Go Back  PPRuNe Forums > PPRuNe Worldwide > Middle East
Reload this Page >

Airbus Considers Shutting Down A380 Production Line

Middle East Many expats still flying in Knoteetingham. Regional issues can be discussed here.

Airbus Considers Shutting Down A380 Production Line

Old 10th Dec 2014, 22:07
  #1 (permalink)  
Thread Starter
 
Join Date: Feb 2008
Location: SFO
Age: 45
Posts: 70
Likes: 0
Received 0 Likes on 0 Posts
Airbus Considers Shutting Down A380 Production Line

Airbus Raises Prospect of Ditching A380 as Orders Vanish - Bloomberg


Airbus Raises Prospect of Ditching A380 as Orders Vanish
By Andrea Rothman - Dec 10, 2014
Airbus Group NV (AIR) raised the prospect of discontinuing its A380 superjumbo as soon as 2018, the first admission that it may have misjudged the market for the double-decker after failing to find a single airline buyer this year.

While Airbus will break even on the plane in 2015, 2016 and 2017, that outlook doesn’t hold for 2018, forcing the company to either offer new engines to make the A380 more attractive or discontinue the program, Chief Financial Officer Harald Wilhelm told investors at a meeting in London today.

His comments come as 2014 shapes up to be the first since the doubledecker entered service without a new airline customer. Its only buyer was a leasing company that has yet to line up a single carrier to take any of the 20 planes it ordered. The backlog remains as thin as it is fragile, highlighted by the cancellation of six jets ordered by Japan’s Skymark Airlines Inc. (9204), with two close to handover.

Jumbo Jets

In its seventh year in operation, the aircraft that cost $25 billion to develop threatens to become a costly misstep. While popular with travelers, most carriers prefer smaller twin-jet models that are more fuel efficient and can access more airports. Emirates is the only stand-out sponsor, having ordered 140 units, while other airlines have either backed off or are struggling to fill the two decks of the jumbo.

Order Boom

“It’s an excellent plane but it only works for the right destinations,” said Air France-KLM (AF) Group Chief Executive Officer Alexandre de Juniac, who aims to cancel the last two of a dozen A380s on ordered and swap them for smaller models.

Chris Buckley, Airbus’s Executive Vice President, Europe, Asia and Pacific, said the company has been “at fault” in the way it marketed the aircraft, letting carriers customise the interiors in whatever way rather than pushing the high-density credentials of the double-decker.

The four-engine wide-body airliner is a rarity, after Airbus killed its A340. Boeing Co. (BA) said yesterday that it will cut back production of its 747 jumbo.

Emirates President Tim Clark is pushing Airbus to upgrade the A380’s engines to improve fuel efficiency, a move Airbus is resisting because the cost of doing so doesn’t match demand for the plane. Keeping the plane unchanged may mean running down the backlog and eventually shutting down production, now at just under 30 a year, analysts said.

‘A Pity’

“Airbus will be obliged to make a decision one way or the other in 2015,” said Yan Derocles, an analyst at Oddo Securities in Paris, who estimates an engine upgrade may cost Airbus 2 billion euros ($2.47 billion) because of work required on the wing.

An engine upgrade would take about four years, according to Derocles. The A380 now comes with a choice of engines either by Rolls-Royce Holdings Plc (RR/) or a joint venture between General Electric Co. (GE) and United Technologies Corp.’s Pratt & Whitney.

The A380’s lackluster demand contrasts with a boom in orders for other models. Airbus’s bestseller remains its A320 family of single-aisle jets, which it made even more popular by offering new engines. The same concept added momentum to the A330 wide-body jet.

The all-new A350, a twin-engine long-range wide-body plane made of advanced light-weigh materials, has almost 800 orders before its first handover.

‘A Pity’

Airbus has won orders for 318 of the jumbos. That’s a fraction of the 1,200 it thought airlines needed in that size category when it started marketing in 2000. Emirates accounts for 40 percent of the order book, while airlines including Virgin Atlantic Airways Ltd., Hong Kong Aviation and Air Austral are increasingly unlikely to ever take their planes.

Japan and China, originally seen by Airbus as key markets for the A380, have been disappointments, with only one Chinese airline taking 5 units. Boeing’s 747-8i, the only rival, has fared even worse, winning 51 orders from four airlines.

“It’s a pity,” Clark, the Emirates president, said of the A380 “It’s a very big cash generator for us. I just open the doors and the people come.”

