A380 to be discontinued?

[KenV]

Looking at departures from Heathrow today show something like 2,700 seats going to Amsterdam on 20 flights. using 5 or 6 A380 on this route would please the environmental lobby no end.

This may come as shock, but "the environmental lobby" has no influence on airplane sales. zero, nada, bupkis. And operating a huge airplane like the A380 on such a short range city pair as London-Amsterdam would be highly inefficient and a quick way to lose lots and lots of money.

Departures to Frankfurt show similar numbers so using A380s on both these routes would mean something like 10 movements per day between them, compared to the current 36.
Flights to New York by BA alone today will have something like 2900 seats on 11 flights. That could be reduced to 7 A380 flights.
And so it goes on.

Do you see what you did here? You looked at just a small handful of city pairs. Yes, the A380 is wonderful for a few handfuls of city pairs, but for the great majority of city pairs, its simply too much airplane. Too much as in it can't operate from the vast majority of airports and too much as in there aren't enough passengers to fill such a large plane even assuming it could land there.

Second, you fail to recognize that there are multiple airlines serving the vast majority of city pairs. One simply cannot assume, as you did, that one airline will get a monopoly on certain city pairs and be able to reduce the number of flights. There is competition for almost every city pair and airlines have great difficulty filling an airplane the size of the A380.

As for governments "limiting movement numbers" that seems highly doubtful. Further, governments "pushing airlines into operating fewer services carrying the same number of passengers" is also highly doubtful considering that most airlines operating into and out of any given nation are foreign owned and controlled. And even if the governments magically made this happen it would happen for only a small handful of airports.

[Towerman]

I don't think Airbus can afford to discontinue the A380. They - as well as their shareholders have too much at stake. Residual values would suffer, secondary market would evaporate, Amedeo (who have 20 on order) may cancel. Rolls Royce shares would take a dive - all in all there is too much interest vested - oh, and I almost forgot to mention Emirates' fleet size and potential 100 + order. What bothers me though is that an A380 NEO would cost a lot to develop - and that is Airbus' big headache.

[KenV]

I don't think Airbus can afford to discontinue the A380.

Airbus has sold zero A380s this year. If they sell the same number the following year (or even just sell them in single digits), Airbus could not even hope to continue production.

Rolls Royce shares would take a dive

Really? Why? The A380 engine market is a small niche market, with no other aircraft using the engines used on the A380. And within that small market, most of the A380's do not even use RR engines.

[KenV]

"As I said above, it will come down to decree. And we all know the EU trumps national governments."

Good luck with that. Not even the defunct Soviet Union had that level of control and power over the market place.

[Capetonian]

Anyway, if the airlines can operate 20 flights profitably then why can they not profitably carry the same number of passengers in fewer aircraft?

Because it equates to reduced frequency = less flexibility, and particularly at the high yield end of the market, that's a problem.

[ironbutt57]

how big was the Euro-"loan" they received to develop and bring to fruition the 380? (was there one?) and do they include paying this back when they mention "breaking even" with the program?

[ATC Watcher]

2 things : When the A380 was launched , in addition to economics, there was also a strategic vision to take Boeing head on in the juicy top end ( i.e 747) market. I remember the main argument at the time was "offering a full range of aircraft from 100 to 1000 seats " The Political will was not to leave the US alone in that segment. That part worked very well.

Second, I was told the A380 was not developped for the European and US market but mainly for the hubs in Asia and in the Gulf. The " failure" now if you can call it that way, is that the Asians did not bite (yet) . But the show is not over , the fat lady(ies) did not sing yet.

[Booglebox]

I reckon that when early A380s start to be returned to lessors around 2020, we're going to see a massive drop in value, resulting in a situation just like the A340 where mid-life perfectly good A340s are worth ~20% of their original purchase price.
Lessors will see this and not buy any more. THAT is what will kill the A380.

[DaveReidUK]

resulting in a situation just like the A340

A340s plummeted in value because they could be replaced by more efficient twins like the 777-300ER.

