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The future of the A380 is threatened when Emirates wanted to cut orders

Airbus has announced that it will stop production of the A380, the largest passenger aircraft in the world, ahead of schedule as Emirates, the aircraft's primary customer, prepares to significantly reduce its order.

Representatives of the European aircraft manufacturer and the Dubai-based airline were in talks on Wednesday evening about the exact details of a decision, two people reported to have been informed of the talks.

Emirates is discussing reducing the 53 A380s it has ordered to around 20, said one person. Instead, the airline would use a mix of A350 and A330 jet aircraft, although the exact layout was yet to be decided. It could also decide to buy some additional aircraft from Airbus' rival Boeing.

Both informed the talks with the warning that a final announcement on the future of the program, which is expected to follow alongside Airbus final results on Thursday, may still give way. The Airbus board, led by chief executive Tom Enders, was due to meet on Wednesday to approve a final decision.

If confirmed, this would mark the end of the superjumbo era and underscore the industry's shift towards smaller, more fuel-efficient aircraft.

Emirates' $ 16 billion commitment to purchase an additional 20 aircraft – with an option for 16 more – reached a lifeline for the program last January, securing production of the A380 for another decade. The airlines were reluctant to engage in a four-engine aircraft that would carry between 500 and 800 passengers and fly at full capacity to be efficient.

Emirates already operates a fleet of more than 100 A380 aircraft and still has 53 orders, including the 36 that were covered by the Memorandum of Understanding last year.

Since then Airbus and Emirates have been trying to conclude their agreement. Another complication was that talks between Emirates and Rolls-Royce over the provision of aircraft engines had come to a standstill late last year.

Even with Emirates' new order, Airbus planned to reduce its A380 production to at least six aircraft per year from 2020, compared to 12 in 2018 and eight in 2019.

Jefferies analysts earlier this month stated that Emirates, which would reduce their order, could mean the end of the A380 program. Sandy Morris, an analyst at Jefferies, said that although the backlog for the A380 was 87 at the end of 2018, he believed that only 58 orders – three from All Nippon and 53 from Emirates – were "robust."

"If a significant portion of the Emirates order is canceled, we believe the A380 program must end," he said in a statement.

If confirmed, the decision to terminate the A380 program – after only 12 years in use – would be a blow to the Airbus bet that airport traffic jams and increased international air traffic would lead to demand for larger aircraft. Instead, the industry has evolved into smaller, more fuel-efficient two-engine airplanes, boosting demand for the Boeing 787 Dreamliner and the Airbus A350.

The Australian airline Qantas contributed to the uncertainty earlier this month, with which the program has already been announced. It announced that it had canceled a pending order for eight A380s from 2006 and instead would improve the already 12 superjumbos.

Airbus and Rolls-Royce declined to comment. An Emirates spokesman also declined to comment.


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