Trouble for Emirates Air could impact demand for world's biggest passenger plane

At the world's major airports, plane-spotters often spend days waiting for the world's largest passenger plane, the Airbus A380, to make an appearance. The nerds at Dubai International Airport are spoiled for choice.

It is home to Emirates, an airline that owns 86 of the monster aircraft, almost half the global A380 fleet. These planes have propelled Emirates from insignificance a decade ago to its position as the world's biggest carrier, as measured by international passenger mileage in 2015.

Now the airline has hit a rough patch. That is bad news for Airbus, the European aerospace and defense giant that makes the A380, and for the plane itself.

Demand once seemed insatiable for flights through Emirates' hub in Dubai, which is known in the industry as a "super-connector" airport. Now its location helps explain the airline's difficulties as well as its spectacular past growth, says its president, Sir Tim Clark.

When he helped set up the airline in 1985, he says, Dubai was "an enchanting Arab village" that generated little air traffic. Instead of filling up the planes with locals, his strategy was to use its position halfway between Asia and Europe to connect flights between cities that lacked obvious links, such as Cairo and Shanghai or Moscow and Cape Town.

Connecting these "strange city pairs," as he puts it, led to soaring passenger numbers. A string of purchases of A380s, starting in 2008, helped traffic to more than double to 51 million in 2015. Good airport facilities and access to cheap labor (even expatriate pilots are inexpensive in Dubai because of low taxes) contributed to profits as well: the airline has the lowest costs of any long-haul carrier in the world.

But over the past year or so problems have mounted. Low oil prices have hit the economies of many of Dubai's neighbors, reducing regional passenger traffic. Terrorist attacks in cities and airports in Europe and the Middle East have dampened tourism activity generally.

"We used to have one of these business-damaging events once a year but now we have them more than once a month," groans Clark. In the year to March, Emirates made a record $1.9 billion in profits, but since April its earnings have tumbled by 75 percent. Weak demand has forced it to slash its fares to keep planes full.

Emirates can take some solace from the fact that its super-connector rivals in the Middle East — Etihad of Abu Dhabi, Qatar Airways and Turkish Airlines — are also hurting. Turkish Airlines has had to suspend flights on 22 routes and mothball 30 planes. Industry analysts reckon the airline will this year suffer its annual loss for a decade. Qatar and Etihad may also end up in the red.

Tricky geopolitics is nothing new for Emirates, which was founded during the Iran-Iraq war, argues Clark. Dubai is trying to boost its own tourism industry, which should help replace some of the connecting passengers the airline is losing. No one doubts that it will pull through.

Emirates' appetite for the A380 is a different story. That may dwindle more quickly than Airbus had anticipated. On Dec. 2 the first planes in a new batch of superjumbos are due to arrive in Dubai. In total, Emirates has a further 56 A380s on order: 31 are to be delivered between now and 2019, with another 25 due to arrive in the 2020s to replace older ones nearing retirement.

Emirates rescued the A380 program with its last big order in 2013. The airline had wanted to buy another 200 A380s equipped with more fuel-efficient engines. But in current conditions Clark said there is little chance of his airline making another large order anytime soon.

So Airbus is on the hunt for new buyers in China and Japan, places where runways are most congested and the need for larger planes is most acute (the firm originally gave the A380 its name because eight is considered lucky in some Asian countries).

Chinese airlines have only bought five so far. If they do not step up, as Emirates once did, plane-spotters will have even more reason to cherish their sightings of the A380.