Odds and Ends: Airbus optimistic on A380 sales; second A350 joins test fleet; CSeries factory progress

A380 Sales: Orders for the Airbus A380 have been dismal, but Tom Enders, CEO of Airbus parent EADS, sees a turn-around in sales. With the forthcoming Boeing 777-9X, which at 400 seats is considerably smaller than the 525-seat A380, Airbus sees the need to undertake Performance Improvement Packages (PIPs) to improve the economics of the A380. Tim Clark, President of Emirates Airlines and the largest customer by for the A380, has publicly said he wants to see the A380’s engine makers (Engine Alliance in his case) incorporate newer technology from the GEnx and the 777X’s GE9X and Pratt & Whitney’s GTF into the GP7200. The GP7200 is a JV of GE and Pratt & Whitney.

Airbus is also offering an 11-abreast coach seating in the A380, which would add 40 more seats and lower the cost per available seat mile (CASM) accordingly.

The A380 has proved more economical than Airbus expected, but needs a large load factor of at least 75% (393 passengers at the 525 seat configuration) to be profitably, Enders said. In today’s environment, this is achievable but it also demonstrates the risk inherent to Very Large Aircraft (VLA). According to our airline sourcing that has analyzed the airplanes, smaller aircraft, such as the 777X, Airbus A350-1000 and Boeing 787-10 have similar seat mile economics but lower plane-mile costs without the capacity risk. One airline tells us that “if you can fill the A380 and 747-8,” the airplanes have their place. The four-engine VLAs also are better in the hot-and-hgih environment for engine-out and field performance. But clearly these high capacity and hot-and-high markets are limited.

Enders also commented on the progress of the A350 flight test program. This story has detail.

A350 Flight Testing: The second Airbus A350 flight test vehicle has joined the test program.

CSeries Factory: Airchive has a long look at the program in building the new factory for the Bombardier CSeries.

53 Comments on “Odds and Ends: Airbus optimistic on A380 sales; second A350 joins test fleet; CSeries factory progress

  1. I just don’t see the quads selling in great numbers-especially with the B77X, A351 coming out in the next few years.

    Now if Airbus can get the “75%” number lowered to somewhere around 65% (I know its a tough task, I’m only hypothesizing) then the plane will be a huge seller IMHO.

    Don’t know the Boeing B748i numbers so can’t go there-though I would speculate on a % basis it might be around the same.

    • Info from only one carrier and not really representative of the plane itself.

      • Well, Emirates is not really “just” one carrier. By 2030, Emirates could have a fleet of over 200 A380s. They are already the world’s No. 1 airline by international traffic and one of the most profitable one. All of the current sectors flown by 777-300ERs can and probably will be replaced or augmented by A380s. The new airport being built at Jebel Ali will have an eventual capacity of three to four times higher than the current Dubai International Airport. Isn’t it ironic then that it’s the A380, in particular, which is forcing other carriers to act and adapt. Qantas has seemingly seen the light (i.e. if you can’t beat them, join them).

        As for the other A380 carriers, there are plenty of references going around about higher than average load factors. Only China Southern, it seems, is not optimally operating their A380s.

        The A380 is not to blame – China’s air transport market is still maturing

        The A380 has clearly proved itself with other operators; the aircraft is not the real issue here. Whether China Southern should have waited to acquire the aircraft at a time when there would be better scale from Guangzhou or a more liberalised operating environment, or if another Chinese carrier should have ordered the aircraft instead, is another matter.

        For now, China Southern must do what it can to move the aircraft into more viable long-haul markets, as challenging as this may be.

        So far, Beijing is not being helpful and is finding that the complexities of global partnerships make unilateral decision making (for example requiring China Southern to operate the A380 jointly with Air China, across alliance lines) increasingly difficult. As China’s airlines expand into international markets, at the urging of the government, the often unwelcome need to cooperate more effectively with foreign partners grows more necessary. Such are the realities of a commercial international marketplace and Beijing will not be slow to recognise that. If it means compromising on domestic priorities, like favouring Air China, something will have to give.

        http://centreforaviation.com/analysis/china-southerns-a380-operation-is-still-struggling-as-most-remain-restricted-to-domestic-routes-97464

      • Yes, EK is one carrier-no matter how one “slices or dices” it. How many A380’s they will have in the future is conjecture and not really statistically applicable in this situation.

