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A380 woes

Old 8th Jun 2015, 12:46
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A380 woes

Airbus has not been able to sell a new A380 in a few years. Several used A380s are now on the market. And pretty soon the leases on the early A380s will expire, potentially putting even more A380s on the market. I think these used A380s will compete with new A380s, making new A380s even harder to sell. But Airbus COO disagrees and says “Used A380s do not compete with new A380s." I think that's extremely wishful thinking.

To make matters worse, 20 or more orders for new A380s have been cancelled or have not been placed with customers, so there are effectively a bunch of brand new A380 white tails competing for new A380 orders.

Worse still, the 777X will meet or beat the A380 in cost per seat mile, wiping out that one economic advantage the A380 still enjoys.

To me, the future of the A380 looks bleak.

Used A380 Superjumbos Threaten Airbus?s Drive for Sales - Bloomberg Business
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Old 8th Jun 2015, 14:08
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Remember the Ford Edsel?
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Old 8th Jun 2015, 14:31
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Wonder how many GI Joe’s you could get in one?

Good capacity going "cheap" now that the US transport aircraft are out of production...


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Old 8th Jun 2015, 14:31
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Mmmmh. Too early to tell. I remember similar things being said about the 747 around 1970. There were also a handful of years later a lot of A300 white tails stored in TLS. Airbus ended up giving away those airplanes for (almost) free to Eastern. Both stories had a happy end.
The 380 is not a bad airplane as such. It just had the bad fortune to enter service right in one of the modern world's most severe crises. Give her another decade and perhaps the NEO.
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Old 8th Jun 2015, 14:45
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It just had the bad fortune to enter service right in one of the modern world's most severe crises
Silly argument Mach. The orders boomed while oil was 100$, they eroded when it fell to 40$ and air travel is at an all time high.

It beats me how one can pretend that the 380 has an economical advantage and no one wants that Wundervogel. It's numbers sold that speak, not spreadsheets.

On the other hand, if Leahy pretends his second hand 380ies will be offered at a price of a 77W (see article) then the shadow of 'subsidy' pops up again .....
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Old 8th Jun 2015, 14:57
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I remember similar things being said about the 747 around 1970.
Yeah, the 747 barely survived that period. But the 747 was the only airplane in that market niche. The A380 shares its market niche with other aircraft, making survival in the maketplace more difficult.

There were also a handful of years later a lot of A300 white tails stored in TLS. Airbus ended up giving away those airplanes for (almost) free to Eastern. Both stories had a happy end.
Building airplanes at government expense and then giving them away to a foreign nation was doable in the 70s. It's not doable today.

The 380 is not a bad airplane as such.
I personally think the A380 is a great machine with some superb engineering. But the market place does not care about that and the market place seems to be going a different direction. Similarly, the Concorde was an eye watering machine with some brilliant engineering. But the marketplace rejected it.

It just had the bad fortune to enter service right in one of the modern world's most severe crises. Give her another decade and perhaps the NEO.
But can it survive another decade? There have been zero sales for around three years, and it takes a 30 airframe per year rate to break even at current prices. Reducing rate ups the cost and holding price while increasing cost means losing money. Since Airbus can no longer count on government largesse to keep the line afloat, can A380 survive another decade? And is it remotely likely that management can justify developing a new model when the old model has not made any money? This is after all about making money, not making an engineering statement or national prestige, like it was in the 70s.
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Old 8th Jun 2015, 16:06
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Didn't UA just take two 380s, not used .
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Old 8th Jun 2015, 16:15
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You just have to hope STC has not bet the farm on them.
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Old 8th Jun 2015, 16:17
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Originally Posted by KenV
Similarly, the Concorde was an eye watering machine with some brilliant engineering. But the marketplace rejected it.
Well, not strictly true, Ken. Sorry to digress from A380 for a moment, but Concorde's demise was a far more complicated affair than pure market forces, or demand for seats.

Perhaps a more correct, but equally brief description would be, a Continental Airlines engineer, 9/11 and the global recession. I suspect some might disagree so I'll expand a little bit.

Concorde was bloody expensive and it always struggled to make a profit. That hardly mattered, though, because Britain and France enjoyed the kudos of running that service between Paris, London, NY and WDC, even after the cost was transferred to Air France and BA. But the people came and paid the price of a ticket for many reasons: people wanted to fly in it at Mach 2 across the Atlantic, businessmen enjoyed the time saved and the luxury, celebs wanted to be photographed flying in Concorde, etc. It worked. Just.

Then, in 2000, Continental dumped a piece of metal on the runway and we all know what happened - 113 people don't. But the following year she was back in the skies. Pretty much as before. They still came with their cheque books. And then there was 9/11, which led to an enormous slump in air travel. More profitable aircraft were able to withstand the slump, with a lot of pain, but Concorde with its delicate profit margin could not.

