Leeham News and Analysis
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Leeham News and Analysis
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- Pontifications: Boeing “transparency”–not so much. April 9, 2024
- Airbus charges and write-offs since 1999: more than €33bn April 8, 2024
IAG is looking at leasing used A380s
By Bjorn Fehrm
18 January 2016, ©. Leeham Co in Dublin: Willie Walsh, the CEO of IAG (which is the holding of Brittish Airways, IBERIA, Vueling and Air Lingus) spoke at the Growth Frontiers 2016 conference in Dublin about how the new IAG has become more agile in following market changes to opportunistically increase its operational efficiency.
Walsh gave the example of IAG’s aircraft fleets where he announced that it is looking to lease five to six used Airbus A380s in addition to the ones that British Airways (BA) already have on order. These could be aircraft for BA only use but also for a joint BA and IBERIA operation.
Walsh spoke about the A380 as he was speaking about the transformation that had taken place at the different operating companies in the IAG group. As an example of successful changes in their operating practices, he took the examples from their fleet strategy and started with the A380.
It is a “fanstastic aircraft when you can fill it” Walsh said, but it is inflexible. It only works at certain segments of your network where you can fill it and where frequency is not of prime importance. But when it fits, it brings “fantastic results. Not only could we lower cost by flying two A380s instead of three Boeing 747s between London Heathrow and Los Angeles or one A380 and one Boeing 777 to Washington instead of three 777s, but we also gained a precious Heathrow slots in each of those changes”.
“So the A380 works extremely well for us and we are prepared to increase our fleet beyond the 12 we are planning to get. But the options we have for A380s are expensive. We will instead do something unusual for BA,” he said. “We will go for used aircraft and lease them. It shows how BA has changed; we are prepared to adapt to a changing market and to take opportunities that come our way.”
Walsh said that “another opportunity we also look at is leasing 777-300ERs. We brought the 777-300ER late into our fleet, actually too late. It is a very effective and flexible aircraft. We now see that we could need more and once again we are prepared to lease these. Again something that the old BA would not do.
“A final example of how we react to changes in the market is the question of the A340-600 in IBERA’s fleet. These are really good aircraft for IBERIA’s South American destinations,” he said. “But it is not a great aircraft with fuel at $120 a barrel. At $60 or below it is a very attractive aircraft, so while we might have planned to replace it at a certain time previously, we now see no reason to look into changing that aircraft as long as the fuel price stays at the present low levels.”
Long live the A340!
Long live the A380
?
Long Live Pan American Airlines (sigh)
Very interesting case in the federal court over the Lockerbie crash in 1988 watch this space as I know what really happened to Pan Am 103 N739 PA.
As he puts duct tape on his mouth as he knows Scott will smack him if he says something sarcastic here.
DFT
A very successful plane. THAI Airways got rid of their planes very fast 🙂
So
A380 inflexible but marvelous
777-300ER flexible and marvelous
a340-600 marvelous when cheap oil (< 60 $ that is twice more than today's price)
One of the big question of the year is now answered : there's a life for 2nd hand A380… even at tier one operators !
Nice !
Bonne journée
Yes but the same tier one operator is leasing 2nd hand A380 and 777-300ER?? Not quite what the OEM’s might have had in mind. Certainly not BA anyway!
Walsh did not say he was leasing used -300ERs.
Iberia A380??? I’m not sure what routes can only dream…
From Madrid , the busiest routes ( and thus for Iberia) are Buenos Aries and JFK
I don’t see BA taking used aircraft, because they never do. Don’t know why they don’t, other airlines do.
Early on BA communicated didn’t need A380 at all (Dick Wyatt), then suggested they preferred 747-8i’s, then said few are enough and now they suggest they’ll buy used ones.
Another round of negotiations I guess..
Hmmm, did we not just hear that BA will lease USED A380s and 777-300s?
No we didn’t? I think he is just negotiating Billions with Airbus via the press, just like they did in the past. If you want something & there’s no choice, you start saying you don’t like / need it anyway.
YES he did- its direct quotes.
“We will go for used aircraft and lease them. It shows how BA has changed; we are prepared to adapt to a changing market and to take opportunities that come our way.”
You may THINK its negotiating, but its very strong evidence they are considering a new approach- leasing used aircraft
Keesje:
I will take Walsh at his word unless he is a proven liar like Anderson with Delta. And I do not use that lightly but he purely did lie when he listed what aircraft were under consideration and which were not in what turned into the A330/NEO/and A350 order.
.
Really?
