The countdown is underway for the outstanding order of 10 Airbus A380s by mega-lessor International Lease Finance Corp.
ILFC was an early customer for the super-jumbo jet and suffered two year delays along with the other customers when Airbus’ industrial production issues arose for the giant aircraft. As part of the restructured contract for the order as a result of the delays, ILFC obtained the option to cancel the orders in 2010.
ILFC CEO Steven Udvar-Hazy told us at the ISTAT conference this week that come January 1, he can exercise that option.
We asked Hazy if he would. The rationale for our question is that at current list prices, th 10 orders represent a commitment of at least $3bn for an aircraft that suddenly is less in demand as global traffic takesa dive. Furthermore, given ILFC’s peculiar position of being captive to a parent on its death bed and looking for a White Knight, wouldn’t it be better for ILFC to be relieved of this obligation?
Hazy, cagey as ever, said ask him on January 1. While seemingly hinting that he already made up his mind, he added that the situation isn’t as “simple” as merely canceling the order. Rather, there could be other aspects to the transaction.
He did not elaborate, but from our perch of 30 years being involved in commercial aviation, the A380 orders could well be involved in a swap for orders for another Airbus type or some other transaction.
Hazy hopes ILFC will be sold this year. Disposing of the A380 order entirely, or in favor of more in-demand airplanes, would certainly be an attractive aspect for any prospective buyer.
How many of the ILFC A380 orders have actually been placed with airlines? Maybe it would make sense to trade for delivery slots on A320s or A350s?
Aurora: Did not get around to asking that question.
As I recall, one or two of these are for Emirates?
Could only envisage a rearranged schedule for that contract.
Maybe he will launch th 900?
Andrew, I doubt it. They’ve had how many years since they ordered these aircraft to find a customer? That they’ve only placed two (and with Emirates at that), tells me that the market will be rather limited. We just passed through the greatest ordering frenzy in the history of commercial aviation and ILFC still couldn’t find a home for all 10. Why they would sign on for an putative A380-900 is beyond me, but stranger things have happened–I guess.
This is an interesting one…I’ve been wondering what Aurora has mentioned (i.e.-the placing of the big birds).
If ILFC doesn’t go with the Big Beast, they can certainly go to more A350’s. They have only 8 A359’s on order.
Regardless, I think a lot of his decision will be based on how the global economy behaves in the next 6-9 months. I think he’ll be 100% sure of his decision by September-November.
Reports of the 380’s demise are likely greatly exagerated because the financial crisis has prevented its use in large numbers in the way Airbus planned; ie hub-to-hub. Its so-called problems may evaporate if and when things pick up economically, and there are enough 380s in service to meaningfully determine whether it will work according to plan. I note this past week that Flight International reports that Airbus is claiming they will be able to build the 380’s orders from the present 200 to about 600 over the life of the plane.
The 380’s major defect, which will not change, is that so far it has no freighter version. http://Www.Fleetbuzz.com has a good piece comparing the 380F to the new 747F. The main problem seems to be that the shipping containers the 380 uses are not standard, and the difficulty in loading the upper deck. I have even read somewhere several years ago that the upper deck of the 380F is slightly higher or lower (I can’t remember) than the upper deck on the passenger varient. This difference is one of the reasons why the 380F’s development costs were so high. The engineering work involved to re-postion that deck was costly. This difference in upper deck location also makes converting the passenger planes to freighters either impossible or very expensive, thus depriving airlines of an important value component of the passenger aircraft which other craft, such as the 747,767 and 777, have.
If they re-visit the A380F, I would not be surprised to see a Beluga style solution.
The issue raised in the Fleetbuzz article about container compatibility maybe not such a big issue.
I cannot remember which Boeing model, but a new standard container size was introduce to suit.
Maybe the 747 or 767?
A Beluga style A380 could do quite a job transporting XWB fuselage sections around, and with perhaps another 500 plus 380’s to build it could effectively eliminate that dreadful road convoy, which must cost a fortune.
Hamburg should always have been the place to build the 380, but try telling that to the French.
Andrew, what do you mean by ‘Hamburg should always have been the place to build the 380’?
Just thinking logistics. Hamburg is a major port city, and lets face it the 380’s go there for finishing, and parts of the main structure are built there.
Frankly, as an expat Brit, would love to have seen it built in Bristol, but its not even Airbus any more is it?
Having an A380 FAL in Bristol would be a nice dream, however it would never have happened given the UK government interest in EADS and Airbus. France and Germany were the founding members (of Airbus at least) and so it was always difficult to get any FAL work here. If anything, it would have been located in Broughton anyway. After BAE Systems sold their interest, the UK lost all political leverage to influence any decisions within EADS, other than threatening to cancel some future military orders. The Filton site is STILL Airbus! What they sold was the manufacturing facilities for existing programs minus the A400M wing assembly. The rest: Wing Development teams, Wind Tunnel, Fuel Systems and Landing Gear Design + A400M wing assembly – represents a very capable centre of competence for Airbus, which is hard to match.
OK, so Hamburg has a port, does this give it a right to assemble the A380? Compare that with Toulouse which has 30 years of experience of large twin aisle aircraft assembly. Germany has a high content of work on this aircraft + the A380 delivery centre for Europe and the Middle East regions.
I love how every media source is jumping onto every single issue on the A380 and portray it as some sort of evidence that it has either flawed design or a flawed business case. And they keep pushing either one agenda or the other every week.