Playing number games with the A380

Feb. 15, 2015: Orders for the Airbus A380 have been slow, almost glacial, since the program was launched in 2000. Despite a 20-year forecast then and every year since by Airbus that suggests there is a need for 1,200-1,700 Very Large Aircraft (including freighters), sales of the A380 and Boeing’s 747-400/8 have never reached a point that support the forecast.

Airbus’ latest forecast now is for around 1,500 VLAs, including freighters.

Slow sales hang over the prospect of developing an A380neo. We concluded last year that Airbus had to proceed with the neo in order to spur sales. The commercial viability is a matter of great debate, but Airbus Commercial CEO Fabrice Bregier said last month Airbus will produce a neo, and even stretch the airplane.

Aviation consultant Richard Aboulafia, a critic of the A380 from the get-go, thinks Airbus would be nuts to launch a neo. At the Pacific Northwest Aerospace Alliance conference last week in Lynnwood (WA), in the heart of Boeing country, Aboulafia renewed his decades-long criticism of the airplane.

He took aim at the order book, which stands at 317 from 18 customers. The backlog at January 31 was 164.

EK A380 777X

Click on image to enlarge into a crisp view.

Aboulafia, in criticizing the market for the A380, eliminated the 140 orders from Emirates Airlines and 20 orders from lessor Amedeo to show that there were 157 orders.

Simon Pickup of Airbus, speaking the following day, put these orders back into discussion in support of Airbus.

We subsequently asked Aboulafia his rationale for eliminating the Emirates orders, which represent 44% of the order book.

“Emirates is a great customer, for both the A380 and 777X,” Aboulafia replied by e-mail. “I was trying to get people thinking about the A380neo launch decision, from the perspective of top Airbus management and the board.

“The first point is that aside from Emirates, there has been almost no commercial interest in this plane in recent years. And you don’t launch a plane for one customer,” he wrote.

“More than that, most of the 60% of the order book that isn’t Emirates comes from orders placed many years ago, and all the trends over the past 12 years, again, suggest no interest by non-Emirates customers. And many of these are defunct orders. In fact, the real backlog, aside from Emirates, is just 35 planes or so (remove Virgin [Atlantic], for example). And if they launch the neo, some of these 35 surviving non-Emirates orders will convert, giving Airbus a real problem with a production downturn. Airbus will also face a big problem with unwanted used planes, particularly if Emirates retires its planes at 12 years of age and replaces them with neos. If they don’t launch the neo, then Emirates might be forced to keep its current planes for longer, removing the problem of unwanted used jets.

“With this backdrop, launching the A380neo would be madness. The greatest irony…I don’t think they’ll launch it, because I have faith in the quality of their leadership.”

In a January interview with Airbus chief operating officer-customers, John Leahy outlined the strategy of dealing with used A380s, the first of which will come from Singapore Airlines. In September, Tim Clark, Emirates’ president and chief operating officer, told us he’ll just scrap his A380s as they reach 12 years.

We pointed out to Aboulafia that the Boeing 787 was launched with one customer, ANA (for 50) and by the end of the first year of sales, there were orders for just 54 787s.

“With the 787,” Aboulafia replied, “there was a demonstrated market that was many decades long. The A380 both in terms of market and product was a complete leap of faith. The Neo by contrast falls under the heading of madness.”

Emirates has a greater dominance of orders for the Boeing 777X than it does for the A380. Emirates orders 150 of the 289 “Xs”. Qatar Airways ordered 50 and Etihad 25, making Middle Eastern carriers comprise 225 of the orders. These were announced at the 2013 Dubai Air Show. Emirates and Qatar firmed their contracts last year, and Japan’s ANA placed an order for 20 in July. Other than the additional ANA order, there were no 777X orders last year.

We believe that if there is a future for the A380, it rests with the neo. Our Market Intelligence continues to tell us that Airbus will proceed and Rolls-Royce will be the engine source. Entry-into-service would be around 2020-21.

Aboulafia may be proved wrong about whether Airbus launches the program, but he has a valid point about the prospect of a production gap.

125 Comments on “Playing number games with the A380

  1. Don’t worry,Airbus will Con/Manipulate Current State Owned/Subsidized Carriers and Their Affiliates to purchase a revamped A380 Neo………….and of course the plane will fail on Promises.
    RR history with launch or revamped Series engines and fuel burn rates is pretty bad.

    Airbus will sucker the EU taxpayers,State Supported Banks for Billions more from losses on low A380 neo sales. Currrent Program already loses serious money as it is…………..becomes a situation of lots of Airbus/Affiliates losing employment. Socialism Marxist Quasi-Capitalism…………..their Ideology is too even purposely Lose Money at all cost

    Large Twins are Present and Future………even the all ready proven 747-8 has limited take-home rates; as there are plenty of now and future flight-worthy 747-400s/777s ready to be converted as Freighters in the Future with lots of life left in the pressure-Cycle scheme of things.

    • … I honestly have no words, yet am typing this comment in my utter bewilderment…

      Bravo!

    • The A380 has a backlog of 317-153=164. Production rate is about 30 now. So about a 5 yrs backlog.

      Airbus seems not to be in a hurry, holding of a NEO upgrade, pushing back. Viewing it as an unnecessary investment in a segment they totally dominate anyway.

      Ramping up the A320 NEO series and successful big twin programs A330 NEO and A350XWB seems to have higher priority.

      However key customer Emirates is openly pushing for a A380 NEO, promising to order 100. That alone would easily cover the ROI for the modification.

      Furthermore there are other A380 modifications under consideration, the maindeck lift to enable 18 inch 11 abreast, wing tip modification, eight saving and a possible stretch.

      The current 14 A380 operators are Etihad Airways, Asiana Airlines, Qatar Airways, China Southern Airlines, Malaysia Airlines, Thai Airways, International, British Airways, Air France, Korean Air, Lufthansa, Qantas, Singapore Airlines and Emirates. This year Transaero will join.

      Near prospects are fast growers like LATAM and Turkish and long term VLA operators like ANA, United, Delta and Air China.

      http://airwaysnews.com/blog/wp-content/uploads/2015/01/British-Airways-A380-Savings.png

      P.S I don’t mind provocative posts at all. As long as it is on the content and ideally, a bit fact based/ substantiated.:D

      • 100 aircraft is not necessary sufficient to recover the investment. First, airlines get important discount, particularly for large order and good customer. If a normal customer can get about 30% on a small order and 40-50% on large order, a good customer with a large order can get more than 50% discount.

        On a other hand, the development of an A380 can be more expansive than you think, particularly if you consider engine development cost and indirect cost. For example, the production gap will be an issue. Airbus need to produce at a rate of 30 units per year in order to breakeven. The company loose money when it produce the A380 at 25 aircraft/year. Airbus will perhaps breakeven this year. However, if they need to reduce the production rate for the transition to the A380NEO, they will again losing money by selling the A380.

        Also, several issues need to be considered. First, if a NEO is launched, Airbus need to rework the wing in order to find a less artisanal solution to the cracks problem. Second, there is almost not gap between the engine and the ground if you consider nose gear collapse. Thus, the introduction of a new engine with higher bypass-ratio and larger fan diameter will be problematic. Of course, it is possible to rework the nacelle, the pylons and a little bit the wing but if this is not sufficient, they will need the stretch the landing gear. Which will be prohibitive.