This is what Anderson did say –
“While he does NOT RULE OUT the larger A350 and 787 variants, or the 777, Anderson does call them “a little bit big”. FG 24 June 2014
Its the golden rule, cant deliver cant get the order! ( 350-900, 330-9 )
Its a fruitless journey to be countermanding what CEOs do or dont say.
I guess if I want to comment on a CEO that I detest its allowable here.
I see he is at it again with C series and everyone knows the lesson now so they should avoid it.
I think he is just negotiating Billions with Airbus via the press
Don’t think so. He first mentioned this last year, and BA taking (supposedly) MH’s A380s (as they are available) is a load of Airbus’ mind as well, who can now point other customers to the fact that there’s a second hand market for A380s, as opposed to 2 1/2 Skymark and 4-6 MH A380s sitting there with nobody willing to take them.
They already do on short-haul. Many of the Gatwick Airbus fleet are second hand.
Not really , those A319s had the lease taken over by BA when they bought out bmi.
Walsh actually suggested they would look at used A380s back in May last year. Back then, he still said the decision was a couple of years out, though.
Small minded thinking, if you can’t fill an A380 just steal someone else’s passengers,Emirates style.
if you mean “stole them” by providing better service for less money, then OK.
but don’t be pretending European (and American) airlines aren’t subsidized now, and have been for their entire existence.
all airlines are either directly or indirectly subsidized and competition protected by their home country, either through actual cash/tax incentives or through anticompetitive access rules which prevent open competition (see the Norwegian BS going on right now in the US)
I would say that BA are one of the less assisted national carriers.What I meant agrees with you,why only think in terms of dividing up your existing customers,if you are providing a decent service you should be able to attract some of your competitors passengers. One way to do this is by using a popular and cost effective type of aircraft.
I would say that BA are one of the less assisted national carriers
Well, for starters, they – just like LH – aren’t a national carrier any more. Just the largest airline in their home country.
Yes, national champion might be a better way of putting it. Both they and Virgin still have a degree of clout.
These comments by Mr. Walsh can be interpreted as bad news for Amedeo and its efforts to lease its currently unspoken for 20 A380s. If BA is looking at used, Amedeo may have to dramatically cut its lease rates or bail out entirely if a blue-chip carrier like BA isn’t looking their way to fill out their fleet plans.
Not good.
Anyone that has a logical mind has always pondered how Airbus that can sell directly at a major discount (but hopefully at least breaking even) can’t sell A380s, but Amedeus is going to buy 20 A380s from Airbus (at least at a break even cost) and then make money on them by leasing them?
That’s truly been a Leahy pie in the sky spin (I would not even call it a nice try)
The model only works if there is a big enough demand at a price that works and obviously with the A380 (and 747-8i) that does not exist.
As BA is doing, wait until Emirates puts used one on market and lease them. There will be plenty to go around.
Bloomberg reported “Mark Lapidus, CEO of lessor Amedeo, said in Dublin that his company — which has orders for 20 A380s — is involved with Airbus in as many campaigns to place used superjumbos as for new-aircraft rentals. Pricing is keen and the planemaker is offering engine-style maintenance deals to entice carriers put off by the expense of training people to service a small fleet, he said.”, so it appears Amadeo is not just about the 20 new builds. (http://www.bloomberg.com/news/articles/2016-01-18/iag-could-lease-used-a380s-as-walsh-says-new-aircraft-too-pricey)
The way I interpreted Walsh’s statements was actually that IAG has decided the flexibility of leasing is either important or key to growing A380 operations (ie they are not neotiating in public to try and get a better price on their existing options) and what he is really doing is a bit of negotiating in public a) about whether to go used or new ‘Amadeo’ for the initial 5-6, and b) to try and set the ground rules, prices etc. for future new build Amadeo leases.
I seem to recall that they own a lot of existing aircraft on leases. I seem to remember EK is a big customer? Can anybody help my memory with confirmation?
That is the news Malaysian airlines was waiting for so much. They have the same Trent 900s as BA. So now Malaysian airlines can get rid of the a380s and replace them with the a350s on order. As far as 777-300ERs are concerned Kenya airways and Aeroflot are looking to sell their young 777s fleets. So more opportunities for BA.
Yep, suddenly things looking pretty good for the Airlines.
Smaller Airlines have the same problem with a 777 that the big ones have with the A380, you have to fill it to make it work and only so many (if any) routes in the smaller airlines network that does that.
Compounding problems for Kenya was the Ebola epidemic that while not in that country, was guilt by association with all of Africa that suffered a down turn.
