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The market “needs” the A380 says Airbus’s Leahy

written by Gerard Frawley | May 29, 2015
An Emirates A380, soon to be seen at Perth Airport. (Emirates)
Emirates is the world’s largest customer of the A380. (Emirates)

The A380 was one of the top topics of discussion at this year’s “Airbus Innovation Days”, Airbus’s annual media briefing for the aviation media, and not least because the location of this year’s event was the European planemaker’s A380 final assembly line facilities at Toulouse.

Ten years after its first flight, the future of the world’s largest airliner – which has not received any new orders so far this year and has seen existing orders either cancelled or deferred – is hotly debated. Today, total A380 firm orders stand at 317, and more than half of these have now been delivered.

In addition to no new orders so far in 2015, doubts remain over the robustness of at least some of the existing order backlog, such as the six on order for Virgin Atlantic. Other airlines such as Qantas and Air France have deferred A380 deliveries. And two A380s have been built for Japan’s now-bankrupt Skymark Airlines, which Airbus now has to remarket.

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A perception has taken hold that the A380 is a good aircraft, but too big for all bar a small number of high-density city pairs.

“Is it a big market? It’s not a gigantic market,” Airbus chief operating officer for customers John Leahy said of demand for the A380 at the Innovation Days briefing on Thursday. “But if aviation doubles every 15 years the market will need it. It needs it today.”

“We should have some more orders for the A380 this year,” Leahy promised.

“The fact is there is demand for the A380 out there, we’ve got several campaigns under way.”

PROMOTED CONTENT

One campaign definitely underway is Emirates’ push to convince Airbus to develop a re-engined A380neo. Emirates, the world’s biggest A380 customer, has 60 A380s in its fleet, with 140 in total on order, and its president Tim Clark is the aircraft’s greatest advocate, both for the existing model and the proposed A380neo.

But developing the A380neo would cost an estimated €2 billion, while Leahy described as a “hard sell” given that it is only now the A380 program is breaking even.

“I’ve said publicly already that it is a very hard sell to our board to do anything for one customer, even a big customer. But the fact is Tim [Clark] has made it very clear that he sees demand for 200 just from Emirates for that aeroplane,” Leahy said.

But, said Leahy: “we’re still studying the business case”.

Leahy was also bullish about the A380’s prospects on the second-hand market. The A380 first entered service in 2007, and given key operators such as Emirates and Singapore Airlines generally only operate aircraft up to 10 years of age, the first examples could soon be on the second hand market. And if media reports are correct, Malaysia Airlines may soon put up its fleet of six A380s on the market as part of the airline’s massive corporate restructure.

Leahy said of used A380 aircraft: “I see as a big opportunity.”

He said that an A380 at its half life, with a book value of US$100 million, could be leased for around US$1 million a month.

“What’s a 777-300ER going for at the moment? It’s going for more than $1m a month,” Leahy said.

“So I think we open up a really unique opportunity here that some operators who have never even considered an A380 before are starting to look at the fact that for about the rental per month of the 777-300ER you could have an A380, maybe there are some routes I should try. I see this as a great market opportunity, I can’t wait to get there.”

Airbus head of strategy Kiran Rao told media interest in second-hand A380s could come from long-haul, low-cost carriers in Asia configuring the aircraft to seat between 600 and 650 passengers in a two-class configuration optimised for six- to eight-hour missions.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

10 Comments

  • Mark

    says:

    Great aircraft and so much more space. I actively seek them when travelling long haul.

  • Qing Gü

    says:

    The a380 is one of the most innovative and complex aircraft out there, it’s just a sham not many airlines have orders it

  • GAGA

    says:

    Of course a Airbus chief is going to say the market needs it. Company executives are always going to err on the optimism side when pitching their product.

    With the A380 costing more to run per seat than the B787 or A350, why should there be no surprise that the market has moved towards the latter pair?

    Interesting how Emirates has so many. I do wonder what will happen to the used market when they start to flood it with 10-12 year old examples though I imagine there are a few freight operators with 747s that will eye the used A380s.

  • Jim A.

    says:

    It’s very surprising that there’s not more demand. Everyone I know plans their flights around 380’s these days as I do. They are so comfortable quiet and stable, possibly even over engineered. There’s no substitute for engines and I’m never happy on a twin engine long haul flight these days.

  • Chris Grealy

    says:

    Well, he would say that wouldn’t he? But do we need 11 across seating in economy? Why does Airbus want to torture their passengers?

  • Dane

    says:

    Tim Clark is right; manufacturers have to revitalise their offerings from time to time to attract new orders. Even if the only change is new engines that give a 5-10% fuel burn reduction, new customers might be drawn to the A380 if its economics are improved upon.