        • “Second, there is almost not gap between the engine and the ground if you consider nose gear collapse. ”
          See:
          http://upload.wikimedia.org/wikipedia/commons/7/7c/Airbus_A380_sideview.svg

          draw a line. This is a non issue.
          You’d be right to note this on the 777 and 787. Both nacelles tough the ground before the nose is on the ground.
          Interesting that nothing can pose an issue for Boeing but everything including an FA’s stopped up nose is a most dangerous issue for Airbus.

          • take a real drawing and not an airlines “costume” rendering 😉
            A380: I’ve taken the rear mlg as rotation center.
            even with flat tires this is probably too far back.
            nose touches before nacelle.
            777,787:
            rotational center MLG: nacelle touches first then the nose. flat tires would be even worse.
            If this is fully acceptable in a a Boeing craft
            it can’t be a major problem for an Airbus design.

          • There is no reason why your “real” drawing is more accurate than mine. Moreover, you need to take the front tire of the front MLG as reference in case of nose gear collapse.

          • Best case is the forward bogie’s point of articulation.
            Worst case is rear bogie’s point of articulation.

        • “Airbus need to produce at a rate of 30 units per year in order to breakeven. The company loose money when it produce the A380 at 25 aircraft/year.”

          – Can you provide me with the specific source where Airbus stated this?

          • It was from comments their CFO made at the 2014 investor days… I have been looking for the exact quote as well.

          • Well, the nice guy at Airbus said that they will reach (production cost) break even this year and stay below for the next 3 ( 4?) years.
            With no further orders production after that would again be more expensive than expected revenues.
            You have the numbers if you look at the taken production slots in the next years.
            How many (already ordered) frames are targeted for 2018 and 2019 delivery?

          • I seem to remember this being talked about in the January 15th Annual Press conference hosted by Fabrice Bregier. Try going through the video.
            ( or is there a transcript around ?)

      • Transaero has issues so I would call that Skymark iffy until it actually takes delivery.

        And the $64 question is why would you buy an A380ceo if there is an NEO to come?

        And will Emirate really return the A380s to the smelter?

        Amadeao 20 order is a joke with none sold.

      • A380 is a money loser as the A340 program was;and all Airbus EADS Products are. Who can forget Airbus’s PT BARNUM(Our own US citizen John Leahy) 10+ years……stating the A380 is gonna a be a game changer and we won’t be able to keep up with demand at 8 planes a month for the next several decades. 10 years later, Airbus has barely managed to assemble 100+ (each at a loss). The Saudi recent Large order is all-loss orders too ………as they are investors in The Daimler Benz/Mercedes Benz Group…….a major Contractor for EADS/Airbus………….the only real source (beyond trucks) for Profit.

        The Saudis get “employee/owner” massively discounted below-cost prices that put the A380 further in the RED!

        • ‘D McNamara’

          ‘The Saudi recent Large order is all-loss orders too ”

          I think you should be aware that Saudi Arabia and the United Arab Emirates (UAE) are two independent countries.

          While Emirates Airline (EK) is the leading A380 operator Saudi Airlines have not ordered a single A380 but operate a range of Boeing (B777, B747) and Airbus (A320, A330) aircraft.

          It usually best to check the facts before posting making such posts.

          • The Royal Families (Arab/Muslim)’ which own all the Local/International Carriers located in the UAE/Saudi Arabia all have stake in Airbus/EADS. Yes, they may be “UK” managed…but it’s a token diplomatic gesture.

            Arab Carriers get Massive Discounts………..as they partly own companies responsible for Airbus end-Products.

            A380 is a money loser…………..more so if it’s dragged-on by a couple-hundred more Emirates deals.

            A380 is Bloated(fat) and with GE-P&W Hybrid/ and Trent being the only option (now/in the Future)…………it has/will fail on its Fuel burn,maintenance/repair promises.

            Rolls Royce Lies/Fails on every Evolved version of the RB211; which the Trent is. Extant and the Future.

            Even if GE allowed them to use a Version of GE90/GenX………..it would still fail……….as Airbus has a tendency (by product of a Government Project) to bring the planes-in over weight.

            What? an Empty weight A380 weighs-in at 650,000-700,000 + lbs………..and rarely carry’s more passengers (annually) than a current 747-8/747-400,A340, or 777 Stretcth…..yet the A380 has to lift 200,0000-250,000+lbs of extra dead weight just to get aloft than a A340,777,747-400.747-8

            With the A380 Freighter Program cancelled 10+years….because Airbus lied about its capabilites………..that in itself should tell you……..A380 is plane to avoid buying.

  2. Richard Aboulafia has, among other things, staked his professional reputation on the A380 supposedly being a failure. Of course, he doesn’t want to see an A380neo nor does he want to admit that the growing fleet of Emirates A380s is significantly influencing changes in global air travel patterns. Eliminating the 140 orders from Emirates from the equation is nothing but self serving, but entirely predictable.

    • Do you really think R Aboulafia lets his market intelligence be driven by his desires? Sure, interpretation comes into it, But I don’t see him fanboying vs the A380 (i.e. rejecting any a380 success based on passion rather than reason)

      • “Do you really think R Aboulafia lets his market intelligence be driven by his desires?”

        It may look as if he’s already been there, done that.** For example, back in June 2006 he wanted Airbus to kill the A380 programme outright — all the while managing to conclude that the A330 was already done in by the 787. Not content with that, he further urged Boeing to go on “killing” the A320 by launching an all new 797 narrowbody. If that’s not outright cheerleading winning over an astute market intelligence, then what is?

        Of course, Richard Aboulafia later admitted that he was cought up in a drug-like rush*:

        *This is all seriously bad. As we digested the news, I paused to reflect on just what a tremendous drug-like rush the 787 program once was, and just what a ghastly let down it has become.

        http://www.richardaboulafia.com/shownote.asp?id=295

        **I’ll put on my analyst hat and offer some free advice. Airbus and its stakeholders should do a brutally honest assessment of the A380. First, look carefully at the customer contract terms and pricing. Can it ever make money? Can the performance be improved? What will the penalty payments look like for missed performance promises and for late delivery? If the next few weeks see more than one or two customers cancel, that’s a good indicator that this plane will just suck cash.

        Next, assess company resources. How quickly can money and engineers be shifted from the A380 to the A370? The A380 (along with the 747-8) is chasing 5-10% of the market by value; that middle market widebody segment is 50%. And, if they’re late with the A370, they run the risk of losing the narrowbody franchise, the other 40-45% of the market, to a Boeing 737 replacement. The situation was bad enough before the new delays. The new schedule implies an ongoing ulcer that distracts from the other 90-95% of the market.

        In the interests of fairness, here’s some free (and obvious) advice to Boeing: as soon as the 787 is out the door, launch the 797 narrowbody. Do to the A320 what the 777 and 787 are doing to the A330/340.

        To sum, if there is no hope of quickly turning the A380 into a competitive plane with decent economics and then shifting design and production resources to more important segments, kill it. The write-offs and political shame will be terrible. But national, continental, and corporate pride should have nothing to do with what is essentially a business decision. More importantly, the alternative—to keep going and risk losing everything—is worse. There isn’t a lot of time here, and it’s tough to learn from fatal mistakes.

        http://www.richardaboulafia.com/shownote.asp?id=221

      • ikkeman,

        If you are not singing the praises of the A380, then you are a fanboy hellbent on seeing its failure. For too many people who post here, there is no middle ground.

