Year of the giant

Qantas CEO Alan Joyce noted that customers in particular have enjoyed flying the aircraft. “From a commercial perspective, we’re overjoyed with the reaction that the aircraft has received. It’s the best customer satisfaction figures that we’ve received on any aircraft type. Some months we get 100 per cent satisfaction ratings in some classes,” he said.

The entry into service was no small feat, lasting over six years and involved more than 1000 people from right across Qantas In fact, the introduction of the A380 has also been noticed outside of the industry, with the program winning the Australian Institute of Project Management’s Program of the Year award for 2009. Chairman of the judging panel Simon Woolrych, said, “Three aircraft have entered service as per the planned schedule, program costs are within budget, customer feedback is outstanding and long lasting efficiency improvements have been introduced to the business.”

Qantas’s first A380, VH-OQA named Nancy-Bird Walton was delivered to the airline in September 2008, and following a number of visits to airports around the country, the was placed into service on October 20, operating a service from Melbourne to Los Angeles. Aircraft two and three were then delivered in December 2008, while the fourth aircraft arrived in August this year – some six months later than was originally expected.

By the end of 2009, Qantas is also planned to have taken delivery of its fifth and sixth aircraft. Aircraft five was to have been delivered in July this year, however some glitches related to the aircraft’s trim control system have pushed back delivery of that particular aircraft, and it was anticipated that it would be delivered in December, likely around the same time as the delivery of the sixth aircraft.

Over the next year, the airline is expected to take delivery of a further three aircraft, while all remaining A380s on order are due to arrive before 2015. As such, the delivery of more A380s will allow the airline to increase the number of services being flown by the A380 on its key longhaul routes.

Even though the aircraft was more than two years late, the airline says that it has been a resounding success, and has taken the honour of flagship of the fleet. As expected for a new flagship aircraft, the A380 has been primarily operating on the Sydney and Melbourne to Los Angeles route, as well as the Sydney-Singapore-London route, where Qantas competes directly with A380 services by Singapore Airlines and indirectly with Emirates’ A380s.

Since its entry into service, more than 370,000 passengers have flown on Qantas’s A380s, with the fleet having completed over 12,000 flying hours and more than 1240 cycles. “Our A380 experience has been exceptional – both from operational and customer perspectives,” said Qantas’s group executive Qantas Airlines commercial Rob Gurney. “Our customers and our employees are excited about the aircraft and our expectations have been more than met.”

In Qantas’s operations, the A380 is configured with 450 seats, comprised of 14 First Class suites, 72 Business Class Skybeds, 32 Premium Economy seats and 332 Economy seats. With such a focus on Business and First, Qantas has one of the least dense configurations for its A380s, although it still carries nearly 50 per cent more passengers than its four-class 747-400s.

“The A380 is our new international flagship and the cornerstone of our new generation product offering. Our configuration reflects this and the fact that we operate the aircraft on long haul routes where comfort and product differentiation are important considerations,” said Gurney.

And even in the current international travel downturn, Qantas says that the aircraft are extracting a yield premium, with higher demand on flights operated by the A380. “Because it hasn’t been operating daily, people are actually changing their travel patterns to travel on the aircraft, so it does have that revenue advantage over the 747 services operating around that aircraft,” said CEO Alan Joyce at an October press conference.

While Qantas celebrates one year of its A380 operations, major competitor Singapore Airlines (SIA) has chalked up over two years of service with the type and now operates a fleet of 10.

SIA spokesman Nicholas Ionides told Australian Aviation that the A380 has continued to perform well in service with the airline, after experiencing a smooth entry into service back in 2007. “We are very pleased with the performance of the A380,” he said. “Very few technical problems have been encountered. In fact, its entry into service has been the smoothest of any new aircraft type, ever.

“There were some issues during the initial period of operation, but the Maturity Program prior to EIS provided invaluable flight test data which helped our teams in tackling and managing some of the teething problems faced during the early period.

“The dispatch reliability has remained at a high level, albeit with a few cancellations, given that the aircraft was operated within very tight schedules and with high daily utilisation of more than 13 hours.”

