A380

But the A380 still has not sold in the numbers anticipated by Airbus. The company’s market forecasts for the very large airliner segment have repeatedly foreseen a market for up to 1,300 aircraft in a class that it sees as the only real solution to increasing passenger capacity at major hub airports that are already at or approaching peak movement capacity.

When launched, Airbus management said it needed to see “around 250” A380s in order to realise a profit on the program. The aircraft introduced many new manufacturing and material technologies, and its sheer size dictated new manufacturing and assembly facilities, and innovative methods of transporting large components between these facilities would be required.

But after the laboured development, delivery delays and reported refunds or hefty discounts offered to placate disgruntled early customers, costs reportedly rose from €12 billion to as much as €18 billion. While Richard Carcaillet, Airbus’s director of productmMarketing for the A380 wouldn’t be drawn on what a new break-even point might be, he did emphasise the company hoped to be seeing a return on aircraft delivered from 2015.

“That’s not something that is policy (to talk about) now,” said Carcaillet. “Those (break even) figures date back to 2005 and it’s pointless to discuss break-even points on aircraft programs as they are long-term investments. They are profitable investments in most cases. It doesn’t mean much. But we aim to have recurring cost-level profitability on each A380 delivered from 2015. It doesn’t mean we will have amortised the initial investment of the program, but it’s the first step to profitability.”

Carcaillet is an aeronautical engineer by trade, having attended the prestigious University of Texas at Austin in the mid-1980s. After working on the A300 and A310 programs, in 1996 he became a key element of a small 30-strong team tasked to develop a new very large airliner. Known as the A3XX at that time, it evolved into the A380 and Carcaillet has remained an intricate part of the program ever since.

Some vital statistics

To date 262 A380s have been ordered by 20 customers and, as Carcaillet told Australian Aviation, 12 of the world’s top 20 airlines by passenger numbers have ordered the jet, and this number does not include a surprise MoU with lessor Doric Leasing for 20 A380s announced at the Paris Airshow.

Carcaillet says there have also been re-orders by eight customers. “We’ve had a good run of re-orders and that is a sign of airlines being satisfied and making good profits with their initial batch, so they come back for more,” he said. “For this still very young A380 program, it’s a good solid base from which we start to look ahead and continue spreading its market presence.”

The biggest sales year for the A380 was its launch year in 2001 when 85 aircraft were ordered, and the biggest years since have been 2003 with 34 orders, 33 orders in 2007, 32 in 2010, and 29 orders in 2011. Of the two competing engines on offer for the A380, 134 orders have been for the Engine Alliance GP7000 accounting for 51 per cent of the market, while 109 or 42 per cent have been for the Rolls-Royce Trent 900. Customers holding a further 19 orders have not yet announced their engine selection.

“These are good engines that have helped the aircraft meet all of its performance commitments from day one,” said Carcaillet. “We haven’t had any performance recovery program which we’ve seen on other aircraft. These two engines have kept incrementally improving so we will have an even better aircraft.”

As of the end of July, 106 A380s had been delivered to 10 customers, including 35 to Emirates, 19 to Singapore Airlines, 12 to Qantas, 10 to Lufthansa, eight to Air France, six to Korean Air, six to Malaysia Airlines, five to China Southern, four to Thai and in late July, the first aircraft to British Airways. Combined, these aircraft have logged about 1.05 million flight hours in almost 125,000 revenue flights, and have carried nearly 45 million passengers. Carcaillet says the average daily utilisation of the fleet is slightly more than 13 hours per aircraft, while Qantas has recorded a daily average of nearly 15 hours.

Carcaillet says he uses airline marketing industry data to pull together a clear picture of how the A380 is being used.

“This allows us to investigate the behaviour of traffic on certain routes in great detail,” he said. “It is not something that is easily done and it is not something that is cheap either. You can see through codeshares, who’s flying which passengers and that has allowed us to prove, again, what the airlines are reporting, namely that the A380 is really doing something to the industry in terms of load factors, marketshare and (customer) shifts towards A380 operators.”

On the routes the A380 operates on, Carcaillet says the A380 operates 54 per cent of all flights. This compares to 29 per cent which are operated by 777s, 13 per cent by A330/340s and now just four per cent by the 747. A380s currently operate into nine of the world’s 10 busiest international airports and 15 of the top 20, and it also serves 13 of the top 20 airports by passenger numbers. The two busiest routes currently operated by the A380 are Dubai to London Heathrow with seven flights a day and Singapore to Heathrow with three to four a day.

Carcaillet says London Heathrow currently handles 87 A380s a week, while Tokyo Narita sees 50 A380s a week. Sydney sees the third highest number of A380s a week with 46, followed by Los Angeles with 45 and Hong Kong with 43. Melbourne has 28 A380 services a week, while Brisbane is expected to soon start seeing its first A380s from Emirates. Figures for other big A380 venues such as Dubai – which surely must have the highest number – Paris or Frankfurt weren’t provided.

The A380 “really is the new icon of aviation now,” said Carcaillet. “It’s not the long-trusted and legendary 747 anymore.”

