(Bloomberg) -- Emirates President Tim Clark dashed Airbus SE’s hopes of pulling in a large order at the Dubai Air Show, saying he’s not buying more of their flagship A350-1000 until engine performance issues have been fixed.
Clark said the engine on the aircraft, built exclusively by Rolls Royce Holdings Plc, doesn’t meet the requirements of so-called time on wing until the next maintenance cycle. Emirates would be in the market for 35 to 50 of the A350, Clark said, in what would add to an existing order book of 50 units of the smaller -900 widebody variant.
“If they can do that at a maintenance cost per hour that’s alright for us,” then Emirates would order the aircraft, Clark said in a meeting with journalists at the Dubai Air Show. “But it’s not doing that at the moment.”
Airbus had sought to follow Boeing Co.’s success in Dubai, where the US company won a huge order valued at $52 billion with Emirates on Monday. The European company is the biggest supplier of the A380 super-jumbo aircraft for Emirates, though that plane is no longer in production and Emirates is currently rebuilding its fleet with new orders to factor in the switch.
Emirates wouldn’t be willing to compromise by getting a lower price, because buying an aircraft that doesn’t perform as desired makes no sense, Clark said. Reliability is particularly important for carriers in the Middle East, who run their aircraft in hot and demanding cycles, putting more strain on their planes.
Clark, calling the Rolls-Royce engine “defective,” said the powerplant only does about a quarter of the maintenance cycle that he’d typically need to see, equal to about 2,000 to 2,500 hours. Airbus doesn’t have any other options on the aircraft as Rolls-Royce is the only engine supplier for that model.
Shares of Airbus dipped as much as 0.9% in early trading in paris, before recovering their losses. The stock has gained 18% this year.
Airbus Sales Chief Christian Scherer, speaking at a press conference in Dubai, said the engine on the A350 is “perfectly fine” and that customers are flocking to the model. The A350-1000, in particularly, has had a very strong year, picking up an unprecedented amount of orders.
A Rolls-Royce official said in a statement that “Emirates is a valued customer and we look forward to supporting their future fleet growth plans.”
Back and Forth
It’s not unusual for airlines and manufacturers to make up shortly after disagreements. Air shows venues for negotiations, and publicly voicing dissatisfaction is a blunt tool to wring concessions from the other side. Both Airbus and Boeing have been at the receiving end of harsh criticism in particular from Middle Eastern buyers, among the biggest purchasers of widebody jets, only for the two sides to reach an accord shortly thereafter.
Clark has used his home turf of the Dubai show in the past to put pressure on both manufacturers. Back in 2017, a large Airbus order for more A380s that looked like a done deal slipped from the company’s fingers. Similarly, in 2019 Clark said at the event that a decision on a purchase of the Boeing 787 would likely be months away as he weighed his options. He signed the next day.
This time, Clark suggested that he’s looking for performance guarantees on the engine before he’s willing to commit.
“In the end, we cannot have a batch of aircraft letting us down all the time, it’ll destroy us,” Clark said. “We want effective, good planes that might not be as advanced, but in the end what we want is reliability.”
--With assistance from Siddharth Philip and Leen Al-Rashdan.
(Updates with previously renegotiated contracts in penultimate paragraph.)
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