I think Walsh has clearly stated what those of us who are neutral on the A380 have repeatedly stated, It works for some limited markets, not for most.
We don’t hate the A380 (though many of us disagree on the motivation for its creation) but the facts are clear (and you have to ask how well and long Emirates can run them into small markets which seems a desperation move to me, i.e. they have too many and don’t have any place to send them, we will see in a couple of years)
So, Malaysia has a place to send the A380s it can’t use and Emirates has place to move their used A380s to (assuming they want to get something out of them other than parts)
Walsh is clearly saying that at the right price (low) they can use them, at a new aircraft price that returns a profit to Airbus, no.
That also begs the question, what does that do for the A380NEO?
Walsh is clearly saying that at the right price (low) they can use them, at a new aircraft price that returns a profit to Airbus, no.
That’s not what he’s saying, really.
He says he’d like more A380s – but considering that MH’s frames (only 3-4 years old) are available for lease at a fraction of the cost of new-built ones, it’s a no-brainer to get those instead of new ones.
That’s incidentally the same approach he’s using for the 773ER. There are used ones available at good prices and he just thinks it’s common sense to use the oportunity.
Lease for a fraction of the cost of new ones?
Even for new planes they are usually financed by cheap borrowing ( non recourse?) so its usually seen as what the monthly costs are – lease or finance.
The only real difference is that ‘lease’ is seen as shorter time , say 5 years while ‘buy ( with borrowed money) is longer time frame
BA needs VLA’s next to their smaller 777, A350 and 787 aircraft. That’s why they bought >100’s VLA over the last 40 years 🙂
BA have been doing multiple 744s a day for ages to other Hubs and traffic is growing 4-5% per year. A380 bring in “free” LHR slots.
Now BA won’t replace all those with A380’s because the market place has changed. Maybe just 40-50 in the next 20 years.
Keejse: And that means what?
In the US there is a saying, if it flies like a duck, it quacks like a duck, has a bill like a duck and has feet (and or swims) like a duck then its a duck.
Up to this point the market has shown us all of the above, i.e. the duck being the limited routes for an A380 (Emirates aside).
Now we have DNA results that says its a duck. And I do not mean that derisively of the A380, its proven to be a solid technical achievement. its reality is limited, 777 is wider appeal (though the latest version more narrowed)
The disagreement is its current appeal and if it was 10 years too early then Airbus marketing assessment is grossly off (or it was an ego project and should not have seen the light of day). Instead of one successful program (747) we now have two unsuccessful programs.
BA always has and always will need VLA. The question has been which ones and how many and now clearly at what price.
No aircraft mfg can afford to sell at a loss and that is what Mr. Walsh is saying, we can’t afford the A380 as the price you need to get to make a profit. We can afford used ones and lease them which allows us the flexibility to add more or drop them if they are not working out but we can’t afford to be stuck with something long term we bought.
Its the basis of the A330NEO, buy it at a cheap enough price you can compete with the 787.
Huge factor is fuel prices and those have become a much smaller part of the airlines cost hence the super efficient A380 (full) is severely negated.
Quote ” Huge factor is fuel prices and those have become a much smaller part of the airlines cost hence the super efficient A380 (full) is severely negated.”
Do we really expect fuel prices to stay low? How long can this reprieve in oil prices last? Some are talking as if this pricing fad will be permanent or at least last for many years.
The fragile world economy cannot be trusted to keep things on an even keel and what about the wars and terrorism escalating worldwide?
The bubble will break, how soon, anybodies guess.
I think that the bubble has broken.
Oil is an odd commodity, its not what its worth, its what someone thinks its worth. Speculators drove the price up, personally I think at least half the increase was due to them. There was never a shortage (which is supposed to drive prices)
They got out of the market and its sinking fast. $20 could be a reality soon. I am seeing diesel at 25 cents LESS than unleaded when its been 25 cents more (US) commonly since 2008 (even with the bust)
Put that into context, Iran is coming back into the market with a potential 800,000 bbd, Saudi is pumping more to get market share and the US can cut in oil shale any time the prices justify it.
China is moving to natural gas (and an endless supply of that in the world)
The reality is that you could have a gulf war and cut off the flow out of the Gulf and there is enough capacity to pick up the slack (Russia, Venezuela, Libya and the US)
I thought it was maybe a 2 year anomaly, now it looks like at least 5 years and maybe 10 (and a lot of ability to switch to natural gas as a vehicle fuel developed)
Iran beginning to pump oil is more complex than there being umpteen million BPD on the market.
