The Airbus A380 program got a major boost after Doric Lease Corp. signed a memorandum of understanding for 20 aircraft on the first day of the Paris Air Show.
Airbus has had no orders for the aircraft in 2013. Once firmed up, this order will be the largest for the A380 since Emirates ordered 32 units in 2010. Doric plans to take delivery between 2016 and 2021 and will choose engines before the end of the year.
Despite the major commitment, Airbus Chief Operating Officer-Customers John Leahy did not raise the 25-aircraft order target for 2013, although he conceded he might “sell a few more.” Airbus is also working to finalize a deal that would fill the last two open delivery slots for the A380 in 2015.
Airbus has accumulated 262 orders for the A380, and 104 aircraft have been delivered.
Doric has already financed 18 A380s on behalf of airlines and is finalizing contracts for four more. But this is the first time the company is entering the A380 leasing market at its own risk.
“The economics (of the A380) are unbeatable and they will be very competitive” even after the new efficient twins like the A350 or 777X 787 become available, Doric Lease CEO Mark Lapidus said.
He argues that the number of routes viable for aircraft seating 400 passengers or more will rise to 400 by the year 2020, partly because of constraints at airports and scheduling concerns. “We are under-ordering if anything,” he stated. “There is pent up demand for this aircraft and we felt we needed to order now.”
The order will help drive the standardization of A380 layouts as the aircraft will be delivered for all-economy main deck seating with the premium classes on the upper deck. “The transition cost (from one airline to the next) will be surprisingly low,” Lapidus explains.
Leahy noted that leasing A380s through Doric will “take a lot of the risk out of the decision to order the A380. We see this is as a breakthrough in marketing the aircraft.”