Emirates' deal for more A380s hits snag

Airbus' latest order for the A380 superjumbo has reached an impasse amid drawn-out talks involving the engines, according to people familiar with the matter, possibly imperiling a crucial deal seen as a life-saver for the giant aircraft.

The US$16 billion (S$22 billion) accord for as many as 36 additional double-decker aircraft has hit a snag as Emirates negotiates with Rolls-Royce Holdings on price and fuel burn on an engine that is already falling short of performance parameters, said the people, who asked not to be named.

The companies have missed a deadline to select the engines, possibly delaying first delivery in 2020 - and even threatening the deal outright.

Emirates, the A380's only major customer, came to the rescue in January, signing on for more after months of tense back-and-forth.

The Dubai carrier accounts for about half the total order book, having switched to Rolls-Royce as its engine provider a few years ago after using a joint venture between General Electric and Pratt & Whitney on the first batch of the aircraft.

That duo, called Engine Alliance, is the only competitor for the A380 engine, but the joint venture partners have not aggressively pursued the bid at supplying the 36 planes because they have not picked up new orders in years and have turned their attention to other programmes, said the people.

Besides Emirates, the Engine Alliance model is flown by Etihad Airways, Qatar Airways, Korean Air Lines and Air France.

The Dubai carrier accounts for about half the total order book, having switched to Rolls-Royce as its engine provider a few years ago after using a joint venture between General Electric and Pratt & Whitney on the first batch of the aircraft.

Engine Alliance has offered to provide Emirates with more of the GP7200 engines, which have "exceptional fuel burn and durability", the venture said in an e-mailed statement. "We look forward to an Emirates announcement, and we are also focused on supporting their fleet for decades to come."

Spokesmen for Airbus, Rolls-Royce and Emirates declined to comment.

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A version of this article appeared in the print edition of The Straits Times on October 10, 2018, with the headline 'Emirates' deal for more A380s hits snag'. Print Edition | Subscribe