldwide with his honeyed voice and sharp pitches.
Less than a week later, the sides had agreed a handshake deal, according to people familiar with the deal, who asked not to be identified because the deliberations were private.
Emirates would take another 36 A380s worth $17bn, bringing its total to a staggering 178 aircraft, more than half the model’s entire order book, people said.
The upcoming air show in Dubai provided the ideal backdrop to unveil the accord, a farewell gift from Emirates to Leahy, who had tied his retirement to the program-saving sale. Officials at Airbus and Emirates declined to comment.
Yet in the space of a few days the plan unraveled, and Leahy’s victory lap turned into a public humiliation. At the heart of the turnabout was concern at Emirates about the commitment of Airbus to carry on developing the A380, with the carrier loath to place on order only to see the programme terminated a few years later, leaving it as the biggest operator of a dead-end model.
Bloomberg/The Washington Post Service
Published in Dawn, November 19th, 2017
