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April 12, 2024
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Emirates’ recent order for another 50 A380s came with a catch.  Its prior A380s came with the Engine Alliance (GE & PW) GP7200 engine.  But with the latest order the airline has thrown open engine orders to both Rolls-Royce and Engine Alliance. Is this a bluff?

Rolls-Royce announced it now has been given approval for its EP2 on the A380 engine known as the Trent 900.  The Trent 900 EP2  offers a fuel burn improvement of up to 0.8% and will become the new build standard for Trent 900s once full certification is achieved.  Although the GP7200 engine has the most orders on the A380, Rolls-Royce has the most customers.  Winning the Emirates order would be a huge win for Rolls-Royce and we expect the company to make every effort to pull this off.On the other hand, the GP7200 engine has been doing very well.  To date the GP7200 has had a 1% better fuel burn than the Trent 900. So the EP2 update the the Trent 900 brings it closer to the GP7200’s fuel efficiency.  From what we understand, the GP7200 numbers look very good in Airbus’ “Orange Book”. Its been this way for a long time too.  Clearly the Engine Alliance team will not give up the fight now.

Emirates seeks a 10% improvement in fuel burn.  As matters stand the request is reasonable – Emirates president Tim Clark said “…the 380 needs to get the benefit of what is going on in the mid-sized fans and the twins. To leave the 380 in the position where it isn’t [improved] doesn’t make any sense.”  Given what we see with the latest generation of engines there can be no argument.   Besides Mr Clark is aware of the compelling numbers for the GE9X and Trent XWB.

In the end, looking at the options, it might seem Mr Clark is bluffing.  Neither Rolls-Royce nor Engine Alliance will seek 10% better fuel burn out of their current engines given only 200 potential engine orders.  A380 sales, at present, don’t make this a rich vein to mine for new investment. The investment required to tweak the next generation of engines (i.e. Trent XWB or GE9X) probably cannot provide the ROI to justify the expense.

Doric is talking about tweaking its A380s – “When we put the proper seat count on the plane, the economics are unbeatable and will remain unbeatable,” Doric Chief Executive Officer Marc Lapidus said.  Mr Clark is also talking about 11 abreast.  This, in our view, is the way to get closer to 10% better fuel burn. For Emirates, this means 34 (v1) or 35 (v2) extra economy seats.  These extra seats provide nearly 9% more capacity for probably the same fuel burn.

Besides extra seating will not require the engine makers to invest too much.  Which is probably why Engine Alliance’s President Dean Athans uses words like “…a whole suite ranging from little things to longer term, more substantive changes…” Consequently we expect to see the engine makers come up with some better numbers, but the bulk of Mr Clark’s 10% goal will see a lot more seats on the Emirates A380s.

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3 thoughts on “The A380 engine bluff

  1. The argument that the ROI for an engine tweak is unjustifiable kind of flies in the face of the fact that RR is in fact going ahead with an engine tweak. A 10% increase is not an engine tweak, and is really a new engine. I don’t believe the stated competition for future orders between RR and EA’s current offerings (with tweaks) is the exact same topic as the stated desire for future 10% increase in efficiency. The latter is about a new engine (which would require Airbus’ involvement, and almost certainly other updates to the airframe to go along with it), not tweaks of current ones… Emirates is wanting to pursue both in different time scales. Having an ‘interim’ tweak is probably a good idea for residuals if they are planning on selling on their 380’s whenever a real NEO-X version of 380 is available, and having some of their fleet ‘split’ in engines (current vs. competed tweak vs. future NEO-X) is not an imposition in fleet commonality considering that a 50/50 split for Emirates would still outweigh any other operator’s entire fleet, a current engine->competed tweak->NEO is in fact their best approach for efficiency over time. As for future 380-X, Emirates of course would like even larger models, although a shrink may be Airbus’ best marketing option… Either way, any such changes/NEO is still rather far out at this point, Airbus’ current book goes almost to 2020 and Emirates is talking of future orders competed between tweaks of current engines, so any such 380-X could be closer to 2025-2030… Possibly aligned to share engine(s) with a clean sheet 330 replacement, following a shorter term NEO of that platform?

  2. The obvious question is : why is Tim Clark inviting Rolls-Royce into the game, instead of just negociating with his present engine supplier, EA ?

    The likely answer is that Rolls-Royce has promised, if they are given the opportunity and if there are enough orders at stake, to offer much more than a 1% improvement. The promise may be the reason for the unusual size of EK’s latest order.

    So, you are probably wrong to dismiss the prospects of any serious engine improvement, though the timeline is still unknown.

    Airbus’s own initiatives are additional upgrades. This is a concerted effort to keep the A380 competitive.

  3. Much adou about nothing. Clark has an investment in A380s he wants to advance but the economics are bad.

    Keep in mind that Airbus is not sold out with all the deferred orders and outright cancellations the 50 Airbus just fill that in and return the whole thing to firm (or as firm as it gets as others are also shaky).

    Clark want to retire his early A380s and you have to ask, who will take them and why? If they don’t work for someone now and Airbus can’t sell them at huge discounts then what happens with the left overs?

    Maybe FedEx or UPS will convert them to Cargo!

    And no one is going to develop a whole new engine for the A380 as there is no future. GE and P&W will probably continue to tweak the GP7200 to keep ahead of RR.

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