“(The A380) really is the new icon of aviation now. It’s not the long-trusted and legendary 747 any more.
Carcaillet

Higher capacity?

So far, most airlines have ordered the aircraft in three or four-class layouts and the seating configurations to date appear to highlight the aircraft’s spaciousness as a marketing tool rather than seeking to maximise the vast space offered by the twin-deck layout. Thus to date the A380 has mainly been pitched by airlines as a high-end premium product, with airlines claiming passengers actively seek out the aircraft when planning their travel itineraries and that the aircraft generates higher yields per seat than other airliners on similar routes.

Richard Carcaillet said that, when deployed on peak overnight long-haul flights, the A380 was commanding an average eight per cent yield premium over other widebody jets. Further, he related one case study where a single daily A380 had replaced two 777 services on a particular route, and while reducing fuel burn and airport and en-route charges, the average yield also rose by some 20 per cent on that sector.

The highest density seating configuration currently on an A380 is that flown by Lufthansa, with eight first class, 98 business class, and 420 economy class seats for a total of 526 seats, while the lowest density is operated by Korean Air with 12 first, 94 business and 301 economy seats, for a total of 407 seats. According to a recent report by Air Insight, the average configuration between all 12 current operators is 11 first, 77 business, 43 premium economy, and 382 economy class seats for a total average seat count of 482.

But observers of the A380’s development will remember the aircraft has been certified to carry nearly double this amount of passengers. This follows the March 2006 test which saw 853 passengers and 20 crew members evacuated from a test aircraft from just eight of its 16 exits in complete darkness in less than 90 seconds. Indeed, a 2009 order by French leisure operator Air Austral for two 840-seat all-economy-configured A380s for services from Paris to the Indian Ocean island of La Reunion was the first realisation of that potential.

But that potential now looks to have diminished somewhat, with airline CEO Marie-Joseph Malé telling industry media in July that such a configuration would “endanger the existence of the airline.” Malé told the Airline Passenger Experience editor’s blog: “The coexistence of densified (sic) [A380s] with the current existing network would cannibalise the current network,” by depriving the airline of high-yield premium cabin revenues. He said that, “If you feel the group is going to be impacted because you cannibalise the quality of the traffic, you have to question it,” adding: “it didn’t make sense and was evidently loss-making.”

Air Austral’s Malé stressed the airline wasn’t cancelling its order for the two aircraft, but would instead look to adopt a mixed-class configuration, saying “all options” are on the table and that the airline was “still in discussions” with Airbus.

Similarly, Emirates once had plans for a two-class 604-seat A380 with an 11-abreast economy class, but dropped the plan because it didn’t want to dilute the popularity of its current 10-abreast product, despite airline president Tim Clark claiming it would offer “stupendous” seat-mile costs.

But Emirates’ and Air Austral’s hesitation doesn’t mean Airbus has stopped promoting the A380’s potential capacity as part of its marketing efforts. Indeed, while not nearly in the 850-seat realm, one option the manufacturer has been offering recently is a modest increase to a 558 seat count comprising 10 first class, 84 business class and 464 economy seats in a 10-abreast configuration (or 588 seats with 11 abreast) to some operators.

“What we will see in some cases is more dense layouts,” said Carcaillet. “The aircraft is certainly capable of more seats if you vary the proportion of classes, but right now it is very much, in terms of its flagship character, an aircraft with very comfortable long haul configurations. But if you want to operate the aircraft on more domestic or trunk routes which I believe will come in the future, like China, Japan and India, then you may be talking about an aircraft with up to 700 or 800 seats, something better adapted to these routes.”

Airbus was also reportedly exploring ways to make the interior layout more flexible so it can be reconfigured to cater for seasonal traffic or changed for lessee airlines’ fleet commonality. Flexibility has long been one of the A380’s perceived weak points. This is because the complexity of the two-deck layout and the vast amount of wiring and plumbing required for inflight entertainment, seat power, galleys, lavatories, air conditioning and other amenities made seating reconfigurations time-consuming and costly to perform.
So if Airbus can overcome this complexity, the A380 will likely gain far greater appeal with lessors in particular, but also with leisure or low-cost operators that have seasonal peak demands.

The competition

Ever since Boeing launched the revamped 747-8 Intercontinental, both companies have claimed and counter-claimed that their respective very large airliner product was more efficient than the competition. Most recently, Airbus had a complaint it had filed with the UK’s Advertising Standards Authority (ASA) dismissed about Boeing claims that the 747-8I is 26 per cent cheaper and eight per cent more efficient than the A380.

But the dismissal of Airbus’s complaint wasn’t so much seen as an affirmation of Boeing’s claims, rather the ASA found that the target audience would be too sophisticated to be misled and would likely have an understanding of the underlying assumptions.

Before the complaint ruling, Airbus had countered with ads portraying a Boeing jet with an elongated Pinocchio-like nose, claiming Boeing, “has begun to exaggerate the capabilities of its ‘latest technology’ 737 and 747 aircraft, both of which are derivatives of 1960s designs.” Of course, Boeing has lodged a counter-claim against those ads, for which a ruling is yet to be made.

