Emirates' Cancellation of Seventy Airbus A350s Will Not Immediately Impact Values Says International Bureau of Aviation

Whilst the cancellation of the A350s will not pass by without some form of negative impact, aircraft values are influenced more by their overall global appeal and complete order book.  “The significance of Emirates’ order of seventy aircraft, worth around US$22 billion, for their fleet is not actually a positive overall factor in the long term residual value business” says Dr Stuart Hatcher, Head of Valuations & Risk at International Bureau of Aviation (IBA).

According to IBA’s ‘JetData’ fleet database there are currently 34 x A350-800, 539 x A350-900 and 169 x A350-1000 on order.  The 2014 IBA values for the A350 family are from US$124m - $164m for the -800 to -1000 variants.

Dr Hatcher adds “The cancellation is no doubt bad PR for Airbus and the concern will be whether it is a simple matter of Emirates reviewing capacity requirements, or if the airline has been less than impressed with the overall performance factors - such as take-off performance at high temperatures, fuel burn, or range issues.  Perhaps we will have a better understanding in the coming months.  With the Farnborough Airshow only five weeks away it is sensible for Airbus to get the bad news out so that they can make up ground with a positive message next month.”

About IBA

The International Bureau of Aviation (IBA) was established in 1988 to provide independent expert business analysis and to service the needs of the aviation community. IBA advises commercial and business aviation clients, aircraft/engine manufacturers and airlines worldwide. Core services include asset management, online and bespoke valuations, technical and engine management, consulting and commercial services, industry and sector research and analysis.