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Emirates buys super-jumbo
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May 1, 2000: 6:48 a.m. ET
Middle East airline in $2.5B launch order for 555-seat A3XX giant from Airbus
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LONDON (CNNfn) - Dubai-based Emirates Airline said Monday that it planned to plans to introduce the Airbus A3XX, the world's largest passenger aircraft, on routes from its base to London, Singapore and Australia from 2005.
Emirates on Sunday announced a $2.5 billion order for five of the new 555-seat aircraft being developed by Europe's Airbus Industrie consortium.
Emirates has the option to increase its order to 10, which may include two freighter models. The first five aircraft are due to arrive in 2005 and 2006. The order is valued at around $2.5 billion based on the A3XX list price, though Emirates can expect to secure steep discounts by becoming a launch customer.
 The first A3XX order is seen by analysts as a huge boost for Airbus and its plan to develop the world's largest passenger jet, as it battles to overhaul Boeing as the world's largest maker of commercial airliners.
Boeing's (BA: Research, Estimates) 747-400 jumbo jet currently has a monopoly in the market for jets with more than 400 seats, and is the Seattle-based firm's most profitable product.
Airbus, a consortium owned by DaimlerChrysler Aerospace, Aérospatiale-Matra (PARO), BAE Systems (BA-) and Spain's Casa, is investing around $12 billion to break the stranglehold of the 747-400.
Emirates adds credibility
Airbus is expected to announce it's the formal go-ahead for the A3XX project next month, including plans to extend the aircraft at a later date to carry up to 650 passengers.
However, while airline traffic continues to soar, market observers have expressed reservations about likely demand for such a large aircraft. Some analysts have said airlines are more interested in increasing the frequency of their flights, by increasing the proportion of smaller aircraft in their fleets.
Although Airbus maintains there is a market for 1,200 super-jumbo aircraft by 2020 - around half of them in Asia - Boeing has poured scorn on the A3XX project.
The order from state-owned Emirates gives the A3XX the support of an airline that is seen as one of the most innovative and profitable in the world, having expanded rapidly since its launch 15 years ago.
Analysts believe its decision will boost confidence in the A3XX program and encourage other potential customers for the jet, such as Singapore Airlines, Cathay Pacific, Virgin Atlantic and cargo carriers FedEx and Atlas Air.
Emirates currently has a fleet of 26 Airbus and Boeing aircraft which carried 4.25 million passengers last year. On Sunday, it reported a 4.3 percent rise in net profit to $122 million for the 12 months to Mar. 31. Revenues rose 15.9 percent to $1.52 billion. 
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