        Unfortunately, I’d like to see a future for both the A380 and 748, but it doesn’t look too good for either, and I’d really hate to see Airbus commit itself to a NEO when the current version isn’t setting the order book on fire. I think they are caught in a particularly bad space…
        OPTION 1) if the NEO, Emirates buys in and (uncool) converts their remaining to the NEO, leaving a production gap, and slender hope of follow on orders.
        OPTION 2)If they don’t NEO, Emirates will still buy their remaining aircraft, but after the current production run, the A380 may be overrun by the twins (77X and A351), and slender hope of follow on orders.

        Not a good spot to be in, for sure. Maybe they have a big sales reveal coming….

    • The meme of the “archaic beached Whale” has been carefully rubbed in over the years. Wonder how much that has cost to achieve?

      To bring back the “real” market forces into play will require a lot of stamina from Airbus. A mismatched meme will wear off over time. But it will take its time.

      Always noteworthy that mostly shareholder value and Quarterly Results dominated airlines shy away from the A380.

    • Richard Aboulafia’s reputation is by no means staked on his comments on the A380! While yes, he does enjoy making controversial statements from time to time to get in the press, he either backs those statements up or admits when he is wrong.

      So far, his initial comments from the early days of the A380 program have proved to be spot on. It has a been a financial disaster for Airbus, which has prevented them from having the resources necessary to overtake Boeing in either revenue or profitability. No one is arguing the fact that Emirates has been wildly successful in large part due to the A380, however that doesn’t mean it’s also a success for Airbus.

      You’re mistaken if you don’t think that Airbus cares about Richard’s opinion. He is perhaps the most respected aviation analyst in the world, and has been invited to speak in front of both the Airbus and Boeing boards (and will continue to be invited due to his frank assessment of the state of both companies).

      • “He is perhaps the most respected aviation analyst in the world,”

        Or “world” in your case is really only the US, right? — or just like the World Series? Doesn’t mean much, does it?

        “Richard Aboulafia’s reputation is by no means staked on his comments on the A380! ”

        I’m sorry, but he lost any independent stature on the global stage when he co-authored A Shadow Critical Project Appraisal: The A380 Program. It’s a Boeing sponsored FUD hit-piece on the A380 — yet it doesn’t say so in the report. In fact, I don’t think too many people in the industry takes that report any more seriously than they would Randy Tinseth’s marketing blog. So, yes Richard has petty much staked his reputation on the A380 being a failure. Hence, he doesn’t want to see any neoing of the aircraft.

        https://s3-eu-west-1.amazonaws.com/rbi-blogs/wp-content/uploads/mt/flightglobalweb/blogs/flightblogger/050416-shadow.pdf

        Interestingly, one of the other co-authors — George W. Hamlin — recently wrote a viewpoint piece at AW&ST. Again, highly predictable.

        http://aviationweek.com/advanced-machines-aerospace-manufacturing/viewpoint-airbus-a380neo-makes-no-sense

      • In 45 years Boeing has produced 1537 747 of which there have been 22 variants, a very significant achievement in aviation history and a sensation in 1969 when first introduced . Remember Boeing “BET THE COMPANY ON THE 747” back then. Do the math 45 years 1537 aircraft 34 per year on average.
        A380 First and only version to date [maybe 21 more to come?] into service 2007 as of end 2014 153 in service or 21.85 per year to date production up to 30 per year as forecast starts getting to the B747 numbers with 38 years to go to get to 45 years in production and maybe less than 22 variants my guess is that the A380 will equal and even surpass the venerable and World Leader of the 20th century in VLA in the 21 st Century
        Also I don t understand the comments re cost to date the B787 program is $30 billion in the hole. Has the A380 program still a way to go?
        AJK

  3. Dear Mr. LEEHAM

    1) “(AB) With this backdrop, launching the A380neo would be madness. The greatest irony…I don’t think they’ll launch it, because I have faith in the quality of their leadership.”
    In September, Tim Clark, Emirates’ president and chief operating officer, told us he’ll just scrap his A380s as they reach 12 years””
    Aside of the obvious madness, if Tim Clark is serious telling he will scrap his A380 after 12 year of sevice he is documenting that
    he considers this aircraft a presently already quite obsolete aircraft, and certainly not only because of the present motors.

    2)””We pointed out to Aboulafia that the Boeing 787 was launched with one customer, ANA (for 50) and by the end of the first year of sales, there were orders for just 54 787s.
    ##With the 787,” Aboulafia replied, “there was a demonstrated market that was many decades long. The A380 both in terms of market and product was a complete leap of faith. The Neo by contrast falls under the heading of madness.##

    And I add: Aboulafia is obviously right. and I add: that the B787
    which sells well inspite the problems, which essence was not foreseeable, as the main culprit were failures of subcontractors (even if Boeing shall be blamed for its management lack of supervision). I it were not due these problems, the B&*& would habe been a economical supereclat!!

    3) “Airbus will sucker the EU taxpayers,State Supported Banks for Billions more from losses on low A380 neo sales. Currrent Program already loses serious money as it is”

    This is a fact. The French Government considers AIRBUS as his paradehorse, as do the EU, the billions and billions cost overunns
    of the A400 paid by the latter are not more than a government subsidy

    AND more important:
    Aboulafia writes
    “” With this backdrop, launching the A380neo would be madness. The greatest irony…I don’t think they’ll launch it, because I have faith in the quality of their leadership.”

    I think that faith is only ironic! Fact is, both Begier and more so Leahy are trying desperately to hide the real siuation of their company with “positive:” newa, even if they have got already a black eye from their meeting withtheir shsreholder facts are
    that additional to the A380 and A400 issues are supplemented* by betwen other:

    * The miss-designed A350-1000, which is too small (even if putting passengers in the WC(!) and need to be deelopped to a larger A350–1100 to be ableto compete with the B777-9X

    * and The A350-800 is dead and the enthutiasm for the A350-900 is quite muted

    * The the A33o neo has not shown the meeded support affirming the optimistic technical data statements supplied by Bregier and LEAHY. As axample: the DELTA not affirmed A339/A359 order is subject to the captioned data

    * And even id due to strange secrecy covering the reasons of the lack of disclosure of the cause of the incident flight QZ8511, which seem also strangely so similar to the AF447 catastrohe, there are rumors that as in the case of the latter, th real problem is that the “fly by wire” design is faulty or at least so complicated that the pilots in case of emrgency are notable to manage it. Which would be a real problem.

    I am sending a Copy of this to Mr.Aboulafia

    Regards
    Dennis

    PS: Please pardon my bad English

      • He’s and avid eMail reader and writer 😉
        a “synergetic” conversation is possible.

      • Does anyone remember a poster here from sometime ago called “checklist”? 😉

    • The old mantra the A380 is a disaster somehow sticks to the wall with some. We should almost forget the A380 is a popular and reliable aircraft with a five year backlog & a rich customer offering to pay for a NEO upgrade.

