Airbus considers cuts to A380 aircraft production

Airbus has said the A380 can break even at production levels of 20 a year. (Reuters)
Updated 14 December 2017
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Airbus considers cuts to A380 aircraft production

SINGAPORE: Airbus is considering cutting production of its A380 superjumbo to six or seven planes a year, but has made no final decision on the matter, a top executive said on Thursday amid growing question marks over the future of the double-decker jet.
The A380 has battled against sluggish sales, squeezed by smaller, more efficient twin-engined jets, and Airbus has already cut output of the plane from an annual peak of 30 while waiting for a recovery in demand.
“We believe we can produce this aircraft at 6-7 a year in an industrial way,” Airbus Chief Operating Officer Fabrice Bregier said after the first Singapore Airlines Ltd. A380 featuring a new cabin configuration landed in Singapore.
“The A380 will find its way progressively,” he said.
Industry sources told Reuters this week that the company was exploring plans to cut A380 production to as low as six aircraft per year as it battles to make the world’s largest airliner commercially viable beyond the end of the decade.
Following a clampdown on costs, Airbus has said the A380 can break even at production levels of 20 a year, while Bregier has previously said he is pushing the breakeven level as low as possible to sustain low production.
Airbus Chief Executive Tom Enders expressed his confidence in the jet on Wednesday, though analysts say ongoing negotiations over a deal with carrier Emirates will be decisive for the future of the aircraft.
Emirates, which held off signing an order for an estimated 36 aircraft at last month’s Dubai Airshow, wants guarantees Airbus will produce the A380 for the next 10 years.
Reducing output to six a year would help to bridge that period and support key second-hand values while Airbus looks for other buyers, but could leave the program losing money for at least part of the period.


Saudi Aramco to invest in refinery-petrochemical project in east China

Updated 18 October 2018
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Saudi Aramco to invest in refinery-petrochemical project in east China

  • This is the third such project in China that Saudi Aramco has set its sight on
  • Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil

ZHOUSHAN, China/SINGAPORE: State oil giant Saudi Aramco signed an agreement on Thursday to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally.
The memorandum of understanding between the company and Zhejiang province included plans to invest in a new refinery and co-operate in crude oil supply, storage and trading, according to details released by the Zhoushan government after a signing ceremony in the city south of Shanghai.
Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of this year.
This is the third such project in China that Saudi Aramco has set its sight on as it seeks to lock in long-term outlets for its crude oil and produce fuel and petrochemicals to meet rising demand in Asia and cushion the risk of a slowdown in oil consumption.
Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil.
The oil giant had not yet finalized the size of its stake in the project and still needed to complete due diligence, Aramco’s Senior Vice President of Downstream, Abdulaziz Al-Judaimi, said on the sidelines of the event.
Saudi Aramco expects to supply 170,000 barrels per day of Saudi crude to the refinery in Zhoushan when it starts operations, he said.
The first crude carrier supplying the refinery should arrive in December or January, depending on when the project starts, he added.
Aramco also owns part of the Fujian refinery-petrochemical plant with Sinopec and Exxon Mobil Corp, and has plans to build a 300,000-bpd refinery with China’s Norinco. It is also in talks with PetroChina to invest in a refinery in Yunnan.