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Counting the cost of the A380 grounding

written by australianaviation.com.au | November 26, 2010
Back in the air.

With the first of Qantas’s A380s to take off on Saturday on a revenue flight for the first time since their grounding after the QF32 incident, it’s worth considering the cost that the airline has had to bear with having its flagships out of service.

For the three weeks the entire fleet was grounded, possibly millions of dollars in lost revenue has been forgone, although the bleeding has been stemmed as the airline has stepped up its A330, 767 and 747 fleets to allow it to continue offering its full schedule. Nevertheless, with the lower capacity on offer on routes such as London and Los Angeles, there is no doubt that Qantas is feeling the pain of having to rebook passengers on other carrier’s services.

Then there are the other costs, such as putting up those disrupted passengers in London and Los Angeles, and also chartering of British Airways 777s to operate some London-Singapore services. It appears that those will be the biggest items to affect the airline’s profits during this year, likely in the region of many millions of dollars.

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Further than that, Airbus and Rolls-Royce will also have to bear the costs of tarnished reputations. Rolls-Royce in particular has done little to enamour itself with the travelling public, still remaining tight-lipped about the issues with the Trent 900 and any fixes, with the company evidently continuing to take its lead from Marcel Marceau and say nothing.

That could end up having an impact on other A380 operators around the globe. One of the more interesting comments over the past few weeks has come from Emirates president Tim Clark who called on Rolls-Royce to be more forthcoming with information about the Trent 900 situation. While its own A380s are powered by the rival Engine Alliance GP7200, it appears that Emirates is concerned that the issue could hurt other A380 operators.

Of course, the compromise of safety is the biggest cost of all, and in this case the costs of the grounding were only minimal compared to if the aircraft had continued to operate and a similar (or, God forbid, worse) an accident were to have happened. The grounding proved to be fortuitous, given that oil leaks in engines on three Qantas aircraft and others with Singapore Airlines and Lufhansa were discovered.

For that reason, it appears that QF32 hasn’t cost Qantas its strong reputation. While it may take some time for the travelling public to embrace the A380 again, the Flying Kangaroo has handled it well. Although we have yet to see what the dollars and cents costs of the grounding were, those costs will be minimal compared to the cost of inaction and the cost Qantas’s brand would have faced if it had not taken the action it did.

PROMOTED CONTENT

Do you think Qantas’s brand has suffered in the wake of QF32?

6 Comments

  • kutay

    says:

    Got more stronger reputation amongst the public, engine incident occurred and company selected not to fly its a380 fleet because of safety as it is the priority, always has been.. that is what is qantas all about…it is the second oldest airline after KLM and kept its safety record to the highest and world-class product, exceptional service to this date, continue to do so…people will keep flying the flying kangaroo..keep happy jumping …..!!

  • Ross

    says:

    Qantas’ reputation has already taken a hammering from other continuing incidents. The A380 incident is only one of many,and while Qantas have handled themselves well on this occasion the cumulative effect of these other incidents is leaving the Qantas brand tarnished.

  • Danny Brooks

    says:

    I cannot but believe that Rolls-Royce(RR) will, when they have available all the facts on the failure of One of Flight QF32, TRENT-900 engines, will openly reveal details on The Reason For and Effective ‘Fixes’ for that engine design. The Test-Bed Running History of that engine probably shows hundreds of hours, with some of it exceeding 100% Power Levels for extended periods of time.
    I am absolutely sure that RR Management would have had immediate access to ground imagery of the state of that failed TRENT-900. And, Airlines would have discussed with their available RR Engine Representatives the likely cause, but Not Definitive Answer(s) for failure. Passenger Safety was, and always will be paramount.
    So, immediate and prudent groundings and inspections led to the discovery of oil leaks on a reported total of three other 900 engines, on three other Airlines.
    There are a lot of 900 engines in use out there and ONLY ONE HAS FAILED. If there is ANY DOUBT as to an engines technical reliablility – it would be ‘Pulled'(Changed)
    I find this very comforting for I have been travelling for the last ten years to Australia, mainly with Emirates on 777’s and lately A380’s. On the 14th December I fly to Sydney with Singapore Airlines and hope it is on the Booked A380. They are my favorite aaircraft.
    I am ex-RAF 34 years, a Pilot for 20years, and still fly aircraft.

  • Danny Brooks

    says:

    The cost to Rolls-Royce(RR) reputation would be far more damaging if they published Before They Knew All the Facts. There are many TRENT-900 engines fitted and only ONE has failed. Grounding, although damaging has always been the prudent response to uncertainty over causes of engine failure.
    Just consider the effect on RR Shares if this failure is not just through an oil leak, but a Basic Design Flaw requiring a ‘Back-to-the-Drawing-Board to resolve it, as opposed to redesigning/modifying an oil seal?

  • John Casebeer

    says:

    Given the problem they handled it very well. The crew’s performance was excellent and Qantas was very open about what happened. I don’t think it hurt them much. Rolls Royce on the other hand is blemished and has a lot of explaining to do.

  • SDorsett

    says:

    As someone who has had to passenger on A380s during this period, I found the information from the airlines and no statement (that I know of) from any international airline safety body, very confusing. Why did QF ground their fleet and SQ did not? I felt that the flying public were not informed properly. I am still confised as to what risk if any there is in flying the A380 with the “faulty” engines. But more annoying is that no-one seems to be concerned about addressing customers’ concerns over the issue.