No one actually uses crude oil, it has to be refined. I’m a bit out of touch, but AFAIK Iranian crude is pretty gloopy stuff, needs a particular type of refinery. The only major one anywhere is in Saudi Arabia… Saudi have been using their ownership of that refinery as a way of controlling the Iranian economy for years; they control the supply of diesel, petrol, the things that the Iranian economy depends on.
It was the same with Venezuela – the refineries best able to deal with their oil are in Texas, USA. Yet the government there seemed hell bent on antagonising their only real customer…
Oil politics is not simple!
No, but reports also that Iran had 40% of European Market.
No one has mentioned Saudi Refining theirs, interesting aspect if true but it does not seem like Iran to sit still for that.
Most of Irans oil previously went to East asia, I’m sure it will do the same now. And ‘special’ refining could be sorted out in China in the time it takes to type this, as well as a big push to increase Irans own petro chemicals in the last 15 years.
We have known that IAG has managed to put its A380s to good use and the fact that they will take up more either from Malaysian, Amedeo or elsewhere or new must be good news for the programme. It firms up potential residuals and shows that they can be put to good use.
With oil at $30 I think we are going to see a renaissance of the A380 without the need for NEO. It has been reported over the last week that the A350-1100 has jumped the queue over the A380NEo in terms of development. This give the NEO to use 2023-5 technology and benefit by a 4% reduction in fuel burn as a result making it future proof against the 777x
I could hardly agree more. The currently available engine technology obviously offers too little improvement over the recent engines to justify the investment, especially with the oil price where it is. And with the Iran now starting to produce and sell on a big scale again, it is unlikely to rise soon.
The Airbus management is surely very happy that this new situation has proven their strategy of delaying the redesign of the A380.
Whenever the engine makers prepare the first large engine with geared fan, then we will see Airbus making the step. To me the most interesting question is who that will be. Rolls, GE or Pratt? This might turn into a most amazing competition.
RR are certainly working on it as I’m sure you know. They’re also getting closer to a CF fan, and they’re also talking about a variable pitch fan. That’s three major R&D strands. Imagine what kind of engine would result if they can make all three work?!
P&W have a small engine, but I’ve not heard they have funded ambitions to re-enter the large engine market. I’ve not heard what GE are planning either. They’ve got a lot out of the boring old 2 axle engine design, and they must surely be due for an architectural change to stay in the game.
Anyone able to add detail?
I could not disagree more 0n the impact.
What I see is BA is trolling for low cost lease, used aircraft. Its the only entity that has said that.
If they can’t get the A380 at the price they want Lufthansa has 747-8I going on the market in a few years.
This does not add new orders, it takes up whatever Emirate wants to retire and the ones that MA does not want. It does not add to the order book.
It does make clear the A380NEO is not viable. Good call on Airbus part to drag it out as long as possible (I was once told never make a decision until you have to, new facts can change that at the last minute)
The one item out is how desperate Emirates is in using the A380 in small markets. That one has to play out but I would be looking at load factors not press releases.
Agree there is no engines under development to make A380 NEO worth while but anybody who thinks oil will stay low is overly optimistic. Delta, who are famous bargain shoppers, and the best at predicting oil price that I can think of, bought new tech A330NEO/A350s for a reason.
Well production drops 6%/pa, 1.5mb/day North Sea and a lot of shale needs over 50$/barrel, and cheapest crudes now worth negative. Russia expects there own production to drop 6% this year. AND NO NEW INVESTMENT. So World produces just under 100million bpd, and uses 2 million less, existing wells and uneconomical wells closing due to prices will take 6-7? million bpd off the market, while Iran, Saudi and BP (last project from before the boom still to go on line) will add 2-3? million. World consumption increases 1-1.5 million bpd pa. So a shortfall in production by years end and once stored supplies start to drop the speculators will start.
BA has lost out immensely on routes still operated with 747.4s The kangaroo route I fly like a bus service is almost lost territory with BA’s 747’s They can fill them certainly, but BA’s kangaroo schedules are a shadow of what they once were, current business loyalty has switched to 380 carriers and BA’s regular business class loyalty reflects this.
BA & Willy identify the need to react, his existing product cannot match the upstart gulf competitor A380’s that have taken so much of BA’s thunder from the near, far east and Australasia markets where BA previously reigned.
I’m equally confident this leased capacity won’t leach into Iberia operations but be seen to serve expand existing A380 schedules & compliment current successful A380 destinations.
