Emirates Airbus A380 order is in trouble due to engine deal: Report

An Emirates Airbus A380.
Emirates

• 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.

A Rolls-Royce Trent 900
engine used to power the Airbus A380 at the Emirates maintenance
facility in Dubai.
Benjamin
Zhang/Business Insider

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.