        Regarding “profitability” – we aren’t given a breakdown by the various routes/planes/carriers.

        OV-099, most of your comment regarding EK, Jeble Ali and CAPA link is really non-sequitur. 🙂

        The orderbook for the B77W, A351 and upcoming B77X gives us at least an indirect clue as to where the bulk of sales for the VLA/semi-VLA market is. 350-400 pax seating seems where the “high end” is for large pax planes. 410+ to 420+ seater seems to be the “threshold” where sales have bogged down.

        Ostensibly Enders is giving us some kind of “over-all numbers” regarding the A380 which might include all or many of the carriers. I would rather go with what the CEO Airbus is giving us rather than trying to make some hypothetical conjectures.

        I would like to hear some info from Boeing’s “head-honcho” regarding the B748i (and B748F) as well.

      • “OV-099, most of your comment regarding EK, Jeble Ali and CAPA link is really non-sequitur.”

        Not irrelevant at all. One topic of Scott’s post is that Airbus is optimistic on A380 sales. It seems to me that as the biggest operator wants to double their A380 fleet (from 90), all depending on when the new aiport opens, since DXB can’t handle 180 A380s, it’s highly relevant to the topic in question.

        The CAPA article Points out that the A380 has clearly proved itself with other operators. Tom Enders is saying that the A380 has proved more economical than Airbus expected, but needs a large load factor of at least 75% (393 passengers at the 525 seat configuration) to be profitably. A simple Google search then, is all that is necessary in order to find out that the average A380 load-factor in most cases are above the 75 percent mark.

      • @ov-099:

        EK isn’t going to have 180 A380’s at one time. There might be a replacement cycle but there might be the fact EK won’t have purchased 180 frames. We don’t know and as of right now EK’s number of A380’s ordered is 90 (there abouts).

        Of interest is:
        reply 209
        “- John Leahy says airlines would have to install 550-560 seats in an A380 for the aircraft to match the unit costs of the A350-1000”

        Why go with an A380 (or B748i) then? The A351 and B77X will be more than enough plane for most carriers looking for VLA/semi-VLA planes.

        I’ve been hearing the same “its only a matter of time before A380 sales take off” for almost 10 years. It still hasn’t happened yet and competitive planes are coming which weren’t around 10 years ago.

        If the A380 sales is a success and brings in a good ROI for Airbus/EADS then “congrats”, meanwhile the program has been a money pit and has been a horrendous investment with a very disctinct possiblity of not recouping losses. All of the money spent was better off in a CD (certificate of deposit)…LOL.

      • EK isn’t going to have 180 A380′s at one time. There might be a replacement cycle but there might be the fact EK won’t have purchased 180 frames. We don’t know and as of right now EK’s number of A380′s ordered is 90 (there abouts).

        Really?

        –Emirates will start replacing its fleet of A380s by new A380s starting from 2020, so there is an “automatic replacement” requirement for another 90 A380s (on top of the 90 currently ordered).

        If Dubai’s airport constraints could be resolved, Emirates could take “many more” A380s, possibly doubling its fleet size.

        –Clark firmly believes that “the A380 is the future for long-haul mass transit”.

        –The A380’s slow sales in recent years are due to an “accident of timing”, as the A380 entered into service just as the global financial crisis hit.

        –Clark is pushing GE / Engine Alliance to upgrade the GP7200 with the latest engine technologies.

        http://www.flightglobal.com/news/articles/a380-must-benefit-from-emerging-engine-technology-clark-390796/

        It’s always highly amusing when you’ve got people uttering predictions about the future with the utmost certainty; you know, like predicting that Emirates will never have 180 A380s. 😉

        http://www.rinkworks.com/said/predictions.shtml

        Excerpts

        • “I think there is a world market for maybe five computers.” — Thomas Watson, chairman of IBM, 1943.

        • “Where a calculator on the ENIAC is equipped with 18,000 vacuum tubes and weighs 30 tons, computers in the future may have only 1,000 vacuum tubes and weigh only 1.5 tons.” — Popular Mechanics, 1949

        • “I have traveled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won’t last out the year.” — The editor in charge of business books for Prentice Hall, 1957.