    Another option could be a high density version similar to the 747-400D, where a lot of the long haul comforts like bars and showers are removed to make way for more seating for use on short, high capacity sectors.

    Or why not continue development of the A380-800F? Surely there would be some air cargo companies interested in an a double deck freighter? As long as its operating economics were better than the 747-8F and was compatible with the majority of cargo handling systems already in place.

    The reason we have multiple models of most aircraft (i.e. 747-100 through to – 8i) is because manufacturers have had to continually develop their product for it to remain relevant or competitive in the market.

    If Airbus can find a way to improve the A380 product and experience for the customer, one would think that they would find new customers or existing ones looking to upgrade.

  • Marc

    says:

    Personally I avoid flying the 380. Loading and unloading takes eternity. Too many people and long baggage queues. With jets, the smaller the better.

  • Tropicalcat

    says:

    I have to say I’m like Marc and am not a fan of the sheer numbers that are involved in a 380 trip. Personally I find the 787 experience just as good with a lot fewer people.

  • Toni

    says:

    Frequent business flyers that I know plan their routes away from the A380 to avoid the crowded lounge,longer priority queues and long baggage wait. Even the premium cabins feel less exclusive compared to a twin prop with lesser seats. Less is more in this case and Airbus should end their delusion that the A380 program will work out

  • Roden

    says:

    An international airline is not a real airline without the A380. What a superb machine. Will not fly international on anything else.

Leave a Comment

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

The market “needs” the A380 says Airbus’s Leahy

written by Gerard Frawley | May 29, 2015
An Emirates A380, soon to be seen at Perth Airport. (Emirates)
Emirates is the world’s largest customer of the A380. (Emirates)

The A380 was one of the top topics of discussion at this year’s “Airbus Innovation Days”, Airbus’s annual media briefing for the aviation media, and not least because the location of this year’s event was the European planemaker’s A380 final assembly line facilities at Toulouse.

Ten years after its first flight, the future of the world’s largest airliner – which has not received any new orders so far this year and has seen existing orders either cancelled or deferred – is hotly debated. Today, total A380 firm orders stand at 317, and more than half of these have now been delivered.

In addition to no new orders so far in 2015, doubts remain over the robustness of at least some of the existing order backlog, such as the six on order for Virgin Atlantic. Other airlines such as Qantas and Air France have deferred A380 deliveries. And two A380s have been built for Japan’s now-bankrupt Skymark Airlines, which Airbus now has to remarket.

Advertisement
Advertisement

A perception has taken hold that the A380 is a good aircraft, but too big for all bar a small number of high-density city pairs.

“Is it a big market? It’s not a gigantic market,” Airbus chief operating officer for customers John Leahy said of demand for the A380 at the Innovation Days briefing on Thursday. “But if aviation doubles every 15 years the market will need it. It needs it today.”

“We should have some more orders for the A380 this year,” Leahy promised.

“The fact is there is demand for the A380 out there, we’ve got several campaigns under way.”

PROMOTED CONTENT

One campaign definitely underway is Emirates’ push to convince Airbus to develop a re-engined A380neo. Emirates, the world’s biggest A380 customer, has 60 A380s in its fleet, with 140 in total on order, and its president Tim Clark is the aircraft’s greatest advocate, both for the existing model and the proposed A380neo.

But developing the A380neo would cost an estimated €2 billion, while Leahy described as a “hard sell” given that it is only now the A380 program is breaking even.

“I’ve said publicly already that it is a very hard sell to our board to do anything for one customer, even a big customer. But the fact is Tim [Clark] has made it very clear that he sees demand for 200 just from Emirates for that aeroplane,” Leahy said.

But, said Leahy: “we’re still studying the business case”.

Leahy was also bullish about the A380’s prospects on the second-hand market. The A380 first entered service in 2007, and given key operators such as Emirates and Singapore Airlines generally only operate aircraft up to 10 years of age, the first examples could soon be on the second hand market. And if media reports are correct, Malaysia Airlines may soon put up its fleet of six A380s on the market as part of the airline’s massive corporate restructure.

Leahy said of used A380 aircraft: “I see as a big opportunity.”

He said that an A380 at its half life, with a book value of US$100 million, could be leased for around US$1 million a month.

“What’s a 777-300ER going for at the moment? It’s going for more than $1m a month,” Leahy said.

“So I think we open up a really unique opportunity here that some operators who have never even considered an A380 before are starting to look at the fact that for about the rental per month of the 777-300ER you could have an A380, maybe there are some routes I should try. I see this as a great market opportunity, I can’t wait to get there.”

