The A380 really is something of a technical marvel. The only full double-decker plane for passenger travel, it was cast by Airbus as a game-changer. But now, as sales have slowed, Airbus is considering whether it should discontinue the plane or re-engineer it with more fuel-efficient engines 7 years after the plane entered commercial service. As noted in the Seattle Times:
While Airbus will break even on the plane in 2015, 2016 and 2017, that outlook doesn’t hold for 2018, forcing the company to either offer new engines to make the A380 more attractive or discontinue the program, Chief Financial Officer Harald Wilhelm told investors at a meeting in London on Wednesday.
His comments come as 2014 shapes up to be the first since the double-decker entered service without a new airliner customer. Its only buyer was a leasing company that has yet to line up a single carrier to take any of the 20 planes it ordered. The backlog remains as thin as it is fragile, highlighted by the cancellation of six jets ordered by Japan’s Skymark Airlines, with two close to handover.
This doesn’t come as a big surprise to me. For starters, there isn’t a natural fit for customer demand on flights in the US. While there may be hundreds of folks to move between major cities, the public prefers more frequency. The need to move 500 people or more all at once doesn’t come up often.
It can make a lot of sense for long international flights, especially given a range of over 8,000 miles. It’s one of the reasons Emirates has ordered so many planes. They’ve done a good job maximizing some routes with these planes, representing almost half of the total orders for the A380 on their own.
Generally speaking, Airbus and Boeing need many years and a large number of airframes sold to justify the up front development costs. It appears that Airbus still isn’t making money on the planes themselves, which isn’t a surprise. It can take years to dial in production on a new aircraft to the point that it becomes profitable. Ending production in the near future likely means significant financial losses.
I’ve ridden the A380 a handful of times and enjoyed every experience. The upper deck on the A380 is one of the quietest places in the sky (roughly on par with the 787 Dreamliner, IMO). The width and height allow for planes to get creative with bathrooms, seating and even your own apartment on a plane. The plane offers a smooth ride and a memorable passenger experience.
In the end, though, there just isn’t that huge a demand for a plane of this size. The article notes that Airbus thought the global demand was for 1,200 planes. That surprises me, given that the total production for 747s over the course of 40+ years was 1,500 planes. With the advent of twin-engine craft that can fly as far as the 747 (see 787 Dreamliner), if Airbus really thought that they would have this demand strikes me as a big miss, either in assuming they could command all the replacements for 747s or that the market would grow noticeably.
HT: Airways News On Twitter
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