BA wants warranty new BA standard A380s. Most efficient over 25 years if you can afford. BA knows, Leahy knows. BA wants a discount and its putting on pressure.
If you don’t see, you probably believed they didn’t want them 12 years ago, they preferred 747-8s eight years ago and then they needed just 12, two days ago 😉
And 747-8 would have worked fine for them as well. Not as good as an A380 of course but ……
And the Kangaroo route is how much of the worlds air traffic?
We get you think its a negotiating tactic but other do not think so.
Will see how it plays out. A cheap enough A380 pays for the lack of Warranty (and they will be in well maintained condition other than MA and those I am not sure about)
BA wants warranty new BA standard A380s.
Well, Airbus or Amedeo could probably provide some assistance getting MH’s planes converted to BA standard or at least get cabin differences to a minimum. As I said above – just like Airbus have an interest in selling new A380s, they very much have an interest in used ones that become available finding a new home. A couple of years after the last A340 had been built, Airbus were still very actively trying to place used A340s with operators and market A340s as capable airplanes.
As for warranty – with enterprise products, what you or me would refer to as “warranty” is mostly covered by support contracts which run for a certain time and cover certain things. I really don’t see how an ex-MH A380 that’s covered by an Airbus support contract would be any different to a custom-built BA A380.
Those Amadeo 380 production slots are spoken for :
:Emirates Airline, the world’s largest carrier by international traffic, will receive an additional four A380s in 2016 that aircraft lessor Amedeo had agreed to take”-WSJ jan 20 2015
Normally you need 2 years before delivery to commit to cabin layout and seating.
So instead of Airbus selling direct to Emirates they go through Amadeaus, so there are no new orders as Emirates would have bought them directly instead.
Interesting in that if the wheels fall off the A380 into smaller market wagon Emirate can just not re-fill the lease.
That would of course take Amedeuos into bankruptcy
You misinterpreted the announcement. The delivery slots for 2017 change from one buyer to another, not that Emirates is leasing from Amadeus. They will still have to find leasees, just its further out.
Well it seems from this on Flight Global that those may be other A380 slots and Amadeus still has not been able to place the 20 they are on the hook (or not) for
https://www.flightglobal.com/news/articles/analysis-will-ana-go-large-on-a380-420894/
I’m persuaded by your assertion. They are negotiating the price for their options which big Willie mentioned was too high. Well spotted
BA also wants RR power A380s, that leaves current batch of possible Emirate candidates out (P&W)
I don’t know what MA is powered by?
Doesn’t Emirates own justification for choosing RR for their latest batch suggests that GE powered second hand A380s aren’t going to be so easy to shift?
Am I right in assuming that RR powered ones can benefit from RR’s improvement packages (which is why Emirates are buying RR this time), and will be just a little bit better than the GE ones? GE aren’t doing any more upgrades. Or do other factors (such as hours related performance de-rating) play too dominant a role for PIPs to matter?
Someone else posted that Malaysian’s A380s are RR.
Yes I missed MA being RR so that’s a natural for BA and in the numbers they likely would want.
My belief is that RR not only had nothing over the GP (GE/PW) engine, it actually was less capable and Emirate bought theirs with the GPs.
Then they came out with a pure lie about how much more efficient the RR was over GP is. GP has been working on improvements as well.
The upshot is it is a negotiating tactic to convince Airbus to come out with the NEO as RR is the only company that will commit to it.
GE at least has the sense to realize its not a market for one let alone two and refuse the bait.
Back to The A380 vs 747, barely a market for 1, not for 2, shoot someone in the foot while doing so.
GE is way too smart to throw money at the GP engine if they don’t see a market, and will shift resources accordingly.
RR had no choice but to go all in and make up their little fairy-tale that the Trent 900 was more efficient (it isn’t and hasn’t been). Plus, RR has seen the handwriting on the wall; they are not exactly a cash cow right now and are looking at lean days ahead in trying to beat the best engine maker out there (GE).
GE, if it chose to, could throw piles of cash at the GP to pressurize RR into focusing on a dead-end market. RR is looking to probably divest itself of nuclear power and other markets in the future if they keep having bad financial performance.
http://finance.yahoo.com/news/uk-may-nationalise-rolls-royces-nuclear-submarine-business-122357585–sector.html
Some of us are missing what he, the chief executive of IAG, said —>
“So the A380 works extremely well for us and we are prepared to increase our fleet beyond the 12 we are planning to get. But the options we have for A380s are expensive. We will instead do something unusual for BA,” he said. “We will go for used aircraft and lease them. It shows how BA has changed; we are prepared to adapt to a changing market and to take opportunities that come our way.”