But in making its claims, Boeing had reportedly used a seat count of 467 for the 747-8I, whereas Airbus claims in actual airline configuration, a more realistic seat-count the 747-8I would be 405, and it is that number it compares to its own A380 marketing baseline of 525 seats. Interestingly, Lufthansa as the only airline to currently operate both types, has configured its 747-8Is with between 362 and 386 seats, versus 526 seats on its A380s, although these aircraft do not fly against each other on routes and so should not necessarily be compared like-for-like.

“(Boeing) has begun to exagerate the capabilities of its ‘latest technology’ 737 and 747.”
Airbus

Using its own numbers, Airbus claims a 13 per cent fuel burn per seat advantage over the current 747-8I on a typical 6,000nm sector, although Boeing has a range of drag reduction and performance recovery and improvement efforts underway for its 747-8I through its reported ‘Project Ozark’ initiative. According to a June report in Aviation Week, upgrades will include a re-profiling of the ailerons and rudder for more efficient cruise, a 5,500kg payload increase, an enhanced display system and flight management computer, and the re-activation of the tail fuel tank which has been closed out due to flutter and vibration issues. A performance improvement package for the 747-8I’s GE GEnx-2B engines which will yield a 1.8 per cent improvement in fuel burn is expected to bring the aircraft up to its originally designed 8,000nm range, while aerodynamic enhancements to the side-of-body fairings and ongoing weight-saving studies are hoped to bring the range up further to 8,200nm.

Either way, there really is no comparison between the relative capacities of the two aircraft types. The A380 main deck is half a metre wider than the 747, while the upper deck is 1.75m wider and runs the full length of the fuselage, giving the A380 about 30 per cent more deck space. Judging on what interior configurations airlines are fitting to their A380s and 747s, the real-world seat-count of the new 747 more realistically falls between the 777-300ER and A380.

Latest order

The announcement of an MoU for 20 A380s from Doric Leasing at the Paris Airshow took many by surprise, not least for the previously-stated reasons that due to its cost, complexity and inflexible layouts, the A380 has not been popular with lessors. Indeed, it has been reported Doric may have been granted exclusive leasing rights to the A380.

“Doric is an aviation asset management company founded by aviation investment bankers who have a lot of experience in and have focussed their activities on the A380 for some time,” explained Carcaillet. “They have financed aircraft with Singapore Airlines and with Emirates, and are discussing A380 financing options with other airlines right now.

“They’ve now decided, basically, to get their own portfolio of A380s for lease placement,” he added. “They’re certainly not looking at short-term leases which some lessors will do with smaller aircraft, but longer term 10 to 20 year lease solutions. I think that this is a great way to widen the market penetration, especially for airlines that are capital expenditure constrained as many are in this current world economy.” Carcaillet added he expected the MoU to be transferred into the Airbus order book as a firm order in the near future.

Future developments
Airbus isn’t resting on its laurels with the A380 and plans are in place to introduce a range of enhancements to the design in order to increase efficiency.

Weight savings are planned in the form of aluminium-lithium (Al-Li) lower wing panels to replace some of the current aluminium panels, along with other unspecified weight enhancements throughout the airframe. There is also a plan to improve the aerodynamics of the A380. This will be achieved in part by introducing a slight forward twist to the outer wing to improve drag over that area, as well as an enhanced gust-load alleviation system. Engine manufacturers Rolls-Royce and Engine Alliance are also introducing enhancements to their engines in an effort to reduce fuel burn and increase efficiency.

But perhaps most importantly for airlines, Airbus will soon introduce a 575 tonne MTOW enhancement, up from the current 560 tonne standard which should yield an eight tonne payload increase or an additional 500nm of range. This will allow missions of 8,500nm with 525 passengers and luggage to be performed.

Airbus is yet to commit to a timeframe to launch a stretched version of the A380. Provisionally dubbed the A380-900 since launch, there remains little market interest in a stretch at this time, especially as airlines are not currently filling the potential capacity of the current model. When pressed, Carcaillet did say that a nascent -900 would need to have about a 20 per cent greater capacity to be viable. “The baseline we’ve been studying when discussing with airlines is probably around a 20 per cent step, so from 500 to 600 seats,” he said. “This is what the market would say is a reasonable step…it will be a market-driven decision.”

But even with these improvements, many analysts predict Airbus will be hard-pressed to even achieve half of its arguably inflated predicted market requirement for 1,300 very large airliners in the next 20 years.

US-based Scott Hamilton writing in Leeham News & Comment on July 22 said: “Airbus’s only hope of selling 630-650 more A380s over 20 years…is to maintain its near-monopolistic market share of this sector.” While he said he saw the A380’s lopsided share continuing, he also warned that new 400-seat large twins from Boeing (777-9X) and Airbus (A350-1000) would continue to “nibble away” at the bottom end of the A380’s market. Perhaps this explains Airbus’s efforts in marketing higher capacity versions of its flagship.