Airlines set to make millions from a380 at full pax capacity

[greyb33]

With the numbers being quoted, over its fuel efficiency of 2litres of fuel burned per pax per 100km when an airline has the a380 in the maximum capacity layout of 840 passengers,Will they be set to make millions out of cheap long haul travel based on the same business model as Ryanair ?

[Flight Detent]

Only one small hickupp...

If it flies not full, it will cost them dearly!

[muduckace]

Gee wiz Beaver, that sounds Swell!!

The A380 will only have sucess seasonally in select markets. No Major money maker, just a phaloc symbol.

The 74-8 will slide in to the market, the family has years of experience as a failure during market down turns. But it is more subtle choice for the wise if 4 engines and a large floorplan is your desire.

Granted I hate to see the triple and quadruple engine aircraft see a market challenge to Twin long haul aircraft, It is the future.

I think the Freight side of the market has a place for 4 engine aircraft and will for many years, mass bulk and gross weight is a larger cargo market. The 777 has recently evolved to make a better freighter than the now non production MD-11.

Future markets that may become more demanding of bulk and weight will keep the 4 engine alive far after they are replaced by future 2 engine aircraft. But as is shown in recent history, holding a large fleet of 4 engine freighters is a large liability. I think the first A380f's will be ex-pax birds, used and abused.

[GlueBall]

greyb33: "Airlines set to make millions from a380 at full pax capacity"

Only if the price is right, because if everybody only pays $9.95 for their ticket, you can fly full all day and lose money.

And what's so magical about the A380? Why can't airlines "make millions" if flying at theoretical 100% load factor with their conventional widebodies being operated right now. . . ? There are two other elements besides load factor, called: price competition and excess capacity. :eek:

[lomapaseo]

Only if the price is right, because if everybody only pays $9.95 for their ticket, you can fly full all day and lose money


Anybody

Now I am curious. What would be about the break even point in ticket cost for a full coach load in a A380 on a 10 hour flight?

[vapilot2004]

A buck 2.99?

[Dropp the Pilot]

Yes the A380 is the airplane which guarantees untold millions for any airline, that is why they are selling so well:rolleyes: Doesn't quite explain why Air France has so many 777s though. Is that just bad management?

[Groundloop]

Doesn't quite explain why Air France has so many 777s though. Is that just bad management?

No, because the A380 was not available until now. But if you look at Air France's plans for their early A380 operations on nearly every route a single A380 rotation replaces two 777 rotations. That is where the A380 makes economic sense.

[The SSK]

Airline economics is the simplest thing. There are only four primary variables:
Traffic – revenue tonne-km
Capacity – available tonne-km
Revenue
Expenses

There are four secondary variables, which depend on the above:
Load factor – traffic divided by capacity
Yield – revenue divided by traffic
Unit cost – expenses divided by capacity
Operating ratio (= profitability) – revenue divided by expenses

And one tertiary variable:
Breakeven load factor – either unit cost divided by yield or Op ratio divided by load factor (it’s the same thing).

In the current climate of depressed premium travel (= depressed overall yields), breakeven on longhaul is probably at 80% unless you’re a Middle Eastern carrier. A three-class A380 will have slightly lower unit costs than a 747/777/A340 due to economies of scale. A one-class A380 would have much lower unit costs, so if you could replicate today’s yields, the breakeven would be much lower, and if you could fill it 100% full, you would make a packet.

There are two ‘ifs’ in the statement above.

[dessas]

Yesterday above company "firmed" its order for 2 A389 for delivery in 2013-2014 at the cost of 655M EUR.
Currently their competition flies 744 with 550 pax to RUN and MRU at about 350 EUR return from TLS, ORY, etc.
I guess with 840 pax they could make the cost fall to about 250 EUR for the 10h 30min trip.
And they plan to use it "extensively on their high density Paris route"
Guess Air Mauritius will have to fold in 3 years... or fly the 343 in full bizz cofiguration...
:(

[jimtherev]

Just had a horrible thought. A few years down the pike, when the 380's getting a bit tired and sold on, how many pilgrims could 'they' fit in? No, second thoughts, don't even want to think about it.