Yes, they used to buy only new but aviation evolves, that s why we dont fly 707’s or DC-6’s for passenger use any longer. The tone of the quote says that he wants to lease used frames from wherever he can. And with SQ close to deciding to keep or dump theirs, the MA frames sitting on the sidelines and EK frames coming off lease soon, things will get interesting soon. I am curious of the expiration dates of those options.
Amedeo? That ship has already started to sail. Those ___ on order staying firm make as much sense as a white crayon.
It would be weird if Singapore dumped theirs and BA leased them. As other posters have suggested, BA might start operating their new A380s to Asia / Australasia. Presumably that’s where Singapore have been operating them. What would make BA certain they can operate them more profitably?
If Singapore do drop their A380s, what would operate in their place? A350? If there’s one thing that the A380 is good at it’s giving passengers a good ride, at least that’s a widely held public perception. Any replacement would have to be at least that good otherwise market share might shrink.
It’s like fine wine – once tasted, you’ll never want to drink cheap nasty plonk ever again… Cram loyal customers used to A380 spaciousness into a 9-across 787, they’re going to notice.
Airlines like to portray that it’s the comfort, the amenities, the youngest fleet but that’s where it ends. If SQ can shove the same passengers onto a A350-1000 through conversions from A359 orders or through ordering the 779, they’ll do it. Airlines, like Mr Wonderful, are only interested in m a k i n g m o n e y, feelings aside. Planes to airlines are just employees and they utilize those employees to make them …… you guessed it, money.
Do you remember the 1st or 5th version of the brochures of the A380? Bars, gyms, showers, lounges, skating rinks etc. Now only one has showers and another offers residences on a handful of its fleet and more airlines are eliminating 1st class. No sense in having 87% load factors consistently when 100% load factors are achievable, regardless of if passengers favor a double decker rather than a 787.
@Rotate
You are talking about the top range stuff that will go. What will remain is an aircraft which is by far the most comfortable to fly in period for both Business and Economy. Space, quiet, ambience, ride etc. Other aircraft do not compare especially not the b787 in economy.
Going east I will always seek out a A380 over B777 as there is no comparison (and over A330/340 but they are less common).
SQ has 5 replacement A380s on order for delivery in 2017. Their comment was that they would most likely drop the oldest 5 frames due to them being significantly less efficient than later frames.
Makes more sense, I do not see Singapore giving up their A380s.
they may not need more but good use of the ones they have.
For them and their route structure , like BA it works. And its an owners market, they can cut a good deal with Airbus, they can get a good lease or they can renew the one they have.
But does this suggest that IAG takes less efficient frames from SQ when they were adamant they wanted tranche 2 aircraft with wing twist etc when they first took the A380. That would be a retrograde step. Without looking at the MH frames later or earlier models?
Probably depends on what routes they want them for and the trade off of getting what they want when they want it.
Someone has the numbers and makes the call, I don’t think we can guess what those are
It looks like Iran will take most of the available second hand A340NGs.
Being able to rapidly deliver a significant number of very capable A340-300s/-500s/-600s to Iran – that are currently in storage – will IMJ help Airbus to a massive and irreversible lead in market share in Iran. Boeing is set to lose, big time, as Iran will not want to play as long as the US (i.e. the “Great Satan”) is still going to enforce a partial embargo on trade with Iran.
So, partly thanks to being able to provide a large number of readily available A340s to Iranian carriers on good leasing terms, Airbus will be getting a head start in the Iranian market – and no with no competition, that is if the US government still chooses to enforce silly sanctions regimes, Airbus should essentially be able to re-fleet Iranian carriers over the next decade – on their own…
Finally, it may looks as if Iran will very likely lease a significant number of A380 in due course – perhaps from Amadeo?
http://www.ibtimes.com/iran-sanctions-lifted-will-it-affect-us-companies-business-2268506
Will have to see who Iran hates more I guess, as I recall the Europeans joined in on the sanctions though probably happy for US to continue to be the great Satan.
Transworld,
we see that you think BA only could use A380 on the Kangaroo route, the A380NEO is not viable, EK is desperately using A380s, it’s a duck, it is an ego project and has bad DNA.
Still you say you consider yourself neutral on the A380. I think most of us would not agree with you on that self assesment.
There an old saying here in Europe that says; if you throw mud, your hands get dirty.
