Airbus Confident of A380 Sales Goal After Doric’s Order Splash
Airbus SAS is confident it can meet its order goal for A380s in 2013 after an accord with lessor Doric Asset Finance Ltd. for 20 jets gave a much-needed boost to the superjumbo that so far hadn’t booked fresh sales this year.
The memorandum of understanding has a value of $8.1 billion a list price and should be firmed up in coming months, said Airbus, which is aiming for 25 sales this year. The planemaker is working to close open 2015 production slots for the double-decker plane by yearend, with fewer than five vacant positions remaining, Chief Executive Officer Fabrice Bregier said.
“We know that some airlines need the aircraft but they’re reluctant to fund, so we have an ideal partner with Doric making sure that the airlines will develop their markets,” Bregier said in an interview at the Paris Air Show today.
Airbus has had trouble generating demand partly because of the cost of the A380, which sells for $403.9 million at list price, equivalent to about four single-aisle planes. Doric’s plan to buy 20 jets and lease them to airlines will help lure some reluctant buyers, and Airbus will “probably” get another five orders booked by yearend, Bregier said.
Doric expects the monthly rental rate for one A380 to be about $2.5 million to $2.6 million, CEO Mark Lapidus said today in an interview after announcing the agreement with Airbus.
Doric has already financed A380s for Emirates, the biggest operator of the jet, and for Singapore Airlines Ltd. (SIA), the first airline to fly the plane in 2007. There were 103 A380s in service through May, with Emirates flying 33. Doric is the only leasing company to buy the plane, after International Lease Finance Corp. dropped plans for a purchase.
Doric expects the first A380s coming off lease with Singapore Airlines to go back to it in 2017, meaning Doric will have to either find new operators or work out an agreement with Singapore to extend the lease. Doric initially tapped retail investors in Germany and the U.K. for funding for the planes and has since expanded into the capital markets.
Deutsche Lufthansa AG (LHA) has announced a commitment this ear to buy two more A380s, though hasn’t yet firmed that up.
To contact the editor responsible for this story: Benedikt Kammel at email@example.com