By Alwyn Scott and Tim Hepher
NEW YORK/TOULOUSE (Reuters) - Europe's Airbus
Airbus teamed up with the same airline that canceled 70 A350s on Wednesday, Dubai's Emirates, and leasing company Amedeo to sell potential buyers on the merits of the A380 superjumbo.
Emirates is by far the biggest customer of the A380 but is disappointed that more airlines do not share its vision for the double-decker and shares an interest with Airbus and leasing partner Amedeo in developing a market for the $400 million jet.
But the pitch was not made directly to airlines. Instead, the companies went to New York to convince financiers and Wall Street analysts that the massive aircraft will not threaten industry profit margins and in fact would make economic sense.
If U.S. airlines don't use the A380, "they are leaving profits on the table for others to take," said Mark Lapidus, chief executive of Amedeo, speaking on the sidelines of a briefing at New York's John F. Kennedy International Airport.
"We are a little concerned with how the Street will react to enlarging capacity," he said, noting that the executives of Airbus, Emirates and Amedeo are here to "broaden their knowledge" of how the airplane can make money.
By flying 500, 600 or more passengers into airports such as London Heathrow or Hong Kong, airlines can accommodate growing demand for air travel without adding additional flights.
"We're able to use it to grow revenue in a way that we wouldn't be able to do with any other aircraft type," said Nigel Hopkins, an Emirates executive vice president.
The major U.S. carriers, American Airlines Group
With many airports "slot constrained" - at or near the limit of number of takeoffs and landings they can handle - airlines face limited scope for revenue growth. But U.S. planemaker Boeing
The briefing came a day after Emirates canceled 70 orders for Airbus' brand-new A350 aircraft, which is smaller than the A380 but has newer technology. It also comes as Amedeo seeks lease customers for 20 Airbus A380s it agreed to buy in February.
As part of the New York briefing, Airbus, Emirates and Amedeo were due to take some 150 analysts and journalists on a special A380 demonstration flight over Manhattan, showing off the A380's quiet cabin and ability to climb quickly to altitude.
Separately, Airbus took another 150 journalists on a special flight onboard an A350 in Toulouse, France, earlier on Thursday, a day after Emirates said it was canceling its entire order for the airplane, worth $16 billion at list prices.
Airbus officials said the A350 flight, coinciding with an annual media seminar, was first mooted before the Emirates move.
Lightly loaded and carrying no bags, the A350 climbed steeply but quietly on take-off and took journalists 31,000 feet above the Pyrenees for just over an hour.
To the surprise of the A350’s first passengers, the flight was accompanied at one point by a French Rafale fighter practicing intercept maneuvers with the agreement of Airbus test crew. It is a common if little publicized piece of co-operation involving Airbus test flights carried out in French military airspace. Because passengers were on board, the French fighter was ordered to stay well away from the carbon-fiber jet.
“This is a very quiet flight. In some parts of the airplane, up in first and business, you hear wind noise more than the engines, so I was very impressed by that,” said Scott Hamilton of Leeham News, an aerospace analyst from the Seattle area.
Analysts said Airbus would be able to sell the A350s at higher prices than launch prices offered to Emirates in 2007.
“It was more bad headlines than substance. Deliveries are in 2019, five years away, and that gives Airbus plenty of time to resell those slots,” Hamilton said.
Still, JP Morgan said in a note that while the cancellation would not seriously dent Airbus’s overall order book, it raised questions over the European planemaker’s product strategy as a revamped version of Boeing’s 777 will fly more people further.
(Reporting by Alwyn Scott and Tim Hepher; Editing by Steve Orlofsky, Geert de Clercq)