Airbus head of strategy Kiran Rao told media interest in second-hand A380s could come from long-haul, low-cost carriers in Asia configuring the aircraft to seat between 600 and 650 passengers in a two-class configuration optimised for six- to eight-hour missions.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

10 Comments

  • Mark

    says:

    Great aircraft and so much more space. I actively seek them when travelling long haul.

  • Qing Gü

    says:

    The a380 is one of the most innovative and complex aircraft out there, it’s just a sham not many airlines have orders it

  • GAGA

    says:

    Of course a Airbus chief is going to say the market needs it. Company executives are always going to err on the optimism side when pitching their product.

    With the A380 costing more to run per seat than the B787 or A350, why should there be no surprise that the market has moved towards the latter pair?

    Interesting how Emirates has so many. I do wonder what will happen to the used market when they start to flood it with 10-12 year old examples though I imagine there are a few freight operators with 747s that will eye the used A380s.

  • Jim A.

    says:

    It’s very surprising that there’s not more demand. Everyone I know plans their flights around 380’s these days as I do. They are so comfortable quiet and stable, possibly even over engineered. There’s no substitute for engines and I’m never happy on a twin engine long haul flight these days.

  • Chris Grealy

    says:

    Well, he would say that wouldn’t he? But do we need 11 across seating in economy? Why does Airbus want to torture their passengers?

  • Dane

    says:

    Tim Clark is right; manufacturers have to revitalise their offerings from time to time to attract new orders. Even if the only change is new engines that give a 5-10% fuel burn reduction, new customers might be drawn to the A380 if its economics are improved upon.

    Another option could be a high density version similar to the 747-400D, where a lot of the long haul comforts like bars and showers are removed to make way for more seating for use on short, high capacity sectors.

    Or why not continue development of the A380-800F? Surely there would be some air cargo companies interested in an a double deck freighter? As long as its operating economics were better than the 747-8F and was compatible with the majority of cargo handling systems already in place.

    The reason we have multiple models of most aircraft (i.e. 747-100 through to – 8i) is because manufacturers have had to continually develop their product for it to remain relevant or competitive in the market.

    If Airbus can find a way to improve the A380 product and experience for the customer, one would think that they would find new customers or existing ones looking to upgrade.

  • Marc

    says:

    Personally I avoid flying the 380. Loading and unloading takes eternity. Too many people and long baggage queues. With jets, the smaller the better.

  • Tropicalcat

    says:

    I have to say I’m like Marc and am not a fan of the sheer numbers that are involved in a 380 trip. Personally I find the 787 experience just as good with a lot fewer people.

  • Toni

    says:

    Frequent business flyers that I know plan their routes away from the A380 to avoid the crowded lounge,longer priority queues and long baggage wait. Even the premium cabins feel less exclusive compared to a twin prop with lesser seats. Less is more in this case and Airbus should end their delusion that the A380 program will work out

  • Roden

    says:

    An international airline is not a real airline without the A380. What a superb machine. Will not fly international on anything else.

Leave a Comment

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

The market “needs” the A380 says Airbus’s Leahy

written by Gerard Frawley | May 29, 2015
An Emirates A380, soon to be seen at Perth Airport. (Emirates)
Emirates is the world’s largest customer of the A380. (Emirates)

The A380 was one of the top topics of discussion at this year’s “Airbus Innovation Days”, Airbus’s annual media briefing for the aviation media, and not least because the location of this year’s event was the European planemaker’s A380 final assembly line facilities at Toulouse.

Ten years after its first flight, the future of the world’s largest airliner – which has not received any new orders so far this year and has seen existing orders either cancelled or deferred – is hotly debated. Today, total A380 firm orders stand at 317, and more than half of these have now been delivered.

In addition to no new orders so far in 2015, doubts remain over the robustness of at least some of the existing order backlog, such as the six on order for Virgin Atlantic. Other airlines such as Qantas and Air France have deferred A380 deliveries. And two A380s have been built for Japan’s now-bankrupt Skymark Airlines, which Airbus now has to remarket.

Advertisement
Advertisement

A perception has taken hold that the A380 is a good aircraft, but too big for all bar a small number of high-density city pairs.

“Is it a big market? It’s not a gigantic market,” Airbus chief operating officer for customers John Leahy said of demand for the A380 at the Innovation Days briefing on Thursday. “But if aviation doubles every 15 years the market will need it. It needs it today.”

“We should have some more orders for the A380 this year,” Leahy promised.

“The fact is there is demand for the A380 out there, we’ve got several campaigns under way.”

