By Bjorn Fehrm
January 23, 2017, ©. Leeham Co: The Airbus A380 was introduced as the flagship aircraft for an airline’s fleet. Legacy carriers with a large long-haul network introduced the aircraft on the routes with the most traffic in the network. After an initial rush of inductions, only Emirates continued to buy the aircraft in larger numbers. The aircraft had become too large for the airlines which sought frequency over capacity at their hub airports.
Airbus and its leasing partner, Amedeo, are convinced the aircraft will have a second spring when airport congestion has grown in the next decade. Until then, both are seeking the market niches that will keep production at minimum one aircraft per month.
We sat with Amedeo’s CEO, Mark Lapidus, at the Air Finance Journal conference in Dublin to find out what market will require a new or used A380. Lapidus has spent the last two years in meetings with the world’s major airlines, discussing all aspects of operating an A380. He presented some surprises.
When the A380 entered the market, some major airlines were keen to add the A380 to their fleet. The flagship role meant that the aircraft was built with lavish interiors, resulting in configurations such as Lufthansa’s 488 seats to Korean Airlines’ 407 seats.
As fuel prices went up and long-haul got more competitive, the complaints started. The A380 was expensive to operate, some said. No wonder, when you operate it at 80% of its capacity, answered Airbus. The seat installations were allowed to occupy more area in the A380 than in any other aircraft.
There was one operator who understood how to use the areas of the aircraft correctly: Emirates Airline. It installed showers, but more importantly, a real bar on the upper deck. The bar was present in every video clip around the aircraft and in every marketing action.
It showed happy business travelers killing the long hours of the trip with fellow passengers, sipping a drink. Emirates’ President, Tim Clark, admitted the shower could have been left out but the bar was the best Emirates ever did.
“You show me the business traveler who doesn’t picture himself spending hours in this bar when he book his Emirates flight,” says Clark. “It was the best we ever did. Whatever we do to increase seats on the A380, the bar stays.”
Lapidus’ Amedeo leasing company is alone in having an order for 20 A380s. None is placed so far.
“It’s not the problem people make of it,” Lapidus says. “We are the prime sale/leaseback company for Airbus for the A380. We are OK. Sale/leasebacks keep us busy, but what we really want to do is help Airbus to break the jinx around the A380.
“We have got smarter. Emirates showed the way. The A380 is a non-normal aircraft and it should be used in a non-normal way, in a disruptive way,” says Lapidus.
“Airbus and we have marketed it to non-disruptive airlines. Take the big three in the US. They are the most conservative airlines there are. For them, it’s all about ‘no extra capacity, no changes. We are happy, as are our shareholders. Don’t rock the boat!’” says Lapidus.
Lapidus finds more traction with those that already think outside the box, such as those that left the comfort zone and started LLCs. First, LCCs for short-haul, now long-haul. Airlines like AirAsia and Norwegian.
“ANA will use their A380 for leisure mass travel, as will Malaysian Airlines (up to 700 seats),” remarks Lapidus.
“This is where I expect things to happen,” says Lapidus. “The issue of operating a few A380s in a fleet is solved. ANA will operate three. No problem with today’s aircraft and engines paid by the hour,” he says.
“There are other nuts to crack. The airport handling must work and what do you do when 600 passengers get stranded by the odd tech-stop? But the LLC guy’s attitude is: We have solved larger problems, or we wouldn’t be here, ” says Lapidus. “The mainlines roll their eyes and say, ‘it’s too complicated.’
“It has gone so far that I understand that US legacy carriers would rather want the A380 to go away. Then Emirates would not have access to its sharpest passenger weapon, the idea of hanging with others in the A380 Sky bar,” says Lapidus.
“The US fight against the Gulf carriers is also a fight against the A380 in that market. We no longer focus on the conservative, we focus on those that are used to take risks, the LCCs.”