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Counting the cost of the A380 grounding

written by australianaviation.com.au | November 26, 2010
Back in the air.

With the first of Qantas’s A380s to take off on Saturday on a revenue flight for the first time since their grounding after the QF32 incident, it’s worth considering the cost that the airline has had to bear with having its flagships out of service.

For the three weeks the entire fleet was grounded, possibly millions of dollars in lost revenue has been forgone, although the bleeding has been stemmed as the airline has stepped up its A330, 767 and 747 fleets to allow it to continue offering its full schedule. Nevertheless, with the lower capacity on offer on routes such as London and Los Angeles, there is no doubt that Qantas is feeling the pain of having to rebook passengers on other carrier’s services.

Then there are the other costs, such as putting up those disrupted passengers in London and Los Angeles, and also chartering of British Airways 777s to operate some London-Singapore services. It appears that those will be the biggest items to affect the airline’s profits during this year, likely in the region of many millions of dollars.

Advertisement
Advertisement

Further than that, Airbus and Rolls-Royce will also have to bear the costs of tarnished reputations. Rolls-Royce in particular has done little to enamour itself with the travelling public, still remaining tight-lipped about the issues with the Trent 900 and any fixes, with the company evidently continuing to take its lead from Marcel Marceau and say nothing.

That could end up having an impact on other A380 operators around the globe. One of the more interesting comments over the past few weeks has come from Emirates president Tim Clark who called on Rolls-Royce to be more forthcoming with information about the Trent 900 situation. While its own A380s are powered by the rival Engine Alliance GP7200, it appears that Emirates is concerned that the issue could hurt other A380 operators.

Of course, the compromise of safety is the biggest cost of all, and in this case the costs of the grounding were only minimal compared to if the aircraft had continued to operate and a similar (or, God forbid, worse) an accident were to have happened. The grounding proved to be fortuitous, given that oil leaks in engines on three Qantas aircraft and others with Singapore Airlines and Lufhansa were discovered.

For that reason, it appears that QF32 hasn’t cost Qantas its strong reputation. While it may take some time for the travelling public to embrace the A380 again, the Flying Kangaroo has handled it well. Although we have yet to see what the dollars and cents costs of the grounding were, those costs will be minimal compared to the cost of inaction and the cost Qantas’s brand would have faced if it had not taken the action it did.

PROMOTED CONTENT

Do you think Qantas’s brand has suffered in the wake of QF32?

6 Comments

  • kutay

    says:

    Got more stronger reputation amongst the public, engine incident occurred and company selected not to fly its a380 fleet because of safety as it is the priority, always has been.. that is what is qantas all about…it is the second oldest airline after KLM and kept its safety record to the highest and world-class product, exceptional service to this date, continue to do so…people will keep flying the flying kangaroo..keep happy jumping …..!!

  • Ross

    says:

    Qantas’ reputation has already taken a hammering from other continuing incidents. The A380 incident is only one of many,and while Qantas have handled themselves well on this occasion the cumulative effect of these other incidents is leaving the Qantas brand tarnished.

  • Danny Brooks

    says:

    I cannot but believe that Rolls-Royce(RR) will, when they have available all the facts on the failure of One of Flight QF32, TRENT-900 engines, will openly reveal details on The Reason For and Effective ‘Fixes’ for that engine design. The Test-Bed Running History of that engine probably shows hundreds of hours, with some of it exceeding 100% Power Levels for extended periods of time.
    I am absolutely sure that RR Management would have had immediate access to ground imagery of the state of that failed TRENT-900. And, Airlines would have discussed with their available RR Engine Representatives the likely cause, but Not Definitive Answer(s) for failure. Passenger Safety was, and always will be paramount.
    So, immediate and prudent groundings and inspections led to the discovery of oil leaks on a reported total of three other 900 engines, on three other Airlines.
    There are a lot of 900 engines in use out there and ONLY ONE HAS FAILED. If there is ANY DOUBT as to an engines technical reliablility – it would be ‘Pulled'(Changed)
    I find this very comforting for I have been travelling for the last ten years to Australia, mainly with Emirates on 777’s and lately A380’s. On the 14th December I fly to Sydney with Singapore Airlines and hope it is on the Booked A380. They are my favorite aaircraft.
    I am ex-RAF 34 years, a Pilot for 20years, and still fly aircraft.

  • Danny Brooks

    says:

    The cost to Rolls-Royce(RR) reputation would be far more damaging if they published Before They Knew All the Facts. There are many TRENT-900 engines fitted and only ONE has failed. Grounding, although damaging has always been the prudent response to uncertainty over causes of engine failure.
    Just consider the effect on RR Shares if this failure is not just through an oil leak, but a Basic Design Flaw requiring a ‘Back-to-the-Drawing-Board to resolve it, as opposed to redesigning/modifying an oil seal?

  • John Casebeer

    says:

    Given the problem they handled it very well. The crew’s performance was excellent and Qantas was very open about what happened. I don’t think it hurt them much. Rolls Royce on the other hand is blemished and has a lot of explaining to do.

  • SDorsett

    says:

    As someone who has had to passenger on A380s during this period, I found the information from the airlines and no statement (that I know of) from any international airline safety body, very confusing. Why did QF ground their fleet and SQ did not? I felt that the flying public were not informed properly. I am still confised as to what risk if any there is in flying the A380 with the “faulty” engines. But more annoying is that no-one seems to be concerned about addressing customers’ concerns over the issue.

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Your email address will not be published. Required fields are marked *

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