A380 Production Sadness

[Himeno]

They were friends once, probably still fly them....

It appears so. Iran is using the 6 oldest 747s in service (with the next oldest in active use owned by the USAF)

 

[straitman]

It appears so. Iran is using the 6 oldest 747s in service (with the next oldest in active use owned by the USAF)

I suspect there would be quite a difference in maintenance standards between the USAF a/c and the Iranian a/c.

 

[Scarlett]

I suspect there would be quite a difference in maintenance standards between the USAF a/c and the Iranian a/c.

The main difference would surely have been long term access to spares. Given how long Iran has been out of favour, I don’t see them having received any spares for a long while.

Are any of the 6 still flying?

 

[UP4014]

Was thinking about the 380 situation and hindsight is great as we all know.

Airbus probably shouldn't have gone for the largest end of the market unless other sales relied on having this type to facilitate them, but stuck to all the rest of their offerings. More big aircraft sales aren't happening the way Airbus saw it.

Everyone who wants one has got one and I don't think they are at break even point yet are they?

Perhaps someone can update me on that.

 

[TomVexille]

The main difference would surely have been long term access to spares. Given how long Iran has been out of favour, I don’t see them having received any spares for a long while.

Are any of the 6 still flying?

I don't think so, but they do have a mix of 737s and 777s on order

 

[Himeno]

The main difference would surely have been long term access to spares. Given how long Iran has been out of favour, I don’t see them having received any spares for a long while.

Are any of the 6 still flying?

The internet has them listed as "active" as opposed to "scrapped" or "stored", so as far as anyone knows they are. I guess they are getting black market parts?

 

[UP4014]

The internet has them listed as "active" as opposed to "scrapped" or "stored", so as far as anyone knows they are. I guess they are getting black market parts?

Bogus parts, regular airlines get caught out with them so I woulf think Iran can easily put their hands on some bogus non OEM bits.

Matt

 

[harvyk]

Was thinking about the 380 situation and hindsight is great as we all know.

Airbus probably shouldn't have gone for the largest end of the market unless other sales relied on having this type to facilitate them, but stuck to all the rest of their offerings. More big aircraft sales aren't happening the way Airbus saw it.

Everyone who wants one has got one and I don't think they are at break even point yet are they?

Perhaps someone can update me on that.

The issue is that the A3XX project which became the A380 started in 1994. Bigger planes was still the in thing, the B777 hadn't yet taken it's first flight, and at that stage the B747 very much so ruled the sky's. So the desire to build an aircraft which would beat the B747 at it's own game was very much at forefront of mind. Back then the idea of a few flights a day or even a week between destinations was still acceptable, so one could argue that everything was right to make an A380 type aircraft. Of course designing and building an aircraft is not an instant thing, it takes at least a decade to go from initial concept to first flight, and in the business world, a decade is a long time.

A range of factors happened in the 2000's which changed flying, one of them is people started demanding a choice of time, not just day, we want airlines offering us a departs every 30 minute service, and we wanted direct services. None of those things are really compatible with a very large aircraft. Couple that with building an aircraft for premium airlines, with no end of airliner life strategy and you're not onto a winner.

 

[UP4014]

Aircraft building is about predicting the future I agree, Airbus however by the time they got the 380 in the air the winds had changed.

It's no more than a business decision that was poor, but reading up there are some big egos out in airplane land.

Matt

 

[Legoman]

Interesting article about the first retired A380.

The first Airbus superjumbo to exit service will be stored minus its engines at a French airfieldas its owner seeks a new operator for a plane that while still relatively young in industry terms has fallen out of favour with airlines.

SQ used to pay $1.7M USD/month to lease this one A380.

What I thought was interesting about that article was the admission that Airbus haven't taken an order for a single new A380 since 2015 and they admit there is no established market for second hand planes either. The fact that virtually nothing from A380's is backwards compatible with any other aircraft type is another nail in the coffin. As the planes come off lease, their only future use is looking more & more like being parts donors for the remaining A380's still in service and on lease. What a sad end. Very quickly the parts availability will outnumber the planes still flying needing those parts and the prices will fall through the floor hastening even further the demise of production at Toulouse+partners. If will be an ever quickening end to the planes' flying life.

Maybe those massive Trent engines can have a second life as portable base load electricity generators for rural areas to get some useful life out of them post aircraft use.