      ROI will be in a few years (2018) & it will dominate the VLA segment for the next 20 years. Is that an option? Hind: brace yourself, it’s likely to happen in the real world.

      I see all this renewed A380 bashing as a kind of fallout after the ugly A380 is everywhere and seems to have knocked the Iconic Queen of the Skies out of the arena. That’s hard to digest sometimes.

      • The iconic Queen of the Skies sold over 1,500 copies so far. The A380 will never come close to that record. That’s hard to digest sometimes.

        • Not even remotely something keesje was talking about here.

          As for Aboulafia – was and is one of Boeing’s most pronounced cheerleaders. Look at how he kept raising the bar on the A350XWB when in was launched or how he positively lost it when JAL ordered the A350XWB. He did actually criticise Boeing there – because the 777X “should have” made Japan “an all-Boeing island”. That is fanyboyism – even if the other team wins a match, it’s not because of their own qualities, it’s because of Boeing hitting “the snooze button” (all quotes from Aboulafia’s October 2013 newsletter) and thus losing customers they shouldn’t have lost.
          Discounting EK’s orders for the A380 while not doing the same for the 777X falls into the same pattern – as OV-099 said, self-serving but also entirely predictable.
          The prospect of an A380neo to Aboulafia is like the prospect of a TV series he hated and agitated against from day 1 getting extended for another 15 seasons. OF COURSE he’s upset.

          Like Scott, though, I agree with Aboulafia on one thing: There will be a production gap if (as I expect) Airbus do a NEO on the A380. A more noticeable one than with the A330ceo and current 777.
          But then – almost two years passed between the last 747-400 delivery and 747-8 EIS and I don’t remember Aboulafia ever raising that gap as a serious issue. So I’d say it’s going to be ok either way that gap business. Looking at total annual programme profit, a gap in A380 production shouldn’t be as much of a concern as a potential gap in A330 production, either.

          • Maiden flight of 747-8F was Feb 2010. EIS was Oct 2011

            last 747-400 passenger was delivered April 2005 the last line number built was delivered may 2009

        • But from aircraft 15 to 686 where built with the wrong grade metal from the old U.S.S.R
          what caused Boeing a big problem on sec 41.

      • Just want to point out that “ROI” will not be achieved in 2018. The program will briefly stop digging a deeper hole in 2018 and will be cash flow neutral or slightly positive at production rates of 30 aircraft per year. Airbus will of course never recover what they’ve already invested in the A380.

        • What killed the 747?

          The 777X or the A380 or both?

          Do you think the 747-8 will ever reach anything except being Air Force One?

          • Perhaps as a cargo aircraft, probably not as a passenger aircraft.

          • Mostly Boeing (.. Management and their love child the 787 )
            Though one could invert that. If B Management had refrained from entangling Airbus with a “747 derivative gone wild” and direct all their effort at the advancement of the 787 that project might have run much better.
            Then, I don’t think that B management has the right attitude to advance any hands on project in a positive way.

            Their game is a different one and the primitiveness of just building good airframes doesn’t really have much relevance.
            Sinking money into negative/positive PR has been much more effective than any 748 or 787 will ever be.

        • That is [mistaken]. Airbus will break even on the superjumbo this year already. They have said approx 25 planes is enough to do that.

      • Keesje: You have missed the fact that the “rich” customer is not paying to upgrade to the NEO.

        RR is, Airbus is, Emirates cuts the best deal they can get.

        Ergo, Airbus needs to look after Airbus interest the same as Emirates looks after Emirates interest .

        If Airbus goes into the hole with more A380 upgrades then that’s Airbus problem not Emirates .

      • How in the world will A380 ROI be in 2018 when it hasn’t actually had a single year of OPERATING profit? AKA, the program has paid down 0% of the R&D. 0% of the capital costs. And has never made a cashflow positive contribution! 2015 is currently projected to be the only year in which the A380 program won’t be cashflow negative!

        The ship sailed on A380 ever having a positive ROI years ago. They’ve basically written off R&D and capital investment for the project. Their goal at this point is to not have the project be a continual negative cashflow machine. The only reason to do a A380neo is if it will generate a greater return than not doing it. And the numbers for that are questionable at best.

      • A380 Program is still paying late-delivering penalties for planes (ordered/yet not delivered as promised a few years later 10+ years ago)………..the Program is Billions in the hole and will continue further so. Who can forget the German Labor Union Strike…….demanding the A380 assembly process lose money.

        Will the A380 go away anytime soon?……….Never……….as its business platform is built on the old Soviet Marxist Way of building planes………..demand/extort your own State Owned/Sponsored banks to keep the Scheme afloat and sell to anyone/company alive/dead……..bad-credit/no-credit “hey, we got a deal for you” and keep building them even if no orders come in.

        As the Euro is very Unstable………when it does eventually collapse……….when it cannot continue to give “free bees” to Italy,Turkey,Greece,etc…………Airbus/EADS Programs like their former Russian Counterparts will Collapse and 86.

    • At 1):
      Tim Clark said he could scrap the A380 after 12 years AND the aircraft would still be profitable for Emirates.

      He also said a full 777 is as profitable as an A380 with the same amount of pax. Emirates’ 777 at 10-abreast with 442 pax offers 50 seats less than an Emirates’ A380.

      At 2):
      Boeing was in desperate need to replace the no LD3 capable 767.

      You can sell nearly any product at discount price even a 787.

      At 3):
      The EU gets paid for every A330 and A320 Airbus sells.

      Within the last 5 years Airbus sold more A330CEO then Boeing 787 at realistic prices.

      A350-800 development was stalled because the A330-200NEO / A330-800 could do the same job cheaper.

      The A350-1000 is to small? I would say the 777X will still be to small for 10-abreast. The 777X will be the next 747-8. No moon shoot but shoot to short.

        • Wikipedia says that Airbus has paid (it doesn’t say until what date) U.S.$6.7 billion in royalties back to the EU

  4. Someone finally noticde that 777x orders have not been flooding in.

    That means something. I do not know what.

    • The A380 took about 10 years before to reach the number of 777X orders. The number of orders of the A380 at its beginning was much smaller. Moreover, if you exclude the orders from Air France and Lufthansa, the number gets even smaller.

      • If we exclude the EK/QR orders from the 777X orderbook and compare those to the 6-7 orders the A380 got in its first full year, that says a lot about its long term viability. 🙁

        😉

        • How to say, Air France and Lufthansa were politically pressured to buy the aircraft. That why I mentioned that their order should not be considered. EK/QR are not politically pressured to buy the 777X, it was a pure commercial decision.

          Moreover, I think it is important to point that the 777X gets as many orders in 1 year as the A380 in 10 years. Also, the tag price difference is almost negligible between the 777-9X and the A380, for me this show that aircraft like the 777 are more adapted to the market than the A380.

          • The price tag of the 777X is pure speculation. Such an assumption failed once. The 787 was offered for less than the 767.

            We also don’t know for what price the 777X was offered to EK or QR. Emirates and Qatar have a fleet of over 170 777 together. Emirates is the biggest 777-300ER operator. So the 777X is more or less a replacement deal for them.

            “Also, the tag price difference is almost negligible between the 777-9X and the A380”
            Could you imagine the 777 price tag without the A380?
            The negligible price difference could make some customers start thinking…

          • Javier Irastorza Mediavilla estimated Boeing’s 2014 discounts at ~ 47%. I suppose a lot of the proudly announced orders were achieved by low ball offers.

