A380 Super-Jumbo

The Airbus A380 is the worlds largest passenger plane and was thought to be the future of aviation. Emirates, a Dubai based airline, owns 86 of these monster jets which equates to almost half of the world’s supply. Demand for flights through Dubai, the “super-connector” airport once seemed insatiable. Positioned halfway between Asia and Europe, the airport offered connecting flights to Cape Town, Cairo, Moscow and Shanghai. With soaring passenger volume through Dubai high demand for flights airlines such as Emirates purchased a string of Airbus A380s beginning in 2008 attempting to maximize profits through airline ticket sales.

Over the past year, problems have mounted. Low oil prices have impacted the neighboring economies and reduced regular regional travel. Also terrorism in cities and airports have dampened tourism.

This external shock has caused a decrease in demand for flights out of Dubai. This decrease in demand has caused Emirates to slash ticket prices in order to fill the seats on the Airbus. Profits have decreased also The Economism.com states that “earnings have tumbled by 75%.” Airbus is on the hunt for new buyers in big markets where demand is far greater such as China and Japan.

 

http://www.economist.com/news/business/21710850-three-years-ago-emirates-rescued-a380-aeroplane-its-own-problems-now-cast-doubt

2 Comments »

  1. withersm Said,

    December 7, 2016 @ 4:42 am

    With these shocks sometimes being unpredictable, especially terrorism, does Emirates have a back up plan to keep themselves financially afloat?

  2. anigbos Said,

    December 7, 2016 @ 6:06 am

    This is a great example of how oil prices can affect a whole industry. Oil prices not only affect planes but vehicles and factories as well. This affects the demand for anything in certain industries that involve oil.

RSS feed for comments on this post · TrackBack URI

Leave a Comment