That's how it happened. But 27 years wasn't bad. Oh, and by the way, the Continental engineer who was sentenced to 15 months in a French prison wasn't the bloke responsible, but it is only two years since he was cleared - maybe a Continental patsy, but I don't think he even worked on the DC-10 in question. Just to be clear. But someone did.

No, the market place didn't reject Concorde as such.
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Old 8th Jun 2015, 16:23
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It's not just the A380. The 748 is also struggling having hardly sold any in 2014. Four engines have a limited future. Two engines are the way forward.
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Old 8th Jun 2015, 16:48
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No, the market place didn't reject Concorde as such.
By "reject" I did NOT mean force the few built to stop flying. I meant the market rejected them when only two airlines (both with government pressure and assistance) bought a handful of airframes. It never made a dime for the developer and manufacturer. And that's what I'm talking about. Sure, airlines are making money flying the A380, but not enough of them are buying A380 for the manufacturer to make money building and selling them. The same thing happened to Concorde. From a manufacturer's point of view, Concorde died in infancy, Tu-144 died shortly after birth, and the American SSTs were aborted before birth.
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Old 8th Jun 2015, 16:51
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Didn't UA just take two 380s, not used .
My understanding is that they're considering it and are in late negotiations with Airbus. But no contract has been signed yet. And if rumor is to be believed, they're doing it to leverage Boeing to reduce the price on 777x.
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Old 8th Jun 2015, 16:52
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Didn't UA just take two 380s, not used .
No they didn't - rumor that has subsequently been denied by the United CEO:
United Airlines CFO John Rainey has addressed the rumor saying the A380 "doesnt really work" for the United network. He does, however, admit that the airline is, in fact, currently examining the type as we reported. He has stated they would rather use multiple aircraft over one large aircraft, as business travelers prefer this.
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Old 8th Jun 2015, 16:58
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The long term growth of air travel means there is space for the A380 as well as the 77X...especially when the latter is only a paper aeroplane.

If a certain Big Airline's experience of replacing 3 x 744 a day on LHR-LAX with 2 x A380 - with increased premium capacity, constant economy capacity and vastly reduced costs - you might see some more orders in the not too distant future.

As ever with large jets, if you fill them you'll make a fortune, if you don't...
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Old 8th Jun 2015, 16:59
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Concorde

Re:- The Concorde diversion.

Sorry, the demise of Concorde had nothing to do with the Paris crash. The truth is that many decades previously, it had only sold a handful of airframes, and only to national carriers who were obliged to take it. Had it been designed to sell in such low numbers, its price would have been ten times as high. The truth of the matter is that Concorde failed to sell because:

The US disliked it for nationalistic political reasons.
The sonic boom made it unrealistic for overland operations (the biggest market).
The passenger capacity was very low.
The range was pretty low too, and a fuel-stop defeated the object.
The airframe price and fuel burn was quite high.

As to the A380, it is a big beast and has demonstrated its unsuitability for many airports with several high-profile collisions. And an airline has to be confident of filling this leviathan, otherwise it will make a thumping loss. I can see the reasons for their reticence. And the fact that it looks like a pregnant turkey does not help. Remember the old adage of: 'if it looks right.....'
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Old 8th Jun 2015, 17:00
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It's not just the A380. The 748 is also struggling having hardly sold any in 2014. Four engines have a limited future. Two engines are the way forward.
Indeed. The difference is that Boeing is confident that the large freighter market is picking up and the market analysts generally agree. And freight is the 747-8s main market niche. Airbus does not offer an A380 freighter and so cannot fall back on the freighter market to keep the A380 line going.
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Old 8th Jun 2015, 17:07
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How many 747-8F has Boeing sold in 2014/15?
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Old 8th Jun 2015, 17:24
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2 in 2014, 4 so far in 2015.

However Boeing remains optimistic for the 747-8F - there are a lot of 747 Freighters that are approaching geriatric age and will need to be replaced.
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Old 8th Jun 2015, 17:45
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The days of the four-engine passenger aircraft are certainly numbered.

Airlines are more interested in convenience, frequency and efficiency. The new Airbus A350, along with market incumbent, the Boeing 777, will be a commercial triumph - the vast majority of all long haul traffic in 2025 will occur on these airframes. The A350 has already 780 orders and the 777 close to 2000 orders now after being in service for over 20 years already.

Operators are also looking to operate into new markets all the time - however these routes obviously can't justify a 400-seat aircraft operating return daily.

Oh... and building an aircraft that you can only operate within 10% of the world's airports without modification is great commercial planning!
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Old 8th Jun 2015, 17:59
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new orders, but not to new airlines

Originally Posted by KenV
Airbus has not been able to sell a new A380 in a few years
The cited Bloomberg article specifies that Airbus has not gotten orders from new airlines in recent years, not that there have been no new orders.

Perhaps some discussion should swing to just how healthy or not it is for the aircraft to have Emirates as an enthusiastic and utterly dominant customer.

Not counting Soviet era Aeroflot, I don't recall other aircraft of importance near that of the A380 having such a narrow customer base. (Concorde was narrower, but...)
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