Airbus superjumbo gets huge lift from Doric order

LE BOURGET, France - European aircraft maker Airbus made a big breakthrough for its flagship A380 superjumbo airliner on Monday, taking the first order for the plane this year after a setback over cracks in the wings.

The provisional order, for 20 superjumbos worth about US$8.0 billion (S$10 billion) at list prices, came from Doric Asset Finance, a leasing group which will make the A380 giant accessible to many airlines via rental agreements.

The order puts Airbus on track to achieve its target of 25 deals for the superjumbo this year, after falling far short of its target last year The deal, important for Airbus in its efforts to boost sales of the aircraft, the giant of the skies, comes just three days after another milestone, the maiden flight of its new long-range A350 aircraft.

Airbus head Fabrice Bregier told the Wall Street Journal newspaper on the opening of the Paris Air Show at Le Bourget on Monday that the firm hoped to more than double its operating profit in the next two years.

It intended to raise the operating margin from 4.0 per cent to 10.0 per cent, he said, adding that the target excluded the launch costs of the A350.

Last year was a difficult one for the A380 superjumbo because micro cracks were detected where the wings join the fuselage.

Airbus is correcting the problem, but the manufacturer had taken no orders for the A380 since the beginning of 2013, and last year it took nine orders instead of the targeted 30.

Leahy said that he was holding to a target of selling 25 A380 aircraft this year.

Boosting sales of the A380 is of particular importance to Airbus, which said in a statement that with this investment Doric would be able to offer the aircraft on tailor-made terms for airlines.

This would facilitate use of the plane by airlines around the world, Airbus said.

Doric Asset Finance has provided finance for orders by airlines such as Emirates and Singapore Airlines.

Under leasing arrangements, an airline enters into a rental agreement with the leasing company, thereby avoiding having to find the purchase capital from its own resources.

Airbus said that Doric was the third-biggest such company in the world, in terms of value, providing leasing arrangements for jumbo aircraft and was the biggest in terms of managing such deals for the A380.

Doric currently manages aircraft worth US$6.0 billion, including 18 A380 airliners purchased under sale and leaseback agreements, so the latest deal represents a substantial increase for the leasing group.

The latest agreement in principle, or outline deal, is expected to be confirmed in a few months' time, Leahy and the chief executive of Doric, Mark Lapidus told a press conference.