          • You think that 777X sales to LH and AF were backed by political pressure?
            I was of the firm belief that only happens with Airbus and those same EU airlines 😉

            This is interesting. I noticed for LH that the Boeing sale was a bit overstated. But that is a basic American property. “Everything” is overstated 😉

          • This is laughable 9and unfunded), AF is one of the biggest customer of the 777 and LH is the only customer of the 747-8

  5. The blogosphere would be duller without Richard. As Leeham notices he wouldn’t consider for a second eliminating the EK order from the 777X backlog for any reason!

    In my opinion we should not overlook the A380 is just a tool of Emirates long term strategy. (becoming the LON/SIN/HKG of middle east before they run out of oil)

    Their extreme expansion, growth and success caught the established airlines / airport by surprise over the last decade. I see a counter movement of established new airlines / alliances / hubs coming up. Leading to yet unforeseen fleet developments in the next decade.

    http://www.arabianbusiness.com/singapore-airport-growth-plan-could-rival-dubai-534133.html

    http://www.hurriyetdailynews.com/turkey-breaks-ground-on-third-istanbul-airport.aspx?pageID=238&nID=67507&NewsCatID=345

    Forecasts often are extrapolations and organic models based what we saw in the past. So if the past proved unpredictable, so will be the future.

    Things are moving as we speak. E.g. Is LH switching friends, replacing SQ for Turkish? Will SQ sit on their hands? Will KLM ? And CX now QR takes stake in BA (Losing their grip on Kangaroos). EK pushes away Air India, new laws from Delhi? Will Paris do strategic investment in AF?

    • “In my opinion we should not overlook the A380 is just a tool of Emirates long term strategy. (becoming the LON/SIN/HKG of middle east before they run out of oil)”

      If the “they” you are referring to is DXB, I suggest the following consideration: the emirate of Dubai ran out of oil years ago. It is the emirate of Abu Dhabi that has the oil, but they have their financial loyalties with Etihad Airways, not Emirates Airlines.

      That ship may already have sailed. See: http://centreforaviation.com/analysis/uae-airports-pass-100-million-passengers-for-2014-209527

      The table at the end of the articles shows SIN and HKG are not on the list. And that was for 2013 data.

      Of course one must agree with your reference “things are moving as we speak”

    • Take them down into spare parts?
      Or is the commonality to later production items too low?
      Even a rework/finishing should be more expensive than
      what can be fairly asked from a customer.
      i.e. writing them off now should show a lesser loss than fixing and selling.

    • The EK A380 are not being scrapped because they are early models. They are being scrapped because there is no market for them.

      • “They are being scrapped…”

        – Implies that they have started scrapping them. Which MSNs, may I ask?

        • No A380 is being scrapped (present tense). The first EK 380s that could be scrapped at the end of the 12 year business plan would be around 2017, I think.

      • There are plenty of 747 up to 12 years old that are stored or scrapped.
        Even 777-200LR have gone to the chainsaw. usually its the engines that are worth more than the airframe by then , so once they are taken off its parted out for the body.

          • So they are paid for by US-Aid then 😉
            Another “tax equivalent” gift then.

            Apropos 3 customers 2 frames : do they “timeshare” ?

  6. If nothing else, Mr. Aboulafia has been consistent. In a point:counterpoint discussion with Philip Lawrence in 2006 he made the same arguments and his forecast for VLA sales/deliveries/growth have been pretty accurate.

    http://www.scribd.com/doc/59460706/A380-Description#scribd

    The discussion can still be downloaded here I believe. In 2000, Airbus forecast 12oo + VLA deliveries by 2020. It appears more likely that the number will be a around half that (including 747-400s, 8i, and 8f in the total)

    If you examine the 380 order and delivery book it is certainly of concern. They have 317 orders, 153 deliveries. That leaves 164 orders, 28 options. Of these, the following orders and options are suspect to some degree or another.
    Air Austral 2
    Air France 2 options
    Amadeo 20
    BA 7 options
    Unidentified 10
    Lufthansa 2
    Qantas 8 4 options
    Transaero 4
    Virgin 6 6 options

    So that leaves 164-52 orders (112 orders) and 28-19 options (9 options) as solid. That is 4 years of 30 a year, with little in the way of sales in the last several years (in fact negative hits to the order book (Skymark, Unidentified, Biz jet)

    If a neo is launched, then would ceo orders be deferred? What does the effect of used ceos do to the market? Emirates can junk them or return them to their lessors who will have to find a home or take any $ consequences, but can other airlines afford to do so?

    I don’t think that Mr. Aboulafia is always right, but he has a pretty reasonable argument that the 380 business case is not strong…

    • I want just to precise that the unitendified customer is ex: Hong Kong Airlines. The order is perhap not “officially” cancelled because Hong Kong Airlines don’t want to pay penalities and is working to find an alternative client.

      • Hong Kong airlines is a part of the Hanian Group. Since the order was placed for Hong Kong airlines and and it’s cancelled, it can “technically” be replaced with another airline under the Hanian Group umbrella. Problem is none of the other airlines could fill an A380. So it will just float until it sinks.

        When are not going to hear about ANA ordering the A380

    • people like Mr. Aboulafia imho fill a different role in the US system than traditionally elsewhere.
      Assessments are never ever neutral. The capital of good reputation demands that it be leveraged for opinion making.
      If you can preselect the fact giving phase turning of opinions is much easier.
      Pronounced examples come from the political arena where “filter nodes” were introduced in the information gathering path to only pass the “right” information ( Bush43 Admin )
      or invent core events from whole cloth ( https://en.wikipedia.org/wiki/Nayirah_%28testimony%29 )

      A practice that obviously clashes with other cultures.

  7. As I said earlier I see follow up orders for BA, LH, SQ, QR, EK in the next few years and new orders the likes of Turkish, ANA, LATAM and United.

    Each of these will be followed by outcries of political pressure, prestige, misguidance and should not even be included in the backlog analyses. From a predicable part of the world.

    It is very well possible those have deeper insights and wisdom on their side. Or not & just can never accept proven wrong in the past.

  8. No Mr. Aboulafia is not right. He predicted the end of the hubs to justify the end of VLAs, we see more and bigger hubs. He says Emirates should be put off the equation, but he does not mention that without Emirates other airlines would have ordered more A380s, maybe even more than Emirates.

    • I believe that Mr. Aboulafia feels that the Point to Point model will be more influential than the Hub to Hub model. Regardless of which model is more accurate, it is clear that there have been few new 380 orders.

      The 777x also has not had a huge number of orders, but it is still 6 years away from delivery slots. You can get a 380 much quicker than that (Skymark, BBJ white tails, Hong Kong orders, Amadeo) likely with favorable financing (Amadeo). Instead, orders are being pushed back or Emirates is stepping forward to take slots that haven’t been sold (Amadeo). Can things change in the future? Sure. The story is not over. But is it a smart business decision to invest more money in the 380? I mean, where is Emirates going to get a 380 ceo competitor… there isn’t one.

      The 777x has been purchased by European, Asian, and Middle Eastern airlines. Time will tell if it will sell to other airlines, but the list Keesje provided of 380 potential orders could easily encompass a list of 777x orders.

