Airbus will end A380 production – There is a story in the press this morning that Airbus has decided to stop making A380s in 2021. The decision was made after Emirates scaled back its orders for the plane. Those funds that own and lease A380s to Emirates – the three Doric Nimrod funds and Amedeo Air Four – have all seen sharp falls in their share prices this morning. The falls reflect uncertainty over the second hand value of these planes.
You can read the story on the BBC website here
[QD comment: maybe the falls are justified if these planes have no second hand value but a back of the envelope calculation suggests that with Doric Nimrod Air One, for example, which owns an A380 that will be 12 years old in November 2022 and which is leased to Emirates until then, you could buy the entire fund now for about £43m, the debt will be paid off by November 2022 and you’d get dividends of about £15m between now and then. That means you can pick up a 12-year old plane that cost over $400m new for about £28m.]
DNA / DNA2 / DNA3 / AA4 : Airbus will end A380 production