Emirates Hesitant to Place Their New Order With Airbus of A380 superjumbo without Guarantee

Airbus has lost the trust and confidence of their prominent client Emirates over their uncertainty to continue their production of A380 model in near future. The prominent air flying company in the market needs the guarantee from the A380 producing company Airbus to be able to continue their production of Airbus A380 model at least for next ten years. The company would place their next set of order for A380 model of aircraft only when they get an assurance from the company over the continuous production for next ten years. The President of the largest airlines in the Middle East, Tim Clark confirmed that the company has already placed their next order with Boeing 787 Company for their mid-sized fleets. The order consisted of 40 jets with the company and would continue to maintain progressive business with the company in order to ensure that the supply is consistent in nature for their mid-sized fleet.

The news of the new order with Boeing 787 for 40 jets which would cost around $15.1 billion was announced by the company on Sunday which was a shock for the competing Airbus Company which was expecting a new order for their slow-selling Airbus A380 model. This led to an overnight negotiation and sign of positive response for understanding and accepting the conditions of the largest airlines to secure their new order for their A380 model jets. The negotiations are still on the table and Emirates consider having a positive response to the deal. Airbus persuaded the production of A380 model of jets as a possible solution to avoid the possible problem related to the traveling issues of the passengers among the major hubs and international airports. This approach failed to meet the expectations of the company due to continuous improvement in the development and facilities of the smaller jet’s efficiency.

Dubai government owns the Emirates and they have the similar interest in placing their next order of Airbus A380 model. The company has all the reasons for placing their new order but hesitant to place it due to uncertainty about the Airbus company to continue the production and development of the A380 model aircraft for a minimum period of time. The Company needs to ensure that Airbus is fairly aware of the contractual agreement and conditions before they place the order and very well aware about the consequences which they would encounter for cancellation or fail to fulfill their conditions. The company highlighted the reason for such high expectation from Airbus is their heavy investments which they would make. They cannot risk their investments without any assurance or guarantee.

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