[parabellum]

the A380 makes economic sense


It does to the airlines, who are only buying them in sufficient numbers to fill the niche market they are best suited, (but not designed for), but it doesn't make any economic sense to Airbus who now need to sell at least 450 - 500 just to break even, (Industry figures, not mine).

[Rainboe]

They will! I remember it was inconceivable the 747 would sell 1600! The 747 is old hat- nobody will want a 50 year old design in a few years. The stretched A380 will be unmatchable on high density routes! Look at SIA's operation. UK-Far East-Australia. Out of this recession, the world will need a BIG people mover.

[BA 77]

Most airlines are not even filling their 747s at the moment so the A380 will only be a success in certain markets (like Singapore where the aviation market has grown exponentially). The A380 is the right aircraft in 10 or 15 years time when the industry will have grown considerably but it is not the correct aircraft for the present times - too big, too many unfilled seats.

The last I heard, the only airline benefiting from the A380 is Singapore Airlines while Qantas and Emirates are making losses on the A380s. Boeing got it perfect for the current market with the 787 and it shows in their order book.

BA 77.

[pool]

it's just funny: the Airbus website talks about 90 tons of payload. Would make sense with 840 passengers, 85kgs each and 13kgs of baggage = 82.3 tons. The rest in freight.
However the actual 380ies flying have a payload of between 64 and 70 tons only! How do you want to fit in so many passengers then?
The bird seems too heavy in DOW. I wonder how you can make millions with a too-heavy = "super".

[Groundloop]

Most airlines are not even filling their 747s at the moment so the A380 will only be a success in certain markets (like Singapore where the aviation market has grown exponentially). The A380 is the right aircraft in 10 or 15 years time when the industry will have grown considerably but it is not the correct aircraft for the present times - too big, too many unfilled seats.

According to the article in a recent Flight ALL current A380 operators are reporting very high load factors on their A380 services.

[BA 77]

Oh, thanks for the information. It's just the last I heard (which was a couple of months ago mind you) was that the A380's were really just lean-mean loss-making machines which were turning into huge white-elephants.

Thanks for the more recent information, BA 77.

[leewan]

Boeing got it perfect for the current market with the 787 and it shows in their order book.

Only the marketing department got it perfect with the 7 late7.:) The delivery book shows otherwise.

[BA 77]

Yeah it has been a bit (cough cough) delayed but with such a revolutionary aircraft surely that was only to be expected? I think that when it eventually flies it will be worth it because it seems like the future for everyone in the aviation industry.

BA 77.

[racedo]

Shouldn't this belong in the Humour section ?

Airlines set to lose millions then you have a good topic, just you look at Airline management and they have Loss written on their forehead.

[Dysag]

I'm not giving them, even though I could. Suffice it to say that despite its present orderbook the 787 is not the long term answer.
The 787 is TOO SMALL. That means the cost per seat is TOO HIGH and its breakeven load factor is TOO HIGH.
It's the same problem that affected the 767-300: it seemed the best bet at first, but when it needs 85% load factor to break even at today's fares, FORGET IT.
The only way to make money is to minimise the cost per seat, thus reducing the breakeven load factor to below 70%, and achieve a load of 75%.
What's the point of the 787 if its breakeven load factor is 75% and it flies with 75%?
It's TOO SMALL, you will see over the next five years. Mark my words.

[The SSK]

Here’s an interesting factoid.

Only four airlines fly between Europe and Australia with direct, same-plane, single flight number services.

Qantas, British Airways, Virgin and … Air Austral

[Skipness One Echo]

Dysag your words are wise. Summon the village elders and saddle the horses. The airlines must be told at once. They kept ordering hundereds of B767-300ERs and went mad for the B787 even going as far as to closely examining the business case in minute detail over a long period. The fools ! All they had to do was order a massive fleet of the largest commercial aircraft available and they'll make millions. Dear me, glad it was as simple as you say!

[MUFC_fan]

The last I heard, the only airline benefiting from the A380 is Singapore Airlines while Qantas and Emirates are making losses on the A380s. Boeing got it perfect for the current market with the 787 and it shows in their order book.


I'm sorry, your comparing the A380 to the 787?:confused: That's like comparing Jo Brand with Megan Fox - it just doesn't compare! The 787 will be revolutionary for secondary airports. Places such as MAN will be able to fly to destinations only a short hop to LHR, AMS, CDG or FRA could deliver. However, the A380 will mean airports such as LHR and NRT can carry more passengers while not having to increase in size.