 

[straitman]

The following is part of an AW&ST article that I subscribe to. AW&ST is highly regarded in the Aviation world.


Airbus’ A380 Dilemma: Kill It Or Keep Bleeding?
Airbus still believes a large Emirates order can rescue the A380, but long-term success is doubtful
Nov 17, 2017Jens Flottau | Aviation Week & Space Technology


Be there at 12:15, they were told. Sheikh Ahmad bin Saeed Al Makhtoum, the chairman of Emirates, would walk in and sit down for a few words and contract signatures. Sheikh Mohammed bin Rashid Al Makhtoum, prime minister and vice president of the United Arab Emirates, would be in the front row, lending the event more gravitas. The Airbus team looked forward to it as a welcome end to months of intense negotiations and a ray of hope for its embattled A380 program.

But when the Airbus staff arrived at the Dubai Airshow conference room, they found their counterparts from Boeing, who had been given the same instructions. It was an awkward situation, but the mood was good, the usual jokes were exchanged, and pictures were taken of an event to be remembered.

Finally, after nearly an hour, Ahmad walked in and sat down—with Boeing Commercial Aircraft President and CEO Kevin McAllister. They signed a surprise order for 40 Boeing 787-10s and took a few questions. Then, suddenly, the sheikh was gone. It was only then that it dawned on many in the room that there would be no A380 order.

And so what was expected to be a spotlighted agreement between long-time business partners turned into an unprecedented public humiliation. Airbus executives canceled all subsequent planned public appearances at the air show, except for the announcement of the big Indigo Partners A320neo family order later in the week. No interviews were allowed. And an event that is typically a display of confidence became the stage for disaster, a public rift between Airbus and one of its most important customers that has overshadowed what little hope was left for the A380 program.

Emirates itself had raised the expectation that it would sign another A380 order at the show. A week earlier, the two parties had celebrated the delivery of the 100th aircraft to the airline with a big party in Hamburg, and Ahmad had said he was hopeful a further A380 deal would come through. About 40 more aircraft were rumored to be under discussion, but that was considered a possible understatement because Emirates was involved. Now, after the clash and the parallel loss of a big A350 campaign, does Airbus have a path back to promise for the programs?

Some argue that it would be better for both Airbus and Emirates not to look for such a path. But this would mean ending the A380 program after delivery of the remaining aircraft to Emirates and any other customers with existing orders that still want the aircraft. And it would force Emirates to rethink its fleet plans and focus on the next-biggest modern widebody available, the Boeing 777-9, which it has ordered in large quantities. Of course, Boeing would be happy to sell it more.

A number of factors support the argument on the Airbus side. All of the company’s own A380 research and development money has been spent. And as long as the program is unprofitable, Airbus does not have to pay back the repayable launch investment (RLI) it received from the governments of its home countries: Germany, France, the UK and Spain. That would be a nice problem to have, but it is far off: Airbus loses money on every A380 it builds because production costs are higher than the sales revenue, and that will remain the case for many years, even if Emirates and Airbus come to an agreement for a follow-on order.



Emirates unexpectedly walked away from an anticipated Airbus A380 order at the Dubai Airshow. Credit: Dubai Airports


An Emirates order for more A380s would secure production at very low—and therefore unprofitable—production rates. The program’s losses are only growing with each aircraft delivered, and the program relies on a single customer.

Emirates is just emerging from a tough period in which almost unprecedented weakness in its core markets coupled with a fall in yields pushed profits into a steep fall. In the first half of its current 2017-18 fiscal year, the airline reversed the profitability trend again by limiting its capacity expansion to 2%, a historic low. It also parked 12 older Boeing 777s to reduce its exposure. Emirates could address its problems by operating a fleet of at most 142 A380s (taking into account retirements) and transitioning to the 777-9 as the backbone of its hub. With the 777-9, the airline would have more than 100 fewer seats to fill on every flight compared to the A380, it could better control yields and fly to destinations that are out of the question for a 517-seat aircraft.

However, Airbus is not ready to pull the plug on the A380. This is partly because it still has to build at least 42 more for Emirates between now and 2022, and there is an official backlog of 100 aircraft. The larger hurdle is a psychological one: Airbus would have to admit that the giant project has been a giant mistake. Instead, the manufacturer maintains that it just needs to hang in there until demand increases as world air traffic grows.