What are operators who return their A380s to lessors going to replace them with?

[KelvinD]

KenV:

Do you see what you did here? You looked at just a small handful of city pairs.

Yes, of course I saw what I did there. I chose a couple of high density routes out of Heathrow on that day. I was certainly not going to analyse the entire globe's traffic. And of course, I chose a couple of high density routes. What would be the point in choosing low density routes?

Second, you fail to recognize that there are multiple airlines serving the vast majority of city pairs

And? I didn't suggest that a single airline would take over these routes. I could have said the LHR-AMS route has 12 KLM flights and 8 BA so KLM could fly 4 and BA 3 (or something like that) but I didn't.
I realise that the arguments put by others are logical but then, neither the environmental lobby nor the EU are always logical!
And you certainly don't understand the almost dictatorial role of the EU! Trust me when I say the EU trumps national governments in most things. And pollution is one of those things. If the EU one day decrees that aircraft movements will have to be tailored to suit pollution figures (either noise or emissions) then the UK, Germany and a couple of others will implement such a diktat. The French will shrug their collective shoulders and say something like "Pfft" but eventually would have to succumb.
Regardless of which or how many airlines flying in to Heathrow are foreign owned, if a government says "you can fly x number of flights daily into Heathrow" then nationality of ownership doesn't come into it.

[Torquelink]

I reckon that when early A380s start to be returned to lessors around 2020, we're going to see a massive drop in value, resulting in a situation just like the A340 where mid-life perfectly good A340s are worth ~20% of their original purchase price.
Lessors will see this and not buy any more. THAT is what will kill the A380.

As Dave Reid says, the A340 comparison is irrelevant. Yes used values will likely be lower than Airbus may wish because the secondary market is not yet defined. But the core major conurbation to major conurbation market (summarises the core market better than "hub to hub" as, thus far, that means just Emirates / DXB) is growing inexorably and when operators see they can lease 500+ seats for $600k/m i.e. less than a used 773ER, some will be persuaded and then some others won't want to be left behind. So the used market will develop. And the original operator of those aircraft will replace them with new, more efficient, A380s whether neos or not. It'll be slow but it'll be steady: 2014 not withstanding.

As for lessors, the A380 is just not a lessor-friendly aircraft and nor was the 747 - although that will change when it comes to acquiring used aircraft for lease into the secondary market. ILFC quickly shed their early commitments and the jury's out on Amadeo - I'd be very surprised if their order is truly speculative.

[glofish]

There are a lot of 'ifs' and 'whens' flying around here and a lot of doctors in airline horoscopes.

Fact is, Airbus did not sell one unit this year and what goes for a small local grocery store in your neighbourhood should actually go for a big airline manufacturer: No sales, no business.

[DaveReidUK]

what goes for a small local grocery store in your neighbourhood should actually go for a big airline manufacturer

Really?

When did you last go into your grocery store and order something that you'd like to have delivered in 3 years time?

[Lord Bracken]

Not to mention that aircraft are "sold" when they are delivered, so the grocery shop in Toulouse is going to be selling quite a few for quite a while yet...

[Towerman]

Quote:

...........most of the A380's do not even use RR engines.

Not so - Rolls Royce engines are currently installed on 50% of the flying A380 fleet

[GlueBall]

I don't think Airbus can afford to discontinue the A380

I don't think Airbus can afford to build the A380 without a buyer.

[keesje]

I think stating the VLA has little future can be formulated somewhat more precise.



I sense a need across the Ocean to share the pain by stating "VLA's" are not selling..

[andycba]

@keesje - at least include the 747-8f numbers in that chart to be honest

[keesje]

I think taking in the 747-8F is non-sense from a industry standpoint. Totally different market and dynamics.

[West Coast]

When did you last go into your grocery store and order something that you'd like to have delivered in 3 years time?

It's not that hard to devine the point the poster is making. Eventually the same laws of business apply to both the mom and pop outfit and a mega corporation.

But you knew that.