        • “But what…is it good for?” — Engineer at the Advanced Computing Systems Division of IBM, 1968, commenting on the microchip.

        • “There is no reason anyone would want a computer in their home.” — Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977.

  2. It doesn’t have to do so much with the number of engines. An engine a twin moving 500-700 people 6000NM aircraft doesn’t exist nor is it planned. It would require a 240 k lbs engine (what an A380 has left with 1 engine out) . Roughly double the biggest GE90-1xx.

    A big 400-500 seat trijet 3 x 100k lbs, with multiple engine choices seems ideal in terms of reducing an aircraft being noisy/ overpowered, cargo capable and ETOPS. But I’ve seen no plans.. apart from the Airbus patent. http://www.flightglobal.com/news/articles/airbus-files-patent-for-new-trijet-design-223089/

    IMO part of the press overreacted a bit at the 3(!) LH cancellations in combination with the 748s bleak future. Enthusiastic even. The most likely A380 prospects in the next 2 years will be Cathay, ANA, SAA, BA, UA, Air China. And a few surprises.

    • keesje, the twin vs quad numbers get a bit complicated. Design a clean-sheet airliner seatng between 500 and 700 people with a wing sized and shaped for 6000 nm. Crank up the computers for lots of iterations to work out wing area and thrust required, then design an engine a few generations newer than those now on the A380, A350, and 777. Newer even than the 777X. The result will be a lower MTOW and fuel burn than the A380 but the same payload-range.

      It will still need to meet all engine-out cert requirement on just one engine. [That’s why a twin is inherently over-powered vs a quad]

      Present-day examples: 777-200LR and -300ER vs the out-of-production A340-500 & -600.

    • Lets not believe in miracles and trend that aint there.

      Maybe Airbus scores 1 or 2 A380 this yrs bringing the orders with Doric to 40.

      Did the global Trend chance (again) at that moment?

      Fuel gets higher, hubs crowded, slots sparse. The A380 has a long future,

      Its an evolutionary development.

      Saying there is a shift absoleting VLA is so much easier then concluding the 748 is not up to par.

  3. keesje:
    ” The most likely A380 prospects in the next 2 years will be Cathay, ANA, SAA, BA, UA, Air China. And a few surprises.”

    Somehow I doubt it. Perhaps EK will order another 90-100?

    “Airbus is also offering an 11-abreast coach seating in the A380, which would add 40 more seats and lower the cost per available seat mile (CASM) accordingly.”

    Oh yeah, I want to ride on that with the other 564 pax…….NOT. If the airlines can only fill the current A-380 to about 393 pax (75% load), what good will another 40 seats do? To maintain the 75% load, they have to fill another 30 seats with paying customers.

    The airlines would make more money flying two 350 seat B-777-300ERs (or 400 seat B-777-9Xs) to replace the one 565 seat A-380. Less fuel burn and more revenue cargo space.

    The A-380 has a very large frontal area, just like the C-5 and An-124, and is about 1/3 heavier than the C-5 at MTOW.

    • Reading comprehension TB 😉

      _75%_ is the load factor where profits starts to come in.
      A380 users seem to top 80% easily. ( Even CZ is above 😉
      I seem to remember that the window between cost equivalence and achievable load factors is rather narrow in the field.

    • KC :
      There are 777 with more than 470 seats (for instance AF flights between Paris and Reunion Island : 10 to 11 hours …). I’m not sure the same flight would be worse with a high density A380. Anyway to improve the A380 profitability, the 11 abreast is not the only solution for an airline. With the latest economy seats which are 3 kilograms lighter and 2,5 cm smaller, they could save more than 1 ton and add maybe 1 or 2 more rows of seats. And a lot of improvements (engines, weight, etc…) can be implemented by Airbus in the A380 before the 777X EIS.

      • I’ve had the AF 470 seater from CDG to SIN, 12 hours. NOTHING on Earth is worse.

    • My guess is that Airbus did not choose to promote the low-density 525 pax capacity number for the A380, and stick to it through a decade of of undewhelming sales because their such a swell bunch of super modest guys. With that said, what is understood to be the rationale behind the low targeted capacity?

      Is the plane light on thrust? Have Airbus just been that phobic about the plane being smeared as a cattle car? Seems like there must be some reason they would choose to promote the plane in a configuration that distorts CASM comparisons against the super jumbo’s favor.

