April 28, 2015: Airbus is celebrating 10 years of its A380 super jumbo.
Just about everybody else is taking pot shots at it.
There’s little doubt the airplane is a masterful achievement. But production miscues delayed the airplane by two years, the market moved on it and when it was envisioned in the late 1990s, the Boeing 777-9 wasn’t.
So 10 years after entry-into-service, and a mere 15 after the program was launched, Airbus faces a crossroads: does it re-engine the airplane on an iffy business case or can it come up with enough Performance Improvement Packages for the airframe and with the engine makers chipping in to give it new life until the market grows into the airplane–if it ever does, say detractors.
Some at Boeing we talked with are rooting for Airbus to take the neo plunge.This would suck up resources and money and make it difficult to do what needs to come next: the Middle of the Market airplane and the replacement for the single-aisle aircraft. These same officials still chortle over the story that Boeing cleverly maneuvered Airbus into launching the A380 program in 2000, sucking up manpower and billions of Euros.
Whether the story is true or not, it’s certainly urban legend. But just think of what would have happened had Airbus foregone the A380 and devoted its money and resources to the rest of the market.
With the A380, Airbus has more than a 50% market share of the Big Two. With the A380, Airbus outsold Boeing and until recently out-delivered Boeing. Just imagine what the Duopoly would have looked like had Airbus taken a different path: would Boeing, aided and abetted by its self-inflicted wounds, been reduced to a 40% market share instead of hovering in the high 40s, essentially being even-up with Airbus?
Would Airbus have dominated the twin-aisle sector all these years instead of just the most recent few?
It’s a testament to Boeing’s own arrogance, failed strategy and ineptitude that, having claimed it tricked Airbus into the A380, Boeing didn’t run away with the market on the back of the A380.
Airbus maneuvered Boeing into re-engining the 737 instead of proceeding with a new small airplane–and Boeing’s market share in the single-aisle sector suffers for it.
Airbus now has the A330neo, which is off to a good start with 145 orders–but sales have somewhat stalled. Economics that come within 2%-3% (by our numbers) of the 787-8/9, it costs a lot less and it’s available a lot earlier. Will it get the 1,200-1,500 sales Airbus and Steven Udvar-Hazy, CEO of Air Lease Corp. and a launch customer, predict? We doubt it–more like 400-500, we think. But for the $2bn it costs to develop (with Rolls-Royce picking up most of the tab), the ROI is easy and a expense a mere pittance to the 787 and its high technology that even top Boeing execs now say airlines aren’t willing to pay for.
The A380 has all but run the 747-8 out of the market. As poor as sales of the A380 have been, it has around 90% of the Very Large Aircraft Passenger airplane sector. Boeing launched the 747-8 to remain competitive with the A380, and it was years late, billions over budget and sales virtually non-existent for the VLAP. Another large forward loss is likely.
Maybe those same Boeing officials who chortle about tricking Airbus into the A380 should take a look at their company’s own decision about the 747-8.
Perhaps Airbus will have the last laugh after all.