Vincent Lamigeon at Challenges, in France, published an interesting article today suggesting that Airbus knew of the cancellation of a 70 aircraft order from Emirates well in advance of their disclosure during Innovation Days. Â The article links to Emirates’ annual report, that includes more recent A380 and 777X orders but did not include the A350 order.
This, combined with news today that Emirates may reconsider the A350 order, presents a confusing picture. Â We have translated the article, without links or tables, below.
“Cancellation of Emirates A350 – a Disturbing Document
The cancellation of the order of 70 A350 Emirates, finally announced on June 11 by Airbus, did the company tell all their secrets? Fabrice Bregier, CEO of the aircraft manufacturer, wanted to cut short any discussion that evening at a dinner in front of 200 journalists gathered for the airframer’s Innovation Days: “There will be zero negative impact, he assured- there. I’m not saying there will be a positive impact, but there will be no negative impact. Does it hide something? Is this a problem for us? The answer is clearly no.”
One element still poses question, two weeks after the warning shot: the timing of the announcement. Does this have a connection with the order for 50 A380s, announced at the Dubai Airshow in November 2013? In which case, why did Airbus not release the information before? Questioned at the Airbus Innovation Days June 11, John Leahy responded clearly: “If the cancellation was decided last year, it was reported last year. The order was recently canceled.”
A few minutes later, the super salesman for Airbus was even more specific. Asked about the moment he heard of the cancellation, he replied, a bit irritated: “I discovered it when we publicly disclosed. If I knew that Tim Clark [the Emirates boss] was reviewing its fleet? Tim is constantly reviewing his fleet.
Yet, it seems that Emirates had already officially recorded the cancellation of its A350 order from early 2014, as an official document attests. In its 2013-2014 annual report (here in PDF) published on 8 May, the Dubai-based company summarized in a table, reproduced below, its current fleet and orders, dated “March 31, 2014.” And then, surprise: the last orders for the A380 and 777X are included, but there is no trace of the 70 orders for the A350, which were officially canceled on 11 June, more than two months later.
Had Emirates somehow anticipated the cancellation? Is the latest news due to last minute attempts to save the Airbus order? The issue has, as yet, no satisfactory answer. Asked by Challenges, Airbus assured us they had not received the official cancellation until “a few hours” before the formal release.”
Its clear that Airbus and Emirates are firmly tied together through the A380 program. We do not see how Emirates would need to “send a message” to Airbus by cancelling an order. The initial cancellation is, in our view, the dropping of the first shoe. Strange as the story has been so far, its not close to being over yet. As Mr Leahy says, “Tim is constantly reviewing his fleet”.
Does it really matters? Why would that be a problem?
Yes.
Challenges is often clued up. This chimes with what I have written for upcoming issue of Aviation Strategy monthly letter. Emirates only wants bigger A350 and 380s.