Currently, SIA operates the A380 to Sydney, Melbourne, London, Tokyo, Paris, and Hong Kong, and demand remains strong, with load factors across the A380 network over 80 per cent. “On routes where we have multiple daily frequencies like London Heathrow, Sydney, Hong Kong and Tokyo, the A380 flights are by far the most popular,” he said.

“Very few technical problems have been encountered. In fact, its entry into service has been the smoothest of any new aircraft type, ever.”

Although SIA’s aircraft have 471 seats than the Qantas A380s, they do have some plush interior features, such as 12 full bed suites with its plush First Class cabin, while its 60 Business Class features the same wide flat seats as on its Boeing 777-300ERs. The 399 seat economy cabin is also modelled on the 777.

SIA spokesman Nicholas Ionides told Australian Aviation that the airline has also been pleased with the ongoing reaction to its A380 fleet, and the lower costs compared to the 747-400s it replaces. “We have operated the A380 profitably and with good load factors,” said Ionides. “The superior operating economics made possible by new technology mean lower cost per seat, giving us competitive edge.”

Interestingly, SIA has become the first carrier to use the A380 on a short/medium haul route, with the aircraft operating a daily rotation between Singapore and Hong Kong. “That service in particular is a great commercial success with very high load factors,” said Ionides.
Ionides also notes that with the A380 now flying daily services to both Melbourne and Sydney that there has been a real acceptance of the aircraft by Australian passengers. “The airline’s Southwest Pacific routes have traditionally been very popular among our customers, and our customers flying to and from Sydney and Melbourne on our A380s have given great feedback about the quiet cabin ambience and our innovative product offerings on the aircraft,” he said.

With 10 A380s in service with SIA, the airline has now passed the milestone where its A380 fleet now outnumbers the 747-400s in its fleet, which it has been withdrawing from service. As Ionides explains, this is not unplanned. “The A380 has entered our fleet at a time when some of our older B747-400 aircraft are being phased out, thus acting in part as a natural replacement for these aircraft.”

Compared to the 747-400s, the A380s have approximately 100 more seats. “This means that while there will be capacity growth, it will be incremental and sustainable for the Airline,” said Ionides.

Emirates, which was the first carrier to take the A380 with Engine Alliance engines, is also reporting that its fleet of A380s is performing well. The Dubai based carrier currently operated a fleet of five aircraft, and uses them on services to London, Sydney, Auckland, Toronto and Bangkok. The carrier initially operated a daily Dubai-New York service with the A380, but this was substituted with a Boeing 777-300ER in June this year due to lower demand. Nevertheless, it has said that it does intend to put the aircraft back on the route once demand improves.

On October 30, Air France became the fourth member of the A380 club as it took delivery of its first aircraft (which was also the 20th A380 to be delivered). Air France is also due to receive its second aircraft in December with its third in January 2010. At the time of writing, the airline was planning to commence its first A380 service on the Paris- New York route from November 20.

Over the next year, Lufthansa and Korean Air will become the next airlines to join the A380 club, with deliveries of their first aircraft expected in March and December respectively.

With 19 aircraft in service, Airbus said in November that the worldwide fleet of A380s had amassed over 75000 revenue flying hours on over 7900 commercial flights, carrying over 2.5 million passengers.

Operations and Support

While entering a new aircraft into the fleet is a major task for any airline, both SIA and Qantas report that in its first years of service the A380 has not presented any major issues.

“Our engineers also tell us that while any introduction of a new aircraft will have its teething problems, the A380 has been one of the most if not the most introduction into service of an aircraft program to Qantas, and we have a lot of history in doing that,” said Joyce, who added that anecdotally, the introduction was much smoother than that of the Boeing 747-400.

Nevertheless, Qantas’s acting executive general manager engineering John Vincent admits that there have been some teething issues. “We did encounter a fuel tank indication system issue that affected two aircraft and a nose wheel steering issue on one. Neither presented any safety issue,” he said.

“We have worked closely with Airbus to ensure issues such as these are resolved quickly,” he added.

Qantas’s group executive operation Lyell Strambi told Australian Aviation that the aircraft have overall been performing well. “Dispatch reliability has been very good and our expectations have been met. A small number of technical issues impacted operations for a short period, but generally we have been extremely happy with the aircraft’s reliability and overall performance which we continue to monitor closely.”

