DORIC NIMROD AIR TWO LIMITED (the “Company”)

AIRBUS A380 UPDATE

The Company notes the statements this morning from Emirates Airlines and Airbus regarding the decision to close production of the A380 in 2021, delivering another 17 aircraft in total to Emirates (14) and All Nippon Airways (3).

We also note that:

·  There are still several years on the Company’s outstanding lease duration and ongoing lease payments which are unaffected by this announcement.

·        The Company’s leases benefit from full life return conditions (and compensation clauses).

·        That the Asset Manager has been and will continue to be in regular dialogue with Emirates.

·        The A380 remains intensely popular with passengers.

·        The Company’s debt structure is such that all loan liabilities will be fully paid off at lease end (subject to the continued solvency of Emirates Airlines) at which point the aircraft will be unencumbered.
Doric, the Company’s Asset Manager comments:

“We note that Airbus will be delivering a further 14 A380s to Emirates, and 3 to All Nippon Airways before they close production in 2021. At that time, 251 A380s will have been manufactured. Emirates will have received 123 of these, instead of the 178 (162 firm and 16 options) they had originally ordered. His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group stated, “For us, the A380 is a wonderful aircraft loved by our customers and our crew.  It is a differentiator for Emirates. ….. The A380 will remain a pillar of our fleet well into the 2030s.”

‎We also note that other customers have expressed interest in second-hand A380s, and other airlines dealing with slot-constrained airports may well turn to the pool of A380s. With a finite number of A380s available, this could well prove supportive of the secondary market.”

Amedeo, the Company’s Liaison Agent comments:

“Amedeo considers today’s Airbus announcement to have positive implications for the future values of the installed A380 fleet, particularly those aircraft operated by Emirates.

We estimate that the long-term core Emirates A380 fleet will comprise in excess of 100 A380 units, which we expect will continue to be operated by Emirates for the entirety of their useful economic lives.

We expect the A380 to remain a core aircraft type for Emirates, with higher financial profitability deriving from the longer term use of its A380 fleet. This will act to reduce future capital expenditure, depreciation and rental expenses significantly, whilst retaining the A380’s unit cost advantage of scale and unrivalled customer experience.”

The full Emirates Press Release is available HERE

The full Airbus Press Release is available HERE