The 787 is TOO SMALL. That means the cost per seat is TOO HIGH and its breakeven load factor is TOO HIGH.
It's the same problem that affected the 767-300: it seemed the best bet at first, but when it needs 85% load factor to break even at today's fares, FORGET IT.
The only way to make money is to minimise the cost per seat, thus reducing the breakeven load factor to below 70%, and achieve a load of 75%.
What's the point of the 787 if its breakeven load factor is 75% and it flies with 75%?
It's TOO SMALL, you will see over the next five years. Mark my words.


I agree completely. What happens when the industry starts to grow as it is expected to do? What happens when the Toffs come to power in the UK and LHR really does burst? The reality is - no one expected the 747 to take off, (excuse the pun) but it became the revolutionary aircraft of the late 20th century. I'm not saying the A380 will follow suit but the airline industry will continue to grow. World economies will grow (not least China, India and Brazil), the industry will need the A380 and the A388 will arguably be the least popular - too small.

An interesting idea:

FR purchase 100 A389s, charge starting £20/€25 one-way on long haul services (STN-SWF, NYO-BKK). Taking into account the economies of scale, an A389 would be similar to 738 on a Canaries run wouldn't it?

Oh we can dream...:ok:

[BA 77]

I totally disagree with the idea that you need to fill a 787 to 75% to breakeven. A larger aircraft doesn't necessarily have lower breakeven load factors - the Embraer 170 only needs a 62% load factor to break even and I think you have forgotten the fact that larger aircraft = larger fuel burn (yes, I do understand that this is offset by larger passenger numbers).

If you stop and look at the figures, both the 787 and the A380 burn less than 3 litres of fuel per passenger per 100km in a typical 3-class layout. Having the same fuel burn per passenger means that the breakeven load factor is roughly the same (due to the 787s low maintenance costs, someone told me that the 787 has a lower breakeven load factor that the A380)

BA 77.

[Cyrano]

A larger aircraft doesn't necessarily have lower breakeven load factors - the Embraer 170 only needs a 62% load factor to break even

This is an utterly, utterly meaningless statement. If you tell us that the Embraer 170 only needs a 62% load factor to break even on a one-hour sector with an average net fare of £80 (for example), then that means something. Without specifying that data, it means nothing - can't you see that the breakeven depends on the revenue and the costs? It'd be like saying "aircraft X needs a takeoff roll of 2000 metres" without specifying the take-off weight, the temperature or the wind.

[mustangsally]

Years ago, an airline changed its schedule from A to B. I started with two departures leaving a 10:00 in the morning and 15:00 in the afternoon. The aircraft held 150 or so passengers each. The loads were running in the 75 to 80%. It then brought in a larger aircraft with just under 300 seats and ran just one trip per day at noon. Its load were now running in the either side of 70%. The trip was still making money but not as much when it was running two trips a day.

The flying public wants more choice. Three or four smaller aircraft operating several hours apart will bring more passengers than one large one.

Captain Eddie, (Rickenbacker) when Delta entered a market would add two flight leaving a half hour prior and half and hour after the Delta schedule. With this schedule Delta could not develope a market.

Large jets are nice, but Joe Public want to leave and arrive when he wants to and not when the airline says he can leave.

Leason from Marketing 101 day 3.

[stilton]

Large Jets will always be necessary and vital between major city pairs and especially at slot or growth constrained airports. It just depends on the market,saying the 'public wants more choice' may be true and relevant in domestic short haul markets such as the US but is not elsewhere.


If you are leaving London for Sydney and have the choice of two or three flights in a day that is perfectly adequate for most people.


I am not an Airbus fan but the A380 from all accounts seems, by all accounts a good Aircraft, economical and popular with Pilots and passengers. Future versions will only get better with development and I think it will be a long term success.


I did find it surprising however in a recent article the Pilot that wrote the report quoted a fuel burn of over 28000lbs / hr which seems high even for the size of the Aircraft, conversion error perhaps ?



Cyrano makes a good point, every operator has a different break even load factor, you can't just assign the same number for everyone.