      • That is why I wrote the “beached whale” meme will wear off.
        But it will take time.
        It was applied with vast funds and the interested parties obviously are still at it. This is a war of fantasies versus realities. Fantasies can only live until they clash destructively with realities.

  9. To be fair to Mr Aboulafia, his predictions of A380 market demand have been far more accurate than most. See Source 21 of this Wikipedia article for his 2006 view:

    http://en.wikipedia.org/wiki/Airbus_A380

    So far, he’s not been far of the mark.

    In the long run, the market will decide A380 program success. To date, demand has been under-whelming.

    • I share the opinion of Tim Clark when he says that it would require a new generation of airline managers to make the A380 work. If you design the right network around it, it can be a cash machine. Today’s managers are too cautious, too conservative, not ready for step changes to face the next gen airlines. That’s why so many network airlines will go bankrupt.

      • You get your orders with the management you have, not the management you want.

  10. The A380 design is there, the production is in place, the gates are in place around the world. What’s the premium for a neo over a ceo where the fuel savings over lifespan work out, 20 million, I don’t know.

    How much more per unit to produce 20 per year versus 30 per year?
    Is this a big deal?

    • I don’t know exactly, but what we know is that Airbus is losing money by producing at a rate of 25/year, so the lost would be even more important at a productio rate of 20/year.

      • Meaning, the economic inflection point between shutting down the line and cancelling all orders versus continuing is between 25 and 30?

        What are the bare production costs of aircraft excluding design and development, A320-40m A330-70m A380-100m, or something like that. Is there a list somewhere?

      • The necessary production rate may be related to deals with subcontractor. I don’t know for sure how long this deals will last. Many contractors may swap old deals for NEO deals.

        It would be interesting to get the exact phrase about the necessary production rate you “cited”.

        Finally the 747-8 production is around 15 aircraft per year with a backlog of just 35 aircraft and only 119 sold at all. The end is foreseeable – Air Force Last (same for 767). The 777X is not quite the same size and not available before 2020.

        • The 747-8 is already in a “reach-forward loss” position, meaning that Boeing estimated that the production of the aircraft will never be profitable…

          • Yep, so is the A380. Different accounting, same thing. Never made money, NEO won’t make money, making the 900 won’t make money.

  11. Richard Aboulafia was one of the authors of a quasi scientic report trying to burry the A380, the Gellman report in 2002.

    https://s3-eu-west-1.amazonaws.com/rbi-blogs/wp-content/uploads/mt/flightglobalweb/blogs/flightblogger/050416-shadow.pdf

    It is a 100 page study trying to prove the A380 would never be profitable. It was hailed / used by US politics and industry lonbyists to fight Airbus/ demand subsidies and tax cuts.

    The credibility of the report and its conclusions were somewhat compromised after it became clear the report and its authors were paid directly by Boeing.

    I see the anti A380 lobby, with its strongly nationalistic undertone, as hitting the wall in slow motion. Because it takes many years to witness the A380 is pk and here to stay. With or without its old opponents kicking and screaming in denial.

    • As I wrote in my reply to RationalObserver up-thread, one of the other co-authors of that infamous Shadow Critical Project Appraisal: The A380 Program — George W. Hamlin — recently wrote a similar viewpoint piece over at AW&ST. Again, highly predictable. Like his fellow co-author, Richard Aboulafia, he also doesn’t want to see an A380neo. Interestingly enough, during the last year there have been quite a few hit pieces on the A380 at AW&ST. Perhaps that would seem to indicate that quite a few people are already worried about the advent of an A380neo.

      http://aviationweek.com/advanced-machines-aerospace-manufacturing/viewpoint-airbus-a380neo-makes-no-sense

  12. Airbus will do the A380NEO but RR will pay for it. It provides a launch platform for Advance. GE will make sure RR don’t get to launch Advance on a Boeing. Even 150 frames just for EK will be 600 engines and an okay starting point for RR. I expect other versions of the same engine on A350-1100 and A330NEO replacement, so end market is thousands of engines. More than enough to make sense, for RR.

    The reason for EKs position as the big A380 operator is the A380, they have used its capacity, and above all its popularity, to wipe out the competition. If somebody’s predictions of LANTAM eventually buying them the US operators will be nearly reduced to domestic airlines in the next 20 years. What are they’re load factors where they compete with A380s? UA have gone from 744s to 772s to 788s on Australian routes. 737-7 MAX super LR anyone? (joke, maybe)

    • huh, so we are retrofitting the A330NEO already? Hmm, each engine program cost how much?

      How soon does RR go but making limited market engines?

      • Hmm, didn’t he say “A330NEO replacement”?

        That could be an A350 derived frame, right?

        • I don’t know what will replace the A330NEO but I RB211/Trent engines are nearing the end, so I don’t expect the A330NEO Trent to last too long. My point is RR must launch Trent’s replacement soon or be side-lined. Unlike P+W they don’t have a narrow body entrant and they can’t afford to be side-lined, the cost of getting market share back will be too much. So they need a platform to launch Advance, and the only available platforms on the horizon are A380Neo or A350-1100. But I suspect Airbus might have the “1100” on the backburner now in light of the lack of 777X orders over the last 12 months, (unless EK/QR want to order 200) so RR don’t have any option but to get Airbus to NEO the A380, and pay for most of it.

          • RR claims they make the best Turbines in the World……but overall World-Wide demand prefers P&W or GE. RR has failed on every launch…….Thrust and Fuel burn rates are always higher than the competition. A Revamped A330/A380 with evolved RR power will be another Con……..and then Airbus/Rolls will cry foul….because they don’t have the Superior engineering of GE or P&W….not to mention……..Rolls always has issues delivering Launch or in-Production Series Engines on time and on budget. Who can forget the L-1011,747s, 757s powered with RR……….Engines were severely overweight compared to the competition,burned more fuel and put out less thrust. The Modern Trent is an evolution of the RB211 design that continues to Fail.

  13. ps, I assume that the offer of 748s to EK recently reported was by GECAS? I guess they have most to gain (400 GEn-2s) and most to lose. (RR advance launch)

    • Why do you think Airbus chose the then new CF6 as the Launch engine for the A300? Then, they knew if they had chosen RR RB211, Airbus would have imploded and never recovered. The CF6 Core evolved into the Current GenX Series.

      Even with or without GE influence in financing……it’s the better engine……….it’s why Airbus has been begging and on its knees for the A380/A350/revamped A330 (even before either was introduced). GE/P&W engines are cheaper on the wallet in service,maintenance,repair than any RR power-plant.

  14. To be fair to Aboulafia I would classify him more as pro-America than pro-Boeing. He is a patriot, very much like KC135topboom.(Whatever has happened to him)?
    The ROI on A380 may not be great, but will the 787 even reach break even?
    Last figure was – $30bn. going forward. The A380 losses were written off as they happened and happen, so whatever Airbus lose this year on A380 production will be reflected in this years accounts.
    I frankly shudder at the Boeing method of accounting.

    • Boeing ( and US ) method of accounting allows a lot of fixed costs to be written off ( ie appear in books) only once last plane is built. Thats why the 767 has been bumping along for last 10 years.( last year only 6 deliveries)
      This is why 747-8 will stay for longer than expected

      • It’s known as Capitalized Depreciation which is marked down from taxes owed.

