Iran’s
surprise agreement to buy the Airbus Group SE A380 marks the second new deal
for the superjumbo in three weeks and will help the planemaker paper over
the cracks in its flagship program -- for now.
The
Iranian accord for 12 A380s, announced Thursday, together with the sale of
three of the double-deckers to Japan’s All Nippon Airways Co., disclosed
in order data on Jan. 12 and confirmed Friday,
provides some cheer for Airbus after the model failed to find a single new
airline buyer in three years.
The
15 jets, worth $6.5 billion at list prices, will provide a vital breathing
space as the Toulouse, France-based manufacturer seeks to drum up further
orders and determine whether a life-extending upgrade of the jet sought by
leading buyer Emirates of Dubai is viable.
The planes
will provide at least six months of work for the A380 line at the current build
rate of 30 aircraft a year, swelling a backlog that was sufficient to support
output only through about 2018. Airbus is seeking cost cuts to drop the annual
break-even level to 25 or fewer, further eking out production.
“The
new orders may help push back the need for a new-engine version of the A380,
thus encouraging potential airliner buyers to move forward more quickly with
orders,” said Yan Derocles, an analyst at Oddo Securities in Paris with a “buy”
rating on Airbus stock.
Japan
Breakthrough
The
Iranian commitment,
likely to be for flag-carrier Iran Air, is especially welcome since Airbus has
been seeking to sell the A380 to companies beyond the best-known first-tier
operators for years, with only limited success. The carrier was a global player
in the 1970s and even placed an order for the supersonic Concorde, which was
canceled after the 1979 revolution.
The
last new airline buyer for the A380, No. 2 Russian carrier Transaero, collapsed
last year after agreeing to buy four planes.
Confirmation
of Japan’s ANA deal also comes as a coup, with the Asian nation not only a
long-established customer for Boeing Co. but also a leading market for the 747
jumbo, which remains in production as the 747-8 Intercontinental. A bid to
penetrate Japan in the past failed when Skymark Airlines Inc. went in to
bankruptcy protection with six A380s on order.
While
two new orders won’t by themselves save the world’s biggest commercial
aircraft, the deal signed by
Iranian President Hassan Rouhani points to new opportunities. Airbus will now
likely step up sales campaigns in other Muslim nations, both for network needs
and as mass transports in the Haj pilgrimage.
Denser Layout
PT
Garuda Indonesia is seen as a prime candidate, as is Turkish Airlines, and
Saudi Arabia could be targeted with a higher-density version of the plane that
Airbus has begun offering. Iran’s seating plans haven’t been revealed, though
it’s likely to configure its A380s with more than the standard 550 berths,
helping to reinforce the model’s credentials as an industry workhorse.
The
A380 has also received a recent vote of confidence from British Airways owner
IAG SA. The carrier, which already has 12 A380s in operation or on order, said
last week it was evaluating whether to add a batch of five or six used planes.
While
Airbus would prefer to sell new superjumbos, such a move would be valuable in
establishing a second-hand market for the plane. That’s something the
manufacturer is keen to do given that the oldest examples in service with
Singapore Airlines Ltd. and Emirates may become available as early as 2017.
Airbus
also seems to have little to fear from the 747, with diminishing customer
interest causing Boeing to say this week that production will drop to six
jumbos a year from September.
Ultimately,
though, Airbus needs hundreds of new A380 orders if the superjumbo is to remain
in production for another decade or longer.
By
that time, the company reckons more crowded airports will create a much bigger
market. Bridging that gap means securing a deal from Emirates for 150 or even
200 more aircraft -- something the Gulf carrier says must be accompanied by a
costly makeover that includes new engines.
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