Emirates has been successful with its fleet of A380s because the airline uses its Dubai hub as a central point from where to connect major routes around the globe with just one stop. The A380 is also popular on capacity-restricted airports such as London Heathrow, while many smaller airfields lack the infrastructure to accommodate the plane.

Richard Aboulafia, vice president at the Teal Group and longtime critic of the plane, said the new large twin-engine planes coming to the market will be the death of the A380.

“I don’t think it lasts more than a few years into the next decade,” he said of the A380. “The quicker they let go, the quicker they can devote themselves to marketing efforts on other products.”

To contact the reporter on this story: Andrea Rothman in Toulouse at [email protected]

To contact the editors responsible for this story: Benedikt Kammel at [email protected] Christopher Jasper
JuniorMan is offline  
Old 10th Dec 2014, 22:52
  #2 (permalink)  
 
Join Date: Sep 2011
Location: earth
Posts: 1,098
Likes: 0
Received 0 Likes on 0 Posts
.... and the delivery of the first A350 to the little moron in Qatar is deferred, with no date set! Airbus shares plunge 11% ....

Concerning the 4-legged dinosaurs, i predicted this all along. Timmy can open as many doors as he wants, people will come, but will not pay what's needed to get the predicted profit. Fuel's cheap, thanks, but it might go up to a 100 again and then brace for our T&C's!

While the 380 might suit EK, when it's the only and exotic zoo flying a dinosaur, it will be difficult to uphold the cash cow myth. Creative accounting is easy in a dictatorship, but some day even they will face some internal prosecution.

If Airbus discontinues the A380 line, it would be a smart move to cancel the remaining orders and saddle some new horses.
glofish is offline  
Old 11th Dec 2014, 00:01
  #3 (permalink)  
 
Join Date: Apr 2001
Location: overthere
Posts: 3,037
Received 17 Likes on 9 Posts
Did someone earlier mention they have the number to truck masters? I might need that.

The don
donpizmeov is offline  
Old 11th Dec 2014, 03:33
  #4 (permalink)  
 
Join Date: Jun 2001
Location: Boldly going where no split infinitive has gone before..
Posts: 4,783
Received 44 Likes on 20 Posts
It makes money for Emirates, but I wonder what the subsidy per airframe the European tax payer will pay to allow that to happen in the final analysis?

I also wonder how EK will go having built it's entire model based on a fleet that was obviousy a white elephant as far as the manufacturer goes, when it's no longer available?
Wizofoz is offline  
Old 11th Dec 2014, 04:54
  #5 (permalink)  
 
Join Date: Nov 2003
Location: Terra Firma
Posts: 441
Likes: 0
Received 0 Likes on 0 Posts
To any future new hires thinking about coming to EK, if you end up on the A380 then you will be without a current (other airline) type on your license that will be useful to you when you wish to move on, and you will.

This could increase the speed on this ship that is heading towards the iceberg and it is already too late to be avoided I am sure.

jack
jack schidt is offline  
Old 11th Dec 2014, 06:09
  #6 (permalink)  
 
Join Date: Oct 2004
Location: Dubai
Posts: 322
Likes: 0
Received 0 Likes on 0 Posts
TC "I just open the doors and the people come in"

Such a team leader.
Kamelchaser is offline  
Old 11th Dec 2014, 06:11
  #7 (permalink)  
 
Join Date: Oct 2014
Location: Subzero
Posts: 39
Likes: 0
Received 0 Likes on 0 Posts
Pity. It's one of the best aircaft to travel in. Far better than the T7.
Mainly because it's very quiet.
Tim made his bed, but there is a fair chance he will fall out of it.
The big question for EK, where do old dinosaurs go to rest?
ManaAdaSistem is offline  
Old 11th Dec 2014, 06:29
  #8 (permalink)  
 
Join Date: Sep 2002
Location: Europe
Posts: 288
Likes: 0
Received 0 Likes on 0 Posts
A380 pilots are now tied even more closely with EK but I see it as a good news for EK commercial.
Everyone agrees that A380 is excellent product on the right routes so EK will have exclusivity to utilize that. Also the pax who love A380 will choose EK more frequently...
littlejet is offline  
Old 11th Dec 2014, 06:41
  #9 (permalink)  
 
Join Date: Oct 2014
Location: Subzero
Posts: 39
Likes: 0
Received 0 Likes on 0 Posts
Very few passengers book flights based on the aircraft type. Price/brand/service/time is another matter.
On a normal day there is very little difference in price between QR, EK, EY and on some routes, WY.
When there is a campain going, QR beats everybody. They got a hand up on service as well.
ManaAdaSistem is offline  
Old 11th Dec 2014, 07:21
  #10 (permalink)  
 
Join Date: May 2007
Location: france
Posts: 106
Likes: 0
Received 0 Likes on 0 Posts
I am on the 380, yes it's a shame if you airbus shut down the program, but the world econimc crisis hasn't hel.

