The Times October 28, 2006
End looms for Airbus A340 as Emirates cancels $4bn orders
By David Robertson
*
EMIRATES, the fastest growing global airline, has dumped orders
worth $4 billion (£2.1 billion) for the Airbus A340 and admitted
that it is in negotiations to buy $8 billion worth of Boeing
747s.
The carrier is dumping ten firm orders and eight commitments to buy
A340s because they no longer fit the carriers requirements. The
move effectively kills off the A340.
The airline is also talking to Boeing, Airbuss rival, about buying
the new generation of jumbo jet, called the 747-8. Tim Clark, the
president of Emirates, said yesterday that he might buy 20 to 30 of
the new 747s if Boeing agreed to change the specifications.
Aviation analysts believe that Emirates decision to dump the A340
effectively signals the end of the aircrafts life in its current
form.
The A340, introduced in the 1980s, is a four-engined plane seating
up to 323 people, but it has become unpopular as fuel prices have
risen. With airlines attempting to cut their fuel budgets, the
twin-engined Boeing 777s and 787s, which cover the 250-seat to
350-seat range, are proving more popular. Customers that want
four-engined planes are opting for much larger units, such as the
747 and the A380, which are more cost-effective per
passenger.
Airbus has won only three A340 orders so far this year compared
with Boeings 24 for 777s and 141 for 787s.
Analysts believe that Airbus will either have to remodel the
aircraft or encourage customers to wait for at least six years
until it can introduce a replacement.
Speaking at Heathrow yesterday, Mr Clark said: The A340 is
starting to move away from what the market wants while the 777 has
come in and is a better plane.
Mr Clark also expressed concern about another Airbus project, the
A380 superjumbo. Emirates is the A380s largest customer, with 45
on order, worth $13.5 billion at list prices, but it has been
frustrated by production delays.
The A380 will now be delivered two years late, which Mr Clark said
would cost Emirates hundreds of millions of dollars in lost
revenue. He has not yet started talking to Airbus about
compensation payments, but said he remained committed to the
aircraft.
Airbus has told Emirates that its A380s will start to be delivered
in 2008, but the airline is cautious about this date. As The Times
reported two weeks ago, Emirates is sending its own team of
auditors to the Toulouse factory where the aircraft is being
assembled to assess whether there will be further delays in
production.
The airline has bought seven extra Boeing 777s as insurance in case
Airbus fails to meet this latest delivery target.
Emirates has ambitious plans to continue growing at more than 20
per cent a year. Mr Clark said that he thought there was a gap in
the market for a 400-seat jet and he is talking to Boeing about
buying 747s to fill this.
Boeings 747-8 is due to come into service in 2009, seating about
460 people but Emirates wants the American company to build a
smaller version for the airline. This version would seat fewer
people but have a longer range, allowing Emirates to fly direct
from Dubai to Los Angeles.
http://business.timesonline.co.uk/article/0,,9067-2425433,00.html