Airbus A380 Its Best Is Yet To Come?

“The A380. A fantastic aeroplane,” he told a gathering of 160 aviation media at Airbus’s annual Innovation Day in Hamburg in late May. “A lot of you wouldn’t believe it but every three minutes an A380 takes off or lands somewhere in the world on a revenue passenger flight. I’ve got a big plasma screen in my office in real time watching every 380 fly round the world. It’s mesmerising. Sometimes you can sit there staring at it for an hour and get absolutely nothing done. It tells you all about this Singapore flight. This is its altitude, here’s where he’s going, here’s where he departed. It’s very, very fascinating. ” It’s a measure of just how dedicated to the A380 Leahy is. “We know the future has to be in the size category. We are doubling traffic every 15 years around the world. We’re doubling traffic every 10 years in the Asia Pacific. Are we doubling the number of airports? Well, maybe in China. I’ll give you that. They are but nowhere else in the world. Look at Heathrow. Look at Charles de Gaulle. Look at Frankfurt and JFK (New York’s John F Kennedy). We’re not doubling airport capacity. In fact, it’s virtually impossible to do much more than tweak the airport capacity around the edges. We have to have bigger aircraft going forward. ” The problem for Airbus right now, however, is that few airlines seem to be getting the message.

Since it was officially launched in December 2000 with 50 firm orders from six launch customers – including Qantas, Singapore Airlines and Emirates Airline – orders have gradually slowed to a mere dribble. After 16 years the total order book stands at only 319, with 187 having been delivered. And some customers for the 132 yet to be handed over have indicated they may not take part of their orders. French carrier Air Austral this year cancelled an order for two. Air France-KLM has dropped plans to take its last two ordered A380s. Virgin Atlantic Airways said it doesn’t plan to take the six it ordered. Indeed, it if wasn’t for Dubai’s Emirates, which has ordered a total of 142, the A380 program may have been shuttered some time ago. Not to suggest there haven’t been a few brighter moments. Japan’s All Nippon Airways last year ordered three A380s and in January Iran Air, with its country emerging from sanctions, signed an agreement for 12, though that deal has yet to be finalised.

Financially, the program has hardly been a golden goose. The first A380s delivered without losing money were handed over to customers last year, the result of serious efforts to reduce production costs. Airbus chief operating officer Tom Williams said the program had done a “dramatic job reducing the break-even point”. One example, he explained, is a building in Hamburg that was originally put up for the A380 but is now going to be used to house an assembly line for Airbus’s popular single-aisle A320 family.

“We have put a lot of effort into very pragmatic steps. . . I’m not going to give you the numbers but we have made, I think, very significant steps to allow us to bring the A380 break-even point down and give us the chance to have continuity for the program because my belief is that this is an aircraft that will still come back, given the right time, because of the growth we talked about earlier. ”

Every three minutes an A380 takes off or lands somewhere in the world. JOHN LEAHY

While Airbus won’t comment officially, sources say it has also told suppliers to slow production to support an assembly rate of 1. 7 aircraft per month from next year, compared with production of just over two a month now. In 2015 it delivered 27 A380s.

In this landscape chances of Airbus offering a new engine option, or neo, version of the aircraft have evaporated. Airbus had been under pressure from its biggest superjumbo customer, Emirates, to do just that. But it seems the main concern of Emirates president Tim Clark now – he promised to buy as many as 200 A380neos – is that Airbus might even stop building the aircraft. Speaking at a briefing during the International Air Transport Association’s (IATA) annual general meeting in Dublin in June his appeal to Airbus was “please don’t drop the program altogether… I can’t force Toulouse (Airbus headquarters) to do anything… my main concern is that they stop producing the plane. ” He added that talks with Airbus on an engine upgrade had “kind of lapsed”.

Clark can relax. That won’t happen. “There’s nothing imminent on the neo right now but this is a program that will be around for 40 or 50 years like the old Boeing 747 was,” said Leahy. “So of course you will be updating it, stretching it and re-engining it. But there is nothing planned for the present time. ” It was a message reinforced by the company’s executive vice president strategy and marketing Dr Kiran Rao.

“Are we looking at the neo? Our job is to look at all these things so whether John (Leahy) decides whether we go forward with it depends on the market. But of course we look at all these things and at some point yes, I’m sure there will be … the 380 is a plane that will last for another 20, 30 maybe 40 years or more and you can’t keep the aircraft with the same engine for that period of time. So eventually yes, I am sure a neo will appear on the market. The 380 is an aeroplane that creates its own demand as we increase the volume of passengers flying and whether it’s four per cent or eight per cent those increases in passengers are going to come. As John mentioned the airport sizes are limited and you have to have 380s. So the 380 has a very long future ahead of it. ” While it may not be getting new engines yet, Airbus is looking at other ways to improve the A380’s economics and make it more attractive to customers. It has developed an 11-abreast configuration in economy class on the main deck to allow for even more passengers, lowering per-seat costs. Rao said another option has been developed to remove sidewall storage bins on the top deck in business class, freeing space for 10 or more business-class seats.

Work is also being done on ways to reduce maintenance costs.

Airbus is also considering redesigning the aircraft’s grand stairway between the aircraft’s two decks, which would also increase the passenger capacity. Currently, the A380 has a capacity for up 544 passengers in a four-class configuration (853 seats in single class configuration) and the changes would potentially take this to more than 600.

Eventually yes, I am sure a neo will appear on the market. DR KIRAN RAO

In the meantime, Leahy continues to argue vehemently that big is the only answer for the world’s airlines. He says there will be 75 mega cities across the globe in 10 years, not 20 years.

“Everyone says we’ll be flying point-to-point. I agree. Connecting those [mega cities] is point-to-point flying and it has to be done with A380s. Nobody wants to go to the airport to have your 3. 10am departure or arrive at some airport at 4. 10 in the morning. Even the leisure passengers don’t want to do that. So flying bunches up around day flights and night flights and it will continue doing that in the future. ” Leahy says 60 per cent of passengers are ready to make a special effort to fly on the A380 and 20 per cent of them are prepared to pay more to do so.

“And when an A380 takes off from London Heathrow behind a 747-400 it probably has about 100 to 150 more people on board, it has half the noise footprint on the community as that 747 in front of it. That’s why they are so impressed. Airports around the world are banking on the A380 to allow them to fly more people through their hubs and do it more economically with less environmental impact and less noise. Only the A380 can do that going forward. ” He also believes that a secondhand market for A380s will really start opening up the aircraft to carriers that otherwise can’t afford an aircraft in its price category.

“If you start looking at an aeroplane, ex-Singapore Airlines or ex- Emirates, you can get a lease rental on that very similar to a 777-300ER new. Now, that really opens up some interesting alternatives to an airline. Rather than a 777-300ER, for that same monthly rent I could be playing around with an A380 so let’s be creative. Let’s give it a shot. I think you’ll see a lot of that. ” Meanwhile, on the order front, Airbus says it does expect to finalise new agreements for A380s this year. The deals could come from a mix of new customers and existing ones, said Chris Buckley, executive vice president, Europe, Asia and Pacific, on the sidelines of the IATA meeting in Dublin. He wouldn’t identify potential buyers.

But it appears at least some new airlines are thinking big.