😉
It seems Airbus has decided the 380-neo isn’t viable!?
“…for now”
Similar to BA who previously said they don’t need more A380s. The bit after that which Walsh said but which a lot of people ignored was: “…for now”.
Similar with Airbus and the A380NEO.
They won’t launch it… for now. They’ve said that a ~2025 EIS would make most sense (I concur, given the engine technology expected to be available by then). Hence no launch now.
True, there’s a chance they won’t even launch it, but so far, they’ve been adamant that an A380NEO will come – but not now.
I can also imagine potential A380 costumers see less demand for a NEO-version today because the fuel price won’t offset the higher aircraft price.
Perhaps IAG has been getting so many bad reviews for the 9 abreast configuration in economy class on their 787s that they’ve had a re-think, and would now like to operate more 9 abreast 777s and 10 abreast A380s, and less 787s than originally planned.
As for the agenda-driven A380-bashers – i.e. including those who say they’re “neutral” – they typically hear only what they want to hear.
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https://www.runwaygirlnetwork.com/2015/01/22/opinion-why-i-tell-people-to-avoid-flying-on-a-787/
And if you are lucky to have a free row of 3 for you on the 787, the armrests go up only 45 degrees, therefore you cannot lie down.
Plus the massive entertainment box at the bottom of each seat.
I am disappointed in the comfort of this plane as well
I’m falling in love with 10W 777s lately, when I fly on one they always seem half empty. Maybe I can get he same luck on 787s?
@MartinA
Rather than three seats in the middle, four seats in the middle sure makes for a better bed…. 😉
Too bad Transworld can’t be as unbiased as you!
@Geo
Stating that the A380 was an “ego project” goes to show just how far ignorance has become ingrained in the discourse about how the A380 came into being – which started, btw, with a joint study between Boeing and the Airbus partner companies for a Very Large Commercial Transport (VLCT). Hence, continueing discussing the A380 on such terms, is just a waste of time.
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https://www.flightglobal.com/news/articles/vlct-study-identifies-1000-strong-market-28113/
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Here’s a link to a more detailed insight into what actually occurred in the early 1990s with respect to how Airbus went from joint VLCT studies with Boeing – through the Airbus partner companies – and then, why they, as one company, decided to go for an all new Airbus project instead – the A3XX – which, in a subtle way, was changed to a european-inspired 500 – 550 seat design versus the Boeing-led 600-plus seater design.
Surely, if the A3XX/A380 had been all hubris and an “ego trip/project” from the very beginning, then why did not Airbus follow through with a Boeing-type 600-plus seater design?
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Airbus A380: Superjumbo of the 21st Century
https://goo.gl/x0CVas
OV99: You obviously think that talking means something, other than Boeing trying to delay any move by Airbus into the VLA sector.
And as we can see, for very good reason.
So, as we are within 4 years of 2020 lets look at the numbers of 500 VLA forecast under that discussion.
Total Airbus orders are 319, and a significant number of the remaining 140 are suspect. 40 suspect (more actually, but call it 100 real and settle for a total of 279 by 2020.
Lets not mention that Airbus then kicked the numbers up to 1500 in 20 years.
Boeing has delivered 101 747s, 21 left on the orders and at least 6 of those are removable. Round number 115.
We come up with a total of 394, round it up to 400 if you want and 100 short in a fiercely competitive arena where great deals were struck.
And as the A380 will never serve as a freighter and only had any possibilities with the Air Package Express group (FedEx and UPS) what we have is a lot less by the number of freighters that Boeing sold in 747 (and discount some of the orders based on a smaller market that would not have justifies an A380.
So not we are down to 330 aircraft (70 freighters) which is a far cry from 500 And that ignoring Airbus statement of 1500 in that market (let alone the 600+ they now need to make A380s in to just break even).
So yes it was Airbus who felt inferior to Boeing no matter how well they were doing with the Aircraft they were making who decided that to be king of the Aircraft World they not only needed a BIG aircraft, it had to be MUCH bigger.
As is common in the corporate (or whatever Airbus was at the time) world, marketing then came up with the smoke and mirrors to justify that.
And so we got the A380 that does not sell with a built in capability that can expand to the -900 version that looks to never happen and I think we have the duck (not the aircraft the market created by smoke and mirrors to justify it)
But I am sure that’s just me.
And Boeing is seeing the reality as well, cutting 747 production to 1/2 a month.
How soon does Airbus follow with the A380?
Keesje: It seems we have translation issues.