About the 380 TR :
I am much happier with a 380 TR on my licence than a 777 one!!

If for any reasons I get fired or want to leave I would have flown 330/340/380 with Ek, It's a question of few thousands euros in toulouse to get any airbus TR back on my license with a CCQ courses...
What a 777 F/O will do...fly a 777 probably in china! Or 787 nightmare some in china!

I have with the 380 TR the possibility in a short notice to fly :
318/319/320/321/330/340/350/380 and with a extremely short notice the 350 (5 days course)

Hallas....
lfrk is offline  
Old 11th Dec 2014, 07:41
  #11 (permalink)  
 
Join Date: Dec 2006
Location: KUL
Posts: 431
Likes: 0
Received 0 Likes on 0 Posts
Just the opening of the negotiation dance.
EK needs the 380 NEO to sustain its business model.
Airbus lets EK know that this won't come cheap.
My bet is on the 380 NEO and a significant EK order some time next year.

After all the 747 went through similar commercial ups and downs early in its career.
MrMachfivepointfive is offline  
Old 11th Dec 2014, 09:11
  #12 (permalink)  
 
Join Date: Oct 2004
Location: AUH
Posts: 28
Likes: 0
Received 0 Likes on 0 Posts
Someone upset Timbo

PERTH, Australia, Dec. 11, 2014 /PRNewswire/ --

-- Chief of the world's largest international airline slams airlines for not using A380 correctly --

Airbus A380 a winner

The chief of the world's largest airline has criticized airlines for not buying more A380 super jumbo's as Airbus hints at closing the production line down in 2018.

Responding to a Bloomberg report about Airbus CFO, Harald Wilhelm, telling investors in London on Wednesday that Airbus is considering closing the A380 line because of a lack of orders, Emirates President Sir Tim Clark warned that with air travel due to double in the next ten years to 7 billion passengers, airlines and airports will need giant jets like the 517 seat A380.

"The A380 is a passenger magnet. We operate five a day from Dubai to London's Heathrow and they are 95 per cent full," Mr Clark told Airlineratings.com in an exclusive interview.

"Airlines are too conservative and have not put the right interiors into their A380s."

"Some of the interiors are a disgrace and used 1970s thinking," Mr Clark told Airlineratings.com.

"We put all our premium seats on the upper deck and economy on the main deck, but others have mixed them which is inefficient."

"Our competitors laughed at us when we put showers and a lounge in the A380."

"But passengers love the showers and the lounge."

"The A380 is a great aircraft. If airlines don't believe they can fill an A380 then their business model is wrong," said Mr Clark.

"Their marketing is all wrong."

Emirates has 55 A380s in service with orders for a further 85. However sales to other airlines have almost dried up.

Airbus is considering an upgrade of the A380 -called the A380neo- with new engines and aerodynamic improvements.

Mr Clark said the new model, if built, will have excellent economics, as good as the Boeing 777X that Boeing will introduce in 2018.

"And we will buy 140 of the A380neos" Mr Clark told Airlineratings.com.

"As long as I am around I am going to continue to fight the battle for the A380."

"This is a great aircraft and the world needs it."

A380 Virtual tour: Major Airline News - AirlineRatings.com

About AirlineRatings.com
AirlineRatings was launched in June 2013 and rates the safety and in flight product of 450 airlines using its unique seven-star rating system. It has been used by millions of passengers from 232 countries and has become the industry standard for safety and product rating. Its safety rating system is endorsed by the International Civil Aviation Organization.

For more information, contact:
AirlineRatings.com Editor-in-Chief Geoffrey Thomas
+61 41 793 6610 (24/7)
Email: [email protected]


SOURCE AirlineRatings
Mysalami is offline  
Old 11th Dec 2014, 09:26
  #13 (permalink)  
 
Join Date: Mar 2004
Location: universe
Posts: 564
Likes: 0
Received 0 Likes on 0 Posts
TC obviously concerned that airports will stop investing in 380 infrastructure and limit his ability to deploy the dinosaur.
vfenext is offline  
Old 11th Dec 2014, 10:23
  #14 (permalink)  
 
Join Date: Sep 2005
Location: Post-Pit and Lovin' It.
Posts: 863
Likes: 0
Received 0 Likes on 0 Posts
About the 380 TR :
I am much happier with a 380 TR on my licence than a 777 one!!