PROMOTED CONTENT

One campaign definitely underway is Emirates’ push to convince Airbus to develop a re-engined A380neo. Emirates, the world’s biggest A380 customer, has 60 A380s in its fleet, with 140 in total on order, and its president Tim Clark is the aircraft’s greatest advocate, both for the existing model and the proposed A380neo.

But developing the A380neo would cost an estimated €2 billion, while Leahy described as a “hard sell” given that it is only now the A380 program is breaking even.

“I’ve said publicly already that it is a very hard sell to our board to do anything for one customer, even a big customer. But the fact is Tim [Clark] has made it very clear that he sees demand for 200 just from Emirates for that aeroplane,” Leahy said.

But, said Leahy: “we’re still studying the business case”.

Leahy was also bullish about the A380’s prospects on the second-hand market. The A380 first entered service in 2007, and given key operators such as Emirates and Singapore Airlines generally only operate aircraft up to 10 years of age, the first examples could soon be on the second hand market. And if media reports are correct, Malaysia Airlines may soon put up its fleet of six A380s on the market as part of the airline’s massive corporate restructure.

Leahy said of used A380 aircraft: “I see as a big opportunity.”

He said that an A380 at its half life, with a book value of US$100 million, could be leased for around US$1 million a month.

“What’s a 777-300ER going for at the moment? It’s going for more than $1m a month,” Leahy said.

“So I think we open up a really unique opportunity here that some operators who have never even considered an A380 before are starting to look at the fact that for about the rental per month of the 777-300ER you could have an A380, maybe there are some routes I should try. I see this as a great market opportunity, I can’t wait to get there.”

Airbus head of strategy Kiran Rao told media interest in second-hand A380s could come from long-haul, low-cost carriers in Asia configuring the aircraft to seat between 600 and 650 passengers in a two-class configuration optimised for six- to eight-hour missions.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

10 Comments

  • Mark

    says:

    Great aircraft and so much more space. I actively seek them when travelling long haul.

  • Qing Gü

    says:

    The a380 is one of the most innovative and complex aircraft out there, it’s just a sham not many airlines have orders it

  • GAGA

    says:

    Of course a Airbus chief is going to say the market needs it. Company executives are always going to err on the optimism side when pitching their product.

    With the A380 costing more to run per seat than the B787 or A350, why should there be no surprise that the market has moved towards the latter pair?

    Interesting how Emirates has so many. I do wonder what will happen to the used market when they start to flood it with 10-12 year old examples though I imagine there are a few freight operators with 747s that will eye the used A380s.

  • Jim A.

    says:

    It’s very surprising that there’s not more demand. Everyone I know plans their flights around 380’s these days as I do. They are so comfortable quiet and stable, possibly even over engineered. There’s no substitute for engines and I’m never happy on a twin engine long haul flight these days.

  • Chris Grealy

    says:

    Well, he would say that wouldn’t he? But do we need 11 across seating in economy? Why does Airbus want to torture their passengers?

  • Dane

    says:

    Tim Clark is right; manufacturers have to revitalise their offerings from time to time to attract new orders. Even if the only change is new engines that give a 5-10% fuel burn reduction, new customers might be drawn to the A380 if its economics are improved upon.

    Another option could be a high density version similar to the 747-400D, where a lot of the long haul comforts like bars and showers are removed to make way for more seating for use on short, high capacity sectors.

    Or why not continue development of the A380-800F? Surely there would be some air cargo companies interested in an a double deck freighter? As long as its operating economics were better than the 747-8F and was compatible with the majority of cargo handling systems already in place.

    The reason we have multiple models of most aircraft (i.e. 747-100 through to – 8i) is because manufacturers have had to continually develop their product for it to remain relevant or competitive in the market.

    If Airbus can find a way to improve the A380 product and experience for the customer, one would think that they would find new customers or existing ones looking to upgrade.

  • Marc

    says:

    Personally I avoid flying the 380. Loading and unloading takes eternity. Too many people and long baggage queues. With jets, the smaller the better.

  • Tropicalcat

    says:

    I have to say I’m like Marc and am not a fan of the sheer numbers that are involved in a 380 trip. Personally I find the 787 experience just as good with a lot fewer people.

  • Toni

    says:

    Frequent business flyers that I know plan their routes away from the A380 to avoid the crowded lounge,longer priority queues and long baggage wait. Even the premium cabins feel less exclusive compared to a twin prop with lesser seats. Less is more in this case and Airbus should end their delusion that the A380 program will work out

  • Roden

    says:

    An international airline is not a real airline without the A380. What a superb machine. Will not fly international on anything else.

Leave a Comment

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

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