        With Wall Street (The Gamblers) always wanting the net-return in the Right Now perspective, 747-8 future is definitely strained as shutting it down in a few years time will net many Billions of Dollars……….but for only 1 fiscal year.

        Boeing made a huge mistake by not just idling the 757 program down…….now they don’t know what to do as their will be plenty of punters for the Long Range A320s/A321s……. Wall Street’s short sighted viewpoint is slowly eviscerating Boeing and Boeing allows it too happen by caving-in.

        When all the assets are leveraged-out………..even the best laid-out Ponzi Scheme/s Implodes

    • Don’t know what happened to him here, but he is active on Twitter @kctopboom

    • Many of the previous blogs point the A380 is a lost cause for Airbus – something I disagree with.

      While many seem all to ready to point out Airbus’s ROI problem for the A380, nobody seems mention the Boeing’s problem with the 787. Check out this link
      http://ii-sl.org/ii-sl/Learning_Curves_in_MPM.html

      Boeing first introduced to smooth out costs and revenues of the B777 back in the 1990’s so they could “average’ the B777 costs over the entire B777’s initial production run of 400 aircraft, and they have continued this practice with the B787 Dreamliner.

      For Boeing “program accounting” works by allowing them to establish projected profit margin up front, say 10% for the entire program. This number, which is continuously updated, is based on Boeing’s estimates of the average costs and revenues over the remainder of the program. Every quarter, the “profit” the company reports is based on these projected averages, rather than its actual costs or revenues. The whole system is built on faith that Boeing can come up with accurate long-term forecasts.

      To a degree unmatched in nearly any other industry, Boeing’s disclosures are based on their own estimates. I believe the Boeing present management are now abusing the priviledge the US Government has granted them in order to bulster the short term profits and share price on which senior managagemnt’s bonuses are calculated.

      The International Institute for Strategic Leadership (IISL) has been tracking the 787 learning curves generated from Boeing’s quarterly financial reports since 2009. The question is not when but if the airplane programme will break even during it’s production run of 3,000 to 4,000 airplanes. a detailed analysis can be found here:
      http://ii-sl.org/ii-sl/Learning_Curves_in_MPM.html

      Is history repeating itself? – remembering the role “managed earnings (AKA project accounting)” played in the demise of Douglas Aircraft company in the mid 1960s.
      Below are extracts from T.A. Heppenheimer’s book ‘A Brief History of Flight’:-
      “For decades Douglas Aircraft had followed the conservative practice of writing off development costs of new aircraft as they were incurred, accounting for them as expenses charged against current receipts. In 1963, amid the company’s reforms , it acquired a new financial offier, A. V. Leslie. He took the view that this standard practice produced big cuts in profits during development phases, along with artificially inflated jumps once cash from sales began to roll in. Managed Earning, by contrast, would delay reporting these expenses. It would treat them instead as part of the production costs, charging them pro rata against each DC9 to come of the line.

      The downside was that if the company reported a loss, the true loss might be considerably worse. Soon Lesie’s new practice, combined with stubbornly high labour costs, brought bad news. McGowen (Douglas CEO) had planned for an average loss of $1.15 million on each of the first twenty aircraft. This was normal: he expected the first planes would be quite costly to build but that manufacturing costs would drop as the program advanced down the learning curve. After twenty airplanes, the loss would drop to $400,000 on each plane, and prosperity would be just around the corner.

      It didn’t happen, Losses on the first twenty produced $10 million more red ink than McGowen had anticipated. And even after delivering more than fifty planes, each new one was bringing a further loss of $600,000. This meant that profitability lay somewhere off in the distant future. It would be very difficult to bring down costs, through the learning curve, to where the company could recoup its losses by means of sales volume.”

      To me the above ‘Douglas Story’ has many parallelisms to the Boeing 787 situation of today. By adopting program accounting Boeing has effectively mortgaged its future development.

      Boeing is a $US90B company but to have $US30B outstanding in deferred B787 costs is going to hurt. The B787 program has not only hurt Boeing but also its key suppliers. Check out the Spirit Aerosystems SEC filings. Like Boeing Spirit also use program accounting but they are now in a forward loss situation with their B787 program. An interesting question is “If Spirit Aerosystems find themselves in a forward loss situation regarding the B787, is Boeing and how would that affect their future?

      While I believe Boeing today is in a much healthier state (current and projected cash flows) than Douglas Aircraft was in the mid sixties I am still surprised by bullish sentiment expressed by so many on Wall Street, but things could change – on the 6th Nov 2014 Seattle Times did point out:-

      The market interpreted negatively the news that deferred production costs on the 787 Dreamliner had climbed by $947?million in the quarter to a cumulative $25.2 billion.
      (This amount, which is spread out over 1,300 planes for accounting purposes, is based solely on money spent building the airplanes. It does not include the one-time 787 development costs, which analysts have estimated at upward of $15 billion.)

      The total deferred costs are still keep climbing and may for a few more quarters until Boeing reaches the point where the money it’s paid for delivering a 787 is more than the money spent on building the jet.

      In a teleconference call with analysts, Boeing Chief Financial Officer Greg Smith — who a year ago raised the anticipated peak of this cumulative total from $20?billion to “slightly over $25?billion” — was asked if this figure might in fact climb higher by another $1 billion or $2 billion as costs continue to accrue.

      Smith’s response — that he didn’t see the ongoing additional 787 deferred costs climbing by $2 billion — certainly left wide open the possibility of the number reaching $26 billion.

      The second negative for the market was that management projected future cash flow increasing at a rate lower than expected.

      “Where’s the cash?” was the headline on an investor note from Rob Stallard, an analyst with RBC Capital Markets.

      “The lack of cash in 3Q, and only a modest change to the operating cash guidance for the year, are likely to disappoint,” Stallard wrote.

  15. And last but not least (though repeat)

    All those A380CEO get deferred because the NEO looms out there, so it goes into a holding pattern which gets defered because the 900 is looming out there. All but Emirates as most ops can’t make it work (Tim Clark is disingenuous, there is only 1 Emirates with all that oil backing and one Dubai hub in the world.

    United ain’t buying it by the way.

    And to make one thing clear, I would be fine if the A380 succeeds, lot of angst with how its been done, but succeed, cool. I just don’t think there is a business case for it.

    Political and ego case yes, business not, but business is not business anymore anyway, its all pork and graft and welfare so what the hey.

    I think Airbus will do the NEO, 900 not so sure, but a business success, no, just like Concorde, an nice employment machine despite what it cost to make that so.

    • With comments like “United ain’t buying it by the way” one wonders whose “political and ego case” is at play. Clearly not just the Europeans.

      • Most “accessments” directed at Airbus and Airbus products are “proactive Jingoism”.
        Quite noteworthy that with so much effort directed at this market share has grown to its current size.

      • “With comments like “United ain’t buying it by the way” one wonders whose “political and ego case” is at play. Clearly not just the Europeans.”

        American operators have determined the A380 does not work for them.

        that does not mean Emirate, Quants etc may have routes into the US they feel work.

