- Emirates agreed to order 20 Airbus A380 airliners along with an option for 16 additional superjumbos in January.
- Now, the $16 billion deal is reportedly in trouble, according to Bloomberg.
- Negotiations between Emirates and engine supplier Rolls-Royce have hit a snag. The two parties can’t agree to a price and fuel burn standards for the engines which have caused Emirates to miss an engine selection deadline.
- This may cause delivery delays and could even threaten the viability of the entire order.
In January, Airbus and Emirates agreed to a firm order for 20 Airbus A380 airliners along with an option for 16 additional superjumbos.
The Emirates deal was the first major airline order for the A380 program since Emirates’ previous order in 2013 and will allow Airbus to keep the A380 production line running for another decade.
But the deal, with a value of up to $16 billion, is now reportedly in danger.
According to Bloomberg, people familiar with the matter have told the publication that negotiations between Emirates and engine supplier Rolls-Royce have “hit a snag” which could lead to possible aircraft delivery delays and “even threatening the deal outright.”
The main points of contention are regarding the price and the fuel burn on a Rolls-Royce engine “that’s already falling short of performance parameters,” Bloomberg reported. This is compounded by the fact that Emirates has also reportedly missed the deadline to make its engine selection.
Airbus, Emirates, and Rolls-Royce have all declined to comment on the matter.
Engine Alliance, a joint venture between General Electric and Pratt & Whitney, is the only other engine supplier for the Airbus A380. Engine Alliance was not immediately available for comment. However, the JV told Bloomberg that the company has offered to provide Emirates more of its GP7200 engines.
The majority of the Emirates A380 fleet is powered by the Engine Alliance GP7200. However, the Dubai, United Arab Emirates-based carrier switched over to Rolls-Royce in 2016 with the hopes that the British manufacturer will help reduce the superjumbo’s operational costs.
However, the Emirates/Rolls-Royce relationship proved to be a rocky one. Emirates Airline president Sir Tim Clark complained of “technical issues” with the Rolls-Royce engine even before the first A380s were delivered.
Emirates is the Airbus A380’s largest and most important customer. January’s deal brought the airline’s total commitment to the A380 program up to 178 aircraft with a total value of $60 billion.
Source: Business Insider
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