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Sunday, January 14, 2018

Has China Made A Business Case For The A-380?

Like the recent retirements of America's 747's from airlines without any reorders, Airbus is faced with a similar problem. It needs A-380 orders sooner rather than later and it went to China for any deal it can muster for its endangered A-380 program. As of October 31, 2017 Airbus has only a 100 unit backlog since it already has delivered 217 of its 317 ordered A-380's. Boeing's mission was accomplished as it diverted enough orders away from the A-380 order book with about 136 of the 747-8 types to its own order book. Boeing has delivered 124 of its 747-8's since first delivery. Airbus would love to have those 136 Boeing orders in its books as the A-380 is going the way of the Dinosaur just like its competitor's 747 program.

Boeing always always knew the 747-8 program was a Pyrrhic wrench thrown at Airbus in an attempt at denying Airbus revenue throughout the A-380 program duration. The 747-8 is probably resting in pieces at Everett Wa, facility at this time with a Mission Accomplished banner waving over the big production factory doors for the 747.

Airbus has flown to China with hat in hand and gifts that may impress an emperor if one still existed in China. If Airbus would give China a two fer deal, then China would gladly buy some A-380's, but not enough to save Airbus' face over the whole Jumbo debacle.  A sweeping deal would be 50 A-380's at half price of list for China. It wouldn't save the A-380 program over-all and would only extend building them for a couple of years.

No press has reported A-380 deal progress from the Airbus visit at this late date:

News release from Airline geeks:

"Neither side has commented on the possible deal or details of it. Macron concluded his visit on Saturday with no announcement being made immediately upon his return. It is, however, unusual that a government makes the sale of a commercial aircraft part of a state visit agenda. While Airbus receives a lot of support from the French and German governments, politicians have so far been hesitant to engage in sales pitches themselves."

Airbus wants a 100 unit deal as the sales visit draws to a close. No word has come from the talks only muted speculations. Macron is home with what appears as a big goose egg on his accomplishments for Airbus. However, a deal could come later after negotiations are completed by the principles involved through these meetings. The best hope is Macron laid out what the French government is willing to do for China. Silence after his return home is not promising. Airbus remains behind for wheeling and dealing its way towards saving face.

If China has a business plan for its special needs, then a deal will be made, but if it can't find an A-380 plan for its masses with 500 seats at a chop, then it becomes a Wonton soup festival served with French butter. Silence is a key Airbus tactic until the last day of an airshow or end of year order announcements. Its January and the next big airshow is months away. Macron went home to sit on his hands and China has asked Airbus for the US missile defense system launch codes before a deal is done.

The Chinese business case is flying masses on Airbus' A-380's at a 737 price of operation and of course those missile codes just mentioned after Macron went home.

The real case may be made by Emirates who happens to own 100 A-380's and is the same number under consideration by China. Airbus fears an Emirate bolt from the Airbus fold with this model type. China could ask Emirates a few questions and it may affect a Chinese decision for the A-380.

Image result for a-380

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