Airbus is not acknowledging that the more A380s it sells to Emirates, the harder it becomes for others to buy them because so much traffic is already sucked into the Dubai hub. In the past, Airbus was glad to sell as many A380s as possible to Emirates. But in hindsight and with a broader market view, that may not have been so clever. All indications are that it is too late for other airlines to order more A380s.

Meanwhile, Emirates Airline President Tim Clark says reducing average aircraft size is not a possiblity. “If you start compressing, the hub implodes,” he says. Instead, he asserts that using a large and growing fleet of A380s “creates huge flows across the network.”

While both Airbus and Emirates hope they can still pull off a deal, in spite of ruffled feathers and hurt egos contractual issues must be solved, too. “The undertakings Airbus will have to make is that the line will continue for 10-15 years and that a further commitment [by Emirates] would not be at risk,” Clark says. The government of Dubai needs absolute certainty that Airbus will continue building the A380 for that time frame before it commits to a further order.

“The ownership [of Emirates] is well aware of the dearth of orders,” Clark says. Airbus wants Emirates to take delivery of aircraft across the entire time line of guaranteed production years. Depending on the size of Emirates’ order, that would leave Airbus with open production slots each year over an extended period of time. Nonetheless, Clark argues that the current Emirates order makes sure “the program is sustained until the middle of the next decade anyway.”

Emirates has 100 A380s in operation and 42 more on firm order. Clark did not say how many additional aircraft the airline may buy. Some reports suggest the number could be around 40.

Airbus’ total A380 backlog now stands at 100 aircraft, but most of the non-Emirates orders are no longer expected to materialize. It is reducing output to 12 aircraft a year in 2018 and eight in 2019 and wants to keep production at seven or eight aircraft per year for several years, until demand for the type from other airlines could pick up and the rate could be increased. Airbus has made a profit on a recurring-cost basis at a rate of 15 aircraft per year and is trying to drive breakeven down further. But it concedes that production will be unprofitable at a rate of eight or fewer aircraft per year.

 

[moa999]

Interesting article and while I can understand the media may have been surprised by the announcement, I would be very surprised if senior Airbus management were so publicly blindsided.

 

[Daver6]

If Airbus decided to can A380 production, do we think this would breath some life into demand for 748s?

 

[basso]

The issue is that the A3XX project which became the A380 started in 1994. Bigger planes was still the in thing, the B777 hadn't yet taken it's first flight, and at that stage the B747 very much so ruled the sky's. So the desire to build an aircraft which would beat the B747 at it's own game was very much at forefront of mind. Back then the idea of a few flights a day or even a week between destinations was still acceptable, so one could argue that everything was right to make an A380 type aircraft. Of course designing and building an aircraft is not an instant thing, it takes at least a decade to go from initial concept to first flight, and in the business world, a decade is a long time.

A range of factors happened in the 2000's which changed flying, one of them is people started demanding a choice of time, not just day, we want airlines offering us a departs every 30 minute service, and we wanted direct services. None of those things are really compatible with a very large aircraft. Couple that with building an aircraft for premium airlines, with no end of airliner life strategy and you're not onto a winner.

I don't think it was so much that - it was more the rise of the big twins, with the superior economics that won the day.

 

[cove]

When Qantas ignored my written question about the book values of their 12 A380s I decided to sell the investment shares into their share buy back. Fuel prices started to rise too so I am happy to have completed that buy and sell.

 

[juddles]

If Airbus decided to can A380 production, do we think this would breath some life into demand for 748s?

No.
The point to point philosophy and twin-engine economics are the main issues. The 747's have no advantage over the A380 in that regard.

 

[harvyk]

If Airbus decided to can A380 production, do we think this would breath some life into demand for 748s?

No, it was the B777 which was the B747 killer. Boeing hasn’t really had any major runs on the board with the pax version of the B747 since the late 90’s.

Now with the B787 becoming the choice of the long haul fleets, I foresee a time when we’re having these sorts of discussions around the B777 as well.

 

[moa999]

The 747s are even more dead.

 

[Himeno]

Everyone who may have wanted more 747s got A380s or 77Ws instead.
Very few airlines got the 747-8i, which Boeing made to market vs the A380. They have gotten good sales with the 747-8F, but the pax version is all but dead.

 

[Legoman]

The 747s are even more dead.

Quick, better tell UPS, FedEx and DHL this! I am yet to see a single A380 freighter. Still see heaps of windowless 747s though.