On that performance, Strambi notes that the aircraft so far has been meeting its operational benchmarks. “The A380 has met or exceeded all the original performance, noise and fuel burn guarantees made by Airbus at the time the aircraft purchase decision was made,” he said.
That edge could soon become sharper, with Rolls-Royce recently announcing a series of planned enhancements to the Trent 900 for aircraft being delivered from 2012 onwards. Currently dubbed the Trent 900EP, the package draws on technological developments from the Trent 1000 which powers the 787 to reduce specific fuel consumption by an additional one per cent. Both Qantas and SIA, which both have Trent 900s on their A380s, are understood to have expressed interest in the upgrade.

Given the aircraft have only been in service with Qantas for just over a year, the airline so far only performed A checks on the aircraft. These are performed every 750 hours, with C-checks carried out in 24 month intervals, while specific items are also inspected as required.
“These (A checks) have been conducted successfully and no significant issues have been identified,” said Strambi. “We continue to work with Airbus to streamline procedures, techniques and tooling requirements.”

Vincent also noted that Qantas has been involved in a number of Airbus symposia and technical reviews on the A380, while it also has contact with other operators of the aircraft to discuss technical issues.

“The A380 has met or exceeded all the original performance, noise and fuel burn guarantees made by Airbus at the time the aircraft purchase decision was made.”

For SIA, the A380s have meant better operating economics and better reliability compared to the 747-400s. “The A380 is easier to maintain, has improved fuel efficiency and higher operational reliability, resulting in a higher aircraft utilisation and less ground time, and thus improving the economics of the aircraft,” said Ionides.

While turning an A380 is slightly more complex due to the larger area to service, Ionides notes that it is able to turn the aircraft around in 120 minutes, the same time it takes to turn a 747-400. “Internally we have a target of a turnaround time below this for the A380 and we’ve had no problems meeting the target – In fact more often than not we’re able to turn an aircraft around in a shorter time.”

As for flying the aircraft, neither airline identified any particular issues, although Ionides says that there are some key differences for pilots. “Some of the key points pilots have to take note of when operating the A380 is that the aircraft has longer wingspan compared to the other aircraft in our fleet, and it is much heavier, requiring more caution during takeoff.”

Right aircraft, wrong time?

While none of the operators of the A380 appear to regret their decision to buy the airliner, it is becoming clear that it is posing some commercial questions for almost all operators and those with orders.

Qantas and Singapore Airlines have delayed delivery of some of their aircraft due between 2010 and 2012, as both carriers have slashed their capacity to meet the lower levels of demand, particularly for premium travel.

Some analysts say that the aircraft was certainly a design of the heady days before the global financial crisis and is not well suited to leaner economic times where it may simply be too big for some routes. Indeed, many cite Emirates’ decision to take its A380s off the New York-Dubai route as proof that the aircraft will find it difficult in the current economic conditions.

However, others point out that the aircraft is currently operating on routes for which it has been designed to – primarily into congested hub airports such as London Heathrow, Sydney and Singapore, which in some cases is seeing a consolidation of flights. With Air France’s first A380 now in service, it is replacing two flights operated by a Boeing 777 and an Airbus A340 from Paris Charles de Gaulle to New York with a single service.

With Qantas’s A380s largely configured for the premium market with, some have questioned the logic, particularly in the current environment. Still, the airline says that the aircraft is the right one for its network. “Even in the current environment, A380 loads are very strong,” said Qantas’s executive general manager customer and marketing Lesley Grant.

Nevertheless, Qantas has announced plans to soon reconfigure the A380s (and 747-400s) in future to closer match capacity and demand, but has not released what the likely configuration will be. This will likely include an expanded Premium Economy section, possibly at the expense of some of the First Class suites and Business Class. So far, the airline has not released any details of the new configurations.
For its part, SIA has not revealed any plans for it reconfigure its luxuriously appointed A380s, and notes that it is still achieving heavy load factors on services operated by the aircraft.

Elsewhere, Air France has already signalled that it may also reconfigure the A380s it has on order. In part, this will see it add its premium economy product, called Premium Voyageur to the aircraft. Its first A380 is currently only in a three-class configuration, while the product is being rolled out on other longaul aircraft in its fleet.

