Bloomberg News

Airbus Negotiating A380 Sales With Two New Prospective Customers

March 02, 2012

Airbus SAS (EAD), the world’s biggest commercial planemaker, said it’s negotiating with two new potential Middle East customers to sell the A380 superjumbo.

The delivery schedule of the planes is a determining factor for the deal, Habib Fekih, Airbus’s president for the Middle East, said in an interview. The company’s commercial customers in the region are Emirates, the world’s largest carrier by international traffic and the biggest operator of the aircraft, Abu Dhabi’s Etihad and Doha-based Qatar Airways.

The Middle East has become the main sales region for the A380, with Emirates having ordered 90 in total and Qatar Air and Etihad a combined 20. Emirates, which already operates 20 of the double-decker aircraft, is marketing its location as a multi- directional hub in Dubai that can connect any two points in the world with an A380 with just one stopover.

The Toulouse, France-based planemaker forecasts demand for 50 to 100 plane orders from Middle Eastern carriers this year, predominantly for narrow-body aircraft to replace ageing fleets, according to Fekih. This year has “good prospects,” even if it looks quieter in terms of regional orders than 2011, which was an “exceptional year”, he said.

“The region ordered a lot of wide-bodies in the last few years so I believe orders for wide-bodies will be lower than last years,” said Fekih. “On the other hand, we have a lot of airlines replacing their A320s, or what we call the single-aisle fleets, because those were delivered in the early nineties.”

Replacing Narrowbodies

Airlines that need to replace narrow-body planes include, Etihad, Egypt Air and Tunisair, the executive said, adding that many A320 fleets have been in operation for 20 years.

Additionally, there could be “top ups” for five or 10 wide-body aircraft from Gulf carriers, though large individual orders are more likely to come from other carriers.

“We have Sri Lanka, Pakistan, North Africa, I think Ethiopia, these are the sort of people where there’s very good traffic growth and there’s possibility for orders,” he said. “There are airlines that need to replace their wide-bodies and narrow-bodies so consequently we can expect orders from there. It’s a prospect.”

In total, the manufacturer is in “serious negotiations” with ten regional customers for potential orders of different aircraft sizes, he said.

Saudi Arabian billionaire Prince Alwaleed bin Talal has ordered one A380 as a private jet. Other airlines in the Middle East that operate long-haul routes include Royal Jordanian Airlines (RJAL), Saudi Arabian Airlines and Gulf Air.

By building regional hubs, Gulf carriers are winning long- haul passengers from European airlines Air France-KLM Group and Deutsche Lufthansa AG (LHA) with Emirates carrying 31.4 million passengers during its 2010-11 financial year. As airlines in the region expand their global networks and invest heavily in growing their fleets, Airbus won 150 orders from the Middle East last year.

To contact the reporter on this story: Tamara Walid in Abu Dhabi at twalid@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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