  16. To succeed, the a380 has to be used on consistently high traffic trunk routes, because it costs more to purchase and fly (capital, 4 engines, fees etc). This is most effective in slot restricted airports such as LHR, Frankfurt, Singapore. The US airlines do not have that situation as they have diffuse hub systems and even slot restricted airports (eg. JFK/ORD) have options nearby (Newark, LGA/Midway). So, United, Delta, and American are unlikely to buy the 380. (Certainly not Southwest!)

    Emirates has a unique mega hub position between Europe and Asia, hence it can use the 380 effectively. People fly in, change, and fly out. Works great.

    The problem (for legacy airlines like BA/AF/Qantas/ANA/JAL etc) is what do you do when there is the (inevitable) seasonal or economic decrease in traffic? Then you have less flexibility in moving a 380 around your system and then you can lose money from your large capital investment in a 380

    The safer bet is/has been large twins. Most people fly by price and schedule. For those who can afford it, First and Business Class are not that much different in a twin versus quad. It’s not like you are spending a week on the Queen Mary going across the Atlantic, it’s usually < 10 hours for most flights. Taking a nap, the scenery looks the same in any plane…

    Heck if you have real money, you charter…

    • When United, Delta, and American etc. fly into slot restricted airports such as “HR, Frankfurt, Singapore”their outbound capacity will be limited.
      Checking population growth stats around the superhubs indicate that this will be growing problem and if the US carriers don’t field the required lift capacity they will continue to lose market share.

    • Midway, for TATL flights? Surely you jest?

      And ALL of the NYC airspace is constrained, three different airports helps but the aircraft still need to stay out of each other’s way.

  17. Love it or hate it the A380 is here. It’s apparent from a number of commentators here that for whatever reason many hate it, perhaps for no other reason than it’s an Airbus product. Strangely the passenger verdict is absent here.

    Be that as it may I’m about to embark on my seventeenth A380 trip to Australasia albeit in business. Those of us who fly long haul for an arduous for twenty odd hours appreciate the cabin quietness, space offered and being more refreshed on disembarkation. something that any current quad or large twin just can’t match.

    The business community and even the less informed economy traveller have latched onto the benefits 380 offers, with more demanding flyers the 380 is actively supported by travel agents as the preferred long haul flying medium, walking the decks & cabins on my flights invariably I struggle to see a vacant seat in economy with business always stuffed to the gunnels.

    Criticise or bash it at will, I suggest you fly it before you do. Without a doubt those of us who demand quality flying long haul it’s the first choice, nothing comes close.

    • Inform me with the number of times that you have flown the A380 as revenue generating passenger, non business related?? It’s easy to say that the A380 is the best thing since the cotton gin but you’re not paying for this trip so you’re point is invalid. Ideally you’re going to say that its grand and opulent with roses cascading from the cockpit, you’re not paying for the fare. Question. If there is a $3,500 difference in fare between a 789 and a A380, same destination, same seat class, where do you stand? We all have a price and while I don’t know you personally, at some thresh hold you will either choose to pay more for showers, a bar in the back or pay less to not have access to a bar or showers with less financial impact on your wallet. If the A388 leaves you refreshed after a long flight, so does the 787.

      • If there is a $3,500 difference in fare between a 789 and a A380, same destination, same seat class, where do you stand?

        Yeah, and where do you stand if the price difference goes exactly the other way?
        Slightly silly to be working with such exaggerated numbers, I think.

        But I’ll take your point and will chime in:
        I’ve flown on A380s a few times at this point, on EK and MH. Two A380 flights for business and four for pleasure. I recently almost another two holiday flights to that list.
        In not a single instance was the A380 flight more than €100 dearer than the next cheaper option would have been. In two cases, the A380 flight was actually the cheapest option available.
        As for “you don’t pay business flights” – no, you don’t. But a lot of businesses these days control travel cost quite tightly (I know my former employer did, anyway, despite being not exactly the smallest fish in the pond). Those business flights on A380s would have been on other equipment if they had cost significantly more.

        Finally, you wonder why those two additional A380 flights didn’t get added to the list: Nothing to do with price (A380 was within €50 of the flight we actually chose), but with the fact that the option we went with had better connection times; that and the fact I hadn’t flown on SU before 😉

      • “Question. If there is a $3,500 difference in fare between a 789 and a A380, same destination, same seat class, where do you stand? ”

        – Lovely. So if the A380 operator is able to continue selling the seats with such a hefty premium against their competitors, they’re making some serious money!

        But first, I would appreciate it if you would pull up some examples…

        • Did a dummy booking, LHR-SYD return, same June dates. Lowest Business fares:

          EK A380 – GBP 3263.45
          BA 777 – GBP 4165.06

          I know who I’d fly with.

      • rotate ….

        Being retired I have to spend carefully.

        I choose to fly the EK A380 from AKL/MAN (UK) and AKL/BNE(AUS) every time. EK with the A380 ususally offer better service, a cheaper fare than say ANZ (B777, B787).

        Note I have flown Business and Economy and know of several people that like myself will arrange their travel to fly in the A380 rather than the alternatives. I also note on the times I have flown the A380 it has always been packed.

        The A380 has more space, is quieter that its competitors. offers

        • A work acquaintance recently had to fly Auckland-Aruba. His employer made him go via the Sydney to DFW A380 service as the much shorter Auckland-Aruba via San Francisco route on ANZs B772s was $500 more expensive.

      • Re Rotate:
        Inform me with the number of times that you have flown the A380 as revenue generating passenger, non business related??

        Your comment is irrelevant

        It’s easy to say that the A380 is the best thing since the cotton gin but you’re not paying for this trip so you’re point is invalid.

        It matters not one iota who pays for my transportation.

        If there is a $3,500 difference in fare between a 789 and a A380, same destination, same seat class, where do you stand?

        A380 flights do not carry surcharges. The cost differential you site would in some instances cover a business return LHR to SYD trip.

        As I suggested you might consider flying the type.

  18. If it was me, I would take the lowest cost regardless.

    If it happened to be an A380 that would be fine.

    If it happened to be a Super Cub, I would live with that.

    I have slept in some really bad places, any seat on an aircraft beats that. I unkink when I get where I am going.

    But then no one is paying for my trip so yes it does make a difference.

    The company I worked for paid my way to the Philippines and back, 2/3 was max dense searing and I survived. For whatever reasons I got 1st class back form Japan, damned nice, but I was not paying for it and would not have.

    • I don’t think the airline really cares who’s paying,just as long as someone is. I have only ever traveled at lowest possible cost,but I don’t think I could take many hours sitting in the middle of 11 abreast in an A380

      • Wasn’t 5 in a row a long common standard for the 777 with 2-5-2 seating?

        • Yes, but 5 abreast in the middle on a 777 is much better because it’s a TWIN. 😛

  19. It has long been communicated that passengers don’t really mind what aircraft they fly and how small the seat space is. It doesn’t really influence their booking behavior.

    Now we have to ask ourselves, has something changed during the last decade. Do you e.g. check websites before you go to a restaurant, buy a TV, book a hotel? Will the new generation of business travelers do so? Will new apps, rankings and trip advisers chime in?

    I think we all know the answer. And we also know some hardware manufactures and airlines have a lot to loose in this respect. And will put up a fight to misinform, confuse, discredit, embed, compromise and generalize in the smartest ways they can.

    http://www.tripadvisor.com/Airlines

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