  4. The A380 at 10-abreast is the same as a 787 at 8-abreast, the market can sustain neither in the long run. The 787 can survive at 9-abreast, but for the A380 it is more of a problem. 11-abreast is not a great config, 5 in the middle isn’t much fun, and that is just too many seats to fill for the most part. That is why the 747-8 is still a competitive solution at 10-abreast.

  5. I think squeezing more passengers into the A380 is inevitable, and may have been part of the original marketing strategy. Start out with a rather spacious, quiet, comfortable aircraft, complete with fitted sheets and showers, then “optimize” is for cost (Didn’t that happen to the original B747 too?).

    Are Doric Leasing’s order for 20 aircraft in this optimized format… the standardized format good for better operation cost but better leasing residual costs too? Remember, Airbus blamed airline orders of various seating configurations for delays, and it wreaked havoc on the A380 introduction. Retrofitting the seat wiring will be more expensive for later owners unless they standardize.

    • RH you are correct. 747’s started in 1970 at 2-4-3 nine abr but by 1980 just about everyone had changed to 3-4-3 ten-abr. The DC-10 and Tristar both started a few years later at 2-4-2 eight-abr, but all were soon changed to nine-abr, mostly 2-5-2

  6. Regarding the A350 flight tests, the comparison with the C-series flight test progress is becoming really dreadful for Bombardier…

    • How many recent Flight Test and Certification campaigns does Airbus have under its belt ( A340-5/600, A380, A400M and now A350XWB ) and how many Bombardier?

      • I’m sorry but I didn’t think the A-350 is certified, yet. IIRC the A-400M flight test and certification program was long and painful, including when Enders bailout out of one for a PR stunt.

      • “… think the A-350 is certified yet. ”
        obviously not but seemingly progressing like clockwork towards that goal 😉

        “IIRC the A-400M flight test and certification program was long and painful, ”
        Well, the wait for the FADEC software done with the proper tools probably was painful. Actuall flight test and certification much less so. Only visible hitch seems to have been the gearbox problem.

        “… including when Enders bailout out of one for a PR stunt.”
        Enders on crutches was much later .. and afaik not from an A400M jump.
        ( my guess: he didn’t want to sit pretty with Mutti Merkel 😉

  7. Birdy I was about to make a similar comment. Airbus is making a really impressive progress with the A350 flight tests. Second frame has entered the campaign and I see Airbus ramping up towards the end of they year. Given that they only have RR to certify on the airframe, I think they will be pretty much to the current plan. As they have just come out of the A400M testing, the brains are there to deal with any ‘unknown unknowns’…

    Mike, how long did it take for the ‘predictable’ and ‘negative’ A380 comments to surface? 🙂

    KCTB, would you prefer 10 across on the A380 or B777?

    • UK and KC – the 777 cabin is 231 inches wide vs the 747’s 240. If Boeing can reduce the 777X’s sidewalls’ thickness down by just a few inches, the nine-abreast 777 will disappear forever.

    • Doesn’t count. Airbus being optimistic about the A380 is one of the main subjects of Scott’s post. We don’t all have to agree.

    • I agree with you and Birdy that the A350 flight test program is progressing very well. There seems to be no issues and getting the second test frame up in the air bodes well for the remainder.

      I’m also pleased to see that the 787-9 flight test program has at least started off very well. Rumor has it that the second frame will be up before the end of October.

        • What is “8X4 feet” and leaves a “gaping hole” in the cargo hold ( cite from link ) ?
          a piece of belly fairing? ( no gaiping hole in the cargo hold though !?)
          or a belly cargo door ? what about decompression then ?

          • Apparently no body aboard the AI B-787 knew anything happened until the airplane was inspected after landing.

            http://www.thehindubusinessline.com/industry-and-economy/logistics/article5236972.ece

            “Yes, there was a gaping hole, during the normal transit inspection, it was observed. Engineers immediately rectified it,” an AI official said requesting anonymity. “It was not an emergency. There was no safety problem,”

            Was the panel removed for maintenance before the flight and not reinstalled properly? How many cycles and hours did this particular airplane have after landing on this mission?

            From the same link above:

            “A spare panel was flown to Bangalore and fitted on the Boeing 787, which was later declared fit to fly. But the return flight was delayed by over nine hours, they said.”