To complete the reconfigurations on such a big and complex aircraft is likely to be costly. IFLC chief Steven Udzar-Hazy said last year that his company was concerned about those costs, which were estimated at US$100, (A$110m) per aircraft when changing leases. As such ILFC, which is the only lessor to have ordered the aircraft, is rumoured to have been looking at cancelling its order for the aircraft.

What remains to be seen is the effect that such reconfigurations may have on certain markets, particularly for Qantas on the hotly contested Pacific route. While adding more seats will improve the per-seat economics of the aircraft, if the additional capacity cannot be met with increased demand, it could lead to an oversupply and hurt the carrier’s yields.

That hasn’t deterred one carrier from looking at an all-economy configuration for the aircraft. Air Austral, based on the French island of Reunion in the Indian Ocean, has announced plans to configure its two A380s on order in an 840 seat, full-economy layout and operate them on services from Reunion to Paris. In such a configuration, Airbus estimates that the aircraft would burn approximately 1.8 litres per passenger per 100km.

Interestingly, Airbus appears to be increasingly seeking out operators who may be interested in the economics of a densely configured A380, such as low cost carriers based in Asia.

“The A380 is the ultimate low-cost airliner,” Laurent Rouaud , Airbus’s senior vice-president market and strategy said at the Asian Aerospace exposition in September. “I have no doubt that there is a market – especially within Asia – for the A380 with low-cost carriers.”
Currently, no low cost carriers have identified themselves with the A380, so whether Airbus can convince them to take on such a large aircraft remains to be seen.

Overall though, both Qantas and SIA maintain that the A380 is the right aircraft for their main trunk routes. “With its large capacity and long flying range, the A380 is ideal for high-density long-haul routes where airport gate and slot congestion make it difficult for us to add more services using smaller capacity aircraft,” said Ionides.

Similarly, Gurney said, “It allows us to increase capacity on slot-constrained airports in the most commercially and environmentally effective manner.”

Still challenging

After its protracted gestation period and well documented delays and issues involved in moving the A380 to production, Airbus appears to still be grappling with some issues from the A380, with CEO Louis Gallois confirming that it was only likely to deliver 13 aircraft this year, instead of the 14 planned. Some sources indicate that this has more to do with integrating some of the buyer specified cabin equipment rather than ongoing production issues.

Airbus has also cut its delivery targets for the A380 in 2010, with only 20 of the aircraft to be delivered – half the target set out in the original production plans. Parent company EADS also noted in its profit results earlier this year that the A380s were not meeting their cost targets. As such, it is expected that the breakeven figure for the program will continue to rise.

Somewhat fortuitously, this has been a welcome relief for some A380 customers as it has meant that there is less pressure to add capacity onto key markets at a time when yields have been generally lower.

Another challenge for Airbus is selling more of the aircraft. According to its 2009 Current Market Outlook, Airbus expects there to be demand for around 1318 aircraft in the A380 category by 2028 to link major cities around the world. While that may include some sales of the Boeing 747-8 Intercontinental, some question where those sales will come from, particularly as a number of prospective operators have already ordered the aircraft.

As of January, the company could also face its first cancellations. ILFC chief Steven Udvar-Hazy has previously signalled that his company could choose to cancel its orders then under the terms of its contract with Airbus. Still, all airlines with A380s on order have given no indication that they plan to cancel their orders.

For his part, Airbus’s chief operating officer, customers John Leahy appears confident that the aircraft will sell itself. “Actual airline testimonials prove the A380 delivers on promises. Superior passenger comfort and flying experience, better airline revenue generation, and superior turnaround time and airport handling. In short, passengers, airlines, airports and crews love the A380.”

Big shoes to fill

Ever since its launch in 2001, the A380 has had big shoes to fill, and with a number now in service around the world primarily linking the big hub cities, it appears to be hitting the markets it was designed for. Even in spite of the worst conditions for airlines during the jet age, most A380 services appear to be handling high loads and also attracting yield premiums over other aircraft.

Still, much remains to be seen from the aircraft too. With Airbus likely to miss its delivery target this year, it appears that the manufacturer has not improved its production efficiencies, although as time goes on this is expected to improve.

Nevertheless, with a satisfactory entry into service and a strong customer approval, Qantas has set the aircraft to retain key place in its fleet. “The A380 is very much the new flagship of our long haul fleet and will remain so,” said Gurney.