Friday, August 19, 2022

The A380 put investors at risk


Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at
Recent speculation about the uncertain future of the A380 are likely to displease to shareholders of Airbus. If the major customer Emirates actually jumps off this time and changes, for example, to the smaller twin- engine, but more modern long-haul aircraft A350, this would also give German fund investors restless nights. With closed-end funds, they have co-financed many of the four-engine passenger airliners that are on long-haul flights around the world. Less interest in new A380 also promises little good for the second-hand market and therefore great uncertainty for investors.


Because the supply of used giant aircraft is growing. Likewise, Air France now plans to stop flying five rented – and fund-financed – A380s. This was said by Benjamin Smith, the new head of Air France-KLM, a few weeks ago in conversation with the French media.


Air France will gradually reduce the number of A380s from ten to five and keep only the machines belonging to the group. The idea is to invest in better cabins, but two of the five leased machines will be returned to owners by the end of 2019, Smith said.


The first ever A380 customer in 2007, has meanwhile returned five of the used jumbo jets, but finds it difficult to get new customers. The Asian group had not taken up the option to renew all five leases after the regular leasing period of ten years.


Last year, these used A380s were completely redone and returned in white lacquer, especially in the previous year – four to the fund management company Dr. Ing. Peters Group and one to the financier Doric. In principle, aircraft can then be rented further or sold as a whole or in individual parts.

While Doric found the first customer for a sub-lease agreement for an A380 in the summer of 2018 with the Portuguese aircraft rental company Hi Fly, the investors in the fund decided to go with Dr. Ing. Peters Group for another way.


Two of their flying giants are currently being disassembled and sold in parts because no matching other customer was found. Two more A380, parked in southern France, are still awaiting further use.


They are working on a solution that will lead to a positive result for equity investors, says Ulrike German, spokeswoman for Dr. Ing. Peters group. Only the engines were leased in the meantime to the engine manufacturer Rolls Royce.



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