            So this panel is not a structural panel if it was replaced in just 9 hours, including the time to fly the replacement panel to Bangalore.

            I got news for you, panels and parts fall off airplanes everyday, all airplane types. This is not new news. Almost all are a result of improper installation after maintenance and very few are serious incidents.

      • An 8 x4 ft panel falls off and no one noticed until after the airplane landed???? Something does not compute

        A non-story, right up there with passengers describing a normal go-around as a violently aerobatic maneuver.

      • Uwe,
        I agree that the article was not very well written and there seem to be “facts” in conflict. Apparently, “gaping hole” and “grave risk” are subjective descriptions.

        My guess would be one of the belly fairings came off. If it was a cargo door, then the decompression would very likely have caused damage that is not repairable in the time frame of a day.

      • It was most likely a cargo lining panel which are about that size – their primary function is to contain a cargo area fire. I wouldn’t be noticed until someone unloads the cargo.

  8. Well…I’m glad Airbus is optimistic about A380 sales. I am not. I mean, I’m confident the A380 is going to make some money for Airbus on a per-unit basis, but I’m not so sure that its future profits will ever cover all the development and production costs sunk into it. I just don’t think they will sell that many A380s.

    However, if Airbus learned some lessons from the A380 debacle (and the 787 debacle, too) and applies these lessons to the A350 Program, then I’d say the A350 Program stands a very good chance of being a tremendous financial success. And…so far so good. The development program looks like its going smooth and most of it seems to have been bankrolled with current cash flow. That’s pretty amazing….it’s like aircraft development has been incorporated into Airbus’ corporate DNA.

    Soon comes the scary part of the A350 Program: Production. This is where the real hard-core cash burn begins. I figure Airbus has got to simultaneously staunch the cash burn of the A380 program while bankrolling a new source of high-rate cash burn from the A350 program.

    These are interesting times for Airbus.

  9. I love all of your comments. But how manny og you have flown on a A380? Especially the negative kc135topboom.

  10. Interesting that people are calling the a380 a flop, I hate to think what TopBoom calls the 747-100, only 167 were built according to Wiki, the a380-800 is nearly 100 orders ahead already. It took four 747-100 variants to reach the final total of 250:

    http://www.boeing.com/boeing/commercial/747family/pf/pf_classic_back.page

    Another a350 stretch after the 1000 is inevitable, but I don’t know when. Airbus had to spend much more on this model than they planned to originally, they would have been silly not to include the ability to stretch it further in their plans. Bad news for 777-X and another reason, in my poor opinion, to accept the extra cost of going with a clean sheet, and slightly larger, 777 replacement. Will current management have the courage? I doubt it, but if they keep loosing sales they might not be able to avoid seeing it.

  11. It’s odd – I have flown six times in an A380 so far and all the seats around me were filled. Where are those 75% load A380’s?

    To software developers out there, build an app that will allow me to plan a journey on A380’s only and avoid the cramped 777’s that has become so fashionable. I will be first to download it. (777 is a great but noisy and cramped plane, spoilt by greedy airlines)

    • No one is saying the A380 is having poor load factors. Maybe you can show us where that has been stated.

      • TB (in comment 48272) turned the “profitable starting at 75% load factor” from Enders
        into “load factor is ..75% “.
        Having a comparison of cost equivalent loadfactors would be quite interesting.
        My impression is that 75% is not a bad number.

        The “AI gaping hole” gave us a keyhole view into their load factor 140 in 256 equals ~55%.

  12. Load factors aren’t all to everybody either. IF ANA has a 90% loadfactor on their 777-300ER’s, that’s 200 passengers to pay for everything and create some profit too.

    Adding more seats would lower their loadfactors, improve turnover, yields? Depends on the markets.. Sometimes is better the replace 2 rows of business class with 36 economy seats. Sometimes not.

    E.g. AA made entirely different trade-offs. http://www.seatguru.com/airlines/American_Airlines/American_Airlines_777-300_ER.php

    Analysts are always searching for clear performance indicators & often skip the all determining context. Probably because they have to avoid the complexities for the bigger public/ advertisers. Or can’t / avoid handle it themselves..

Leave a Reply

Your email address will not be published.