A380 takes another hit. The Impact EK’s "Hiatus "

The largest customer of the Airbus Behemoth has announced it is taking a breather in A380 deliveries at the end of 2010.

Whether this is a function of the troubles in the Emirate of Dubai is to be seen – however there is one thing for sure – EK is now a pawn in a larger game. The reverberation of the collapse of the Dubai bubble is going to be felt in Toulouse and it is unlikely that Seattle will escape unharmed either.

There is more than the initial list of casualties in the current Dubai World troubles. The issue is going to be the pipeline of future commitments. Consider this – the UAE’s order book of aircraft has been predicated on cheap cash backed by AAA securities. With Dubai’s ability to continue to sustain such ratings it means that there is going to be a significant rise in the cost of money to EK and probably to other entities such as Dubai Aerospace and its various leasing arms. Looking at the disproportionate amount of orders outstanding it will have a long term impact.

Oh yes and another thing – because EK is a healthy business the chances are that it will become a pawn and possibly become collateral for some of the real estate debts is not an unrealistic possibility. In turn this could bring down EK's high value.

Hmm – seems there is going to be tough times all round. The GCC is going to reverberate with this for some time.