Emirates Cranks Up A380 Redo Call as Clark Maps Out Global Push

Emirates, the biggest international airline, said it aims to take 25 of the 140 A380 superjumbos it has on order in the form of a re-engined variant, cranking up its campaign for Airbus Group NV (AIR) to revamp the double-decker.

The Dubai-based carrier would also be prepared to place follow-on orders if Airbus commits to making a version of the A380 offering a 10 to 12 percent improvement in operating economics, President Tim Clark said today in Qatar.

“I’m hoping to move on that soon,” Clark said of the upgraded jet, known as the A380neo in line with the re-engined version of the manufacturer’s single-aisle model. “When you the fill the A380 with 500 seats it makes good money. That’s the message I try to get out to the whole airline community.”

Emirates has placed more than one-third of orders for the A380, which lacks the industry-wide installed base of smaller models even after almost 14 years of sales. While Clark views the A380 as the “mainstay” of his company’s intercontinental operations, he says it still needs more fuel-efficient engines and aerodynamic improvements to deliver peak performance.

Clark topped up an order for 90 A380s with 50 more at November’s Dubai Air Show, and said today the contract has an option for the purchase of a batch of Neos if offered by Airbus.

The superjumbo is “hugely popular” with customers and “makes good money,” according to Clark, who said rival carriers are “a tad risk-averse about the aeroplane.”

Engine Issue

Air France-KLM (AF) Group has said it may seek to trade the last two of 12 A380s on order for other models, while Deutsche Lufthansa waived options for an additional three after ordering 10. Virgin Atlantic Airways Ltd.’s entire order is on hold.

The A380 comes with two engines choices: Rolls-Royce Holdings Plc (RR/)’s Trent 900 and the GP7200 built by the Engine Alliance, a joint venture of General Electric Co. (GE) and United Technologies Corp (UTX)’s Pratt & Whitney unit.

The Emirates jets have Engine Alliance turbines, though Rolls-Royce would probably be more interested in equipping the A380neo, Clark said at a briefing in Doha during the International Air Transport Association’s annual meeting.

The executive said he’s cautious about focusing too many new flights on Asia given the number of seats already on offer there and the likely repercussions of “China going south” just as the wider global economy recovers.

Pacific on Hold

“Let’s be quite honest, there are some capacity issues in Asia,” he said. “It’s very difficult to operate there profitably. I think we’ll watch with interest.”

Clark said the situation means Emirates won’t yet be rolling out a wave of A380 flights from Dubai across the Pacific via multiple cities in East Asia, a move that would project it into the one major long-haul market where it currently has a limited presence.

“We’ve got a lot of other things going on where the opportunity costs of the aeroplane would be better served than doing the trans-Pacific,” he said. “The time’s not right.”

Emirates has further flights “up our sleeve” to Australia, and is operating the A380 successfully to Thailand, even after the coup there, Clark said. India is a “very strong market,” though best suited to a two-class A380 layout that would limit deployment options elsewhere, he said.

Flights begin to Oslo on Sept. 2 and Brussels on Sept. 5 and Clark said the carrier is increasing capacity to Germany even in the face of obstacles to adding new cities there, though the carrier will “not perhaps add so many points” in Europe as it has in the past five years.

“We must be mindful that we’re not overcooking the whole thing,” he said.

To contact the reporter on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net

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

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