I think any reasonable observer will tell you that the A380 was an ego project for Airbus of that time. It certainly is no where close to fulfilling the marketing claims. I suppose you could make a case that Airbus marketing is totally inept. 10 years early is now going on 15 years early.
That does not mean its a bad aircraft, its quite a technical achievement. It does mean that we now have two aircraft projects not making money instead of one doing ok. US would say shooting yourself in the foot but also shooting the other guy in the foot.
The duck part refers to the market not the Aircraft.
The DNA evidence says that there is a market, but not at a new aircraft price. If its cheap enough then the load factors are not as critical and its more flexible route wise.
A drag racer is only good for a drag track, it does not do well at all on the highway as it were.
Oh be quiet. It’s clear you are no unbiased observer of aircraft like ov-099!
Oh good, thank you: I would not want to be unbiased in designing photo chopped aircraft that are completely unrealistic financially and functionally that only live in the mind of OV-99
As I have proposed before elsewhere, teh A380 being an INTERMEDIARY industrial product, is worth – as any other similar ptoduct – the equivalent of the Chiffre d’Affaires (sales turn-over ?) it fetches when deployed industrially, here in airline passenger/freight service, over a period of 14 up to 26 months of activity. Let’s calculate : 340 days/year, two flights/day, 525 seat, cabin load factor 82 %, average ticket price 1,200 USD thats :
Lower price = 2 x 340 x 525 x 0.82 x 1,200 $ x 14/12 = 410 M$
Higher price = (ditto) x 26/12 = 761 M$
Conclusion = there’s nothing wrong with the Airbus list price for the A380, Willy Walsh is just trying to pull a nice deal for IAG. He’ll eventually get around to taking on five duzins of those excellent A380 that he admits are swell … Anderson, Kirby, Kelly, Muñoz : better watch your markets !
With oil so cheap, does it not now make sense for the likes of MH to keep their A380s in the same manner as IAG with the A340?
Still have to fill them or others cut you out anyway.
And of interest, Skymark had RR engines, so any additional A380s for them (if they need or want them) would need to be an RR user, seems to leave Emirates out but BA in.
And for those skeptics on the order thing, Wikipedia says there was a secret deal in July of 2015 between ANA and Airbus.
So its obvious the Dec 15 was just their way to get it on the books in 2015 as a sop to Leahy (or more likely they got an even better deal and allowed that to be official date)
When Airbus launched the A380 they saw a demand for 400+ seaters, it just never occurred to them that a B777 would sardine 450+ POB. Nothing wrong with the original assumption, based on tourist class densities 11-12 years ago all that demand which went into B77Ws would have been A380 demand, while all the A333 demand would have been filled by B77Ws, and 787s would have replaced 767s as intended. The question is if the World’s economy starts to pick up will the trend reverse itself. Walsh is sort of hedging his bets.
It is imho noteworthy that exposure to US stockmarkets and/or politics and A380 ownership seem to be in an inverse relationship. i.e. without underhanded pressure from certain interested parties there would have been a lot more A380 sold.
end of Iran sanctions, selling Airbus in Japan, oil price in the drings and actually having to bomb their own spawn (IS) are all indicative of effective power loss.
MY guess would be that there is a good chance of selling more A380 in the future. Those biasing forces in the market are leveling off.
I would say he is being prudent and not stuck with a non flexi le fleet, i.e. if he need sot shift he does not own a fleat (777 and A380) that he can’t get out of.
His job is to keep BA going well.
Think it was always a given BA would take more A380s as the CEO eluded to last year. The decisions around this will be commercial and others will have similar thoughts including Virgin Atlantic who have hinted at used A380s. Their A350-1000 order suggests that taking new A380s is probably now not happening so BA will want to ensure that as many premium passengers transfer to the A380 which is the quietest and comfy aircraft in the sky. The Malaysia aircraft has the same (unusual) configuration of first class on the lower deck so providing the flight entertainment system can fit in with BAs it may be not much more than a lick of paint to bring them into service. Thats if Malaysia and others still want to sell VLAs with oil now at less that $30 which makes no commercial sense…
It may make more commercial sense.
As the percentage of fuel costs goes way down, the percentage of how that affects the aircraft falls. A380 pays when fuel is high, but not low.
If the aircraft simply does not fit your routes then like Thai, it appears to be a bad move.
If it does and you have infrastructure in place long term good.
there was data that Thai got their for less than 150 million, but as we see, both are in deep trouble financially (Thai also has a large number of aircraft parked)
A case where it had bad impact on two airlines that would have been much better served with 777s
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