If for any reasons I get fired or want to leave I would have flown 330/340/380 with Ek, It's a question of few thousands euros in toulouse to get any airbus TR back on my license with a CCQ courses...
What a 777 F/O will do...fly a 777 probably in china! Or 787 nightmare some in china!

I have with the 380 TR the possibility in a short notice to fly :
318/319/320/321/330/340/350/380 and with a extremely short notice the 350 (5 days course)
Errr...time to take a course in basic logic?

-Where do you think those "318/319/320/321/330/340/350/380" jobs will be? Hint: same place as the Boeing jobs. (And uh, doubtful you'll be taking a 380 DEC job. Anywhere. Ever.)

-Why do you single out B777 F/O's? Contracts for Airbus F/O's will be subject to the same issues as any other. Who would be foolish enough to take anything other than a DEC contract anyway, on any fleet? This is why command is the only reason to join EK. And now that it's slowwwwwwed right down, that reason is gone.

-How is having to re-do a TR, no matter how supposedly inexpensive or quick, an advantage over not having to do one? (If a few thousand Euros is nothing to you - can I have yours?)

It's fine to be proud of whatever the hell is stamped on your license, even aggressively so, but your reasoning is bizarre.

Me, I just think it's great that Tim Clark is smarter than everyone else in aviation. Else EK might have cause for concern. But if he says everything is hunky-dory, then it must be so. He's a knight and all.
nolimitholdem is offline  
Old 11th Dec 2014, 12:21
  #15 (permalink)  
 
Join Date: May 2007
Location: france
Posts: 106
Likes: 0
Received 0 Likes on 0 Posts
Basic logic ??
Any airbus TR + CCQ's = lots of different airbus types from small to big
B777 + ccq's = 2 types

I don't find myself agressif.
Few thousands euros... if you get fired and didn't spent your money is some stupid cars, it's close to nothing to find a new job.

Anyway I think my resonning is good, but you don't need to agree.

Hallas
lfrk is offline  
Old 11th Dec 2014, 12:58
  #16 (permalink)  
 
Join Date: Jan 2003
Location: Eternal Beach
Posts: 1,086
Received 0 Likes on 0 Posts
I got mentioned?

Spealling not rekuireed.

halas
halas is offline  
Old 11th Dec 2014, 14:36
  #17 (permalink)  
 
Join Date: Jul 2000
Location: Dublin
Posts: 71
Likes: 0
Received 0 Likes on 0 Posts
For the sake of clarity and balance, the Airbus CEO has made a statement to clarify the CFO's remarks:

“We are fully booked for the next three years, where is the problem?”. Bregier went as far as saying that Airbus “will one day launch an A380neo and we will one day launch an A380 stretch.” He asked investors to not be “impatient.”

The CFO's comment seams to have suggested either a A380neo or project cancellation.. it could be that he is a proponent of the NEO option??
General Dogsbody is offline  
Old 11th Dec 2014, 15:49
  #18 (permalink)  
 
Join Date: Apr 2006
Location: uk
Posts: 416
Likes: 0
Received 0 Likes on 0 Posts
For the sake of clarity and balance, the Airbus CEO has made a statement


Or in other words, trying to limit the damage from the previous statement is another way of looking at this.


I personally couldn't give a fig what the truth is just as long as the Whales, we have and are getting, make money.
alwayzinit is offline  
Old 11th Dec 2014, 18:30
  #19 (permalink)  
 
Join Date: Apr 2006
Location: In the seat
Posts: 284
Likes: 0
Received 0 Likes on 0 Posts
IFRK,

FYI, A380 to A320, you'll have to do the full course, no CCQ - go figure, that's exactly what I thought!!!
kingpost is offline  
Old 11th Dec 2014, 19:39
  #20 (permalink)  
 
Join Date: Jun 2007
Location: i'm in the parking lot
Posts: 249
Likes: 0
Received 0 Likes on 0 Posts
Just read in the local paper today EK is refitting some 380's to 2-class??


Gulf news or the other one, can't remember which
The Turtle is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.