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Airbus A380...A Winner ?

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Old 5th May 2010, 22:25
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Airbus A380...A Winner ?

Airbus A380 Order Dearth Risks Double-Decker-Dud Fate (Update1)
May 05, 2010, 8:07 AM EDT

By Andrea Rothman

May 5 (Bloomberg) -- Five years after its first test flight, the Airbus SAS A380 superjumbo remains more than 200 units short of making the program profitable.

Only one new airline customer signed up for the 525-seat jet since commercial operations began in 2007. Deliveries slowed to 10 A380s in 2009, from 12 a year earlier, as Airbus struggled to ramp up production of the world’s largest passenger plane.

The muted response for the Airbus flagship, with just 202 orders since the jet went on offer a decade ago, contrasts with a boom in global aircraft orders and sales that led airlines to sign up for more than 3,000 wide-body planes in the same period. Airbus says it is years from making money with the A380, which cost more than 18 billion euros ($24 billion) to challenge Boeing Co.’s decades-long grip on the market for long-haul jets.

“There’s only a handful of routes you can use the A380 on, and if traffic drops on that route you’re stuck,” said Richard Aboulafia, vice president of Teal Group, an aerospace analysis company. “The A380 is best regarded as a $25 billion write-off and an act of industrial irresponsibility.”

The superjumbo idea was championed in the 1990s by former Airbus Chief Executive Officer Jean Pierson. His successor, Noel Forgeard, pursued the plane with backing from Daimler AG and Lagardere SCA, the two largest shareholders of Airbus parent European Aeronautic, Defence and Space Co. Forgeard was fired in 2006 after a six-month delay on the A380 construction.

‘Winner’

Louis Gallois, who leads EADS today, said the A380 is a “winner,” and the more than 200 planes sold so far are a success, according to a May 4 interview with Bild-Zeitung.

“Its size is the only right answer to the congestion at the overflowing airports around the world,” Gallois told the newspaper, according to comments confirmed by the company.

Building the plane cost 50 percent more than Airbus had originally earmarked, as software glitches led to production breakdowns. The delays later stretched to 2 1/2 years. This year, Airbus aims to double deliveries to 20 planes, a goal the manufacturer itself has called “aggressive.”

Deutsche Lufthansa AG gets its first A380 this month, the second European airline after Air France to operate the jet. Singapore Airlines has ordered 25 A380s, and Emirates Airline signed for 58. The list price for an A380 is $327 million, though early clients get discounts, and Airbus also owed penalties for late deliveries.

Fuel Efficient

The airplane manufacturer markets the A380 as more fuel- efficient per passenger mile than older and smaller jets, allowing airlines to alleviate congestion to major airports and on busy routes. Airlines operating the A380 say it’s a crowd pleaser, attracting flyers with its double-decker layout, and on-board perks such as first-class cabins and cocktail bars.

“Our first-class suite optimizes beautifully on the main deck, and our business class suite optimizes perfectly for the upper deck and gives us both of these things that a single floor aircraft would have to compromise,” said Lyell Strambi, group executive of operations at Sydney-based Qantas Airways Ltd., which has six A380s in service, with orders to increase its superjumbo fleet to 20.

The superjumbo’s perks may prove less attractive in a market reeling from a global recession that wiped out six years of premium travel growth, according to the International Air Transport Association. Qantas is removing first-class cabins from some A380 planes, and shrinking business class to add premium-economy and coach seats on other A380s.

Lagging Indicator

Airlines stand to lose a collective $2.8 billion this year, down from about $9.4 billion in 2009, according to a forecast IATA made before travel disruptions caused by a volcanic ash cloud last month cost airlines billions in lost revenue.

The effects from rising or contracting air travel can take more than a year to feed through to manufacturers, as airlines take time to adapt their order patterns to demand. Manufacturers estimate that there’s typically a six-month lag between the time airlines’ profit rebounds and when they begin ordering new aircraft.

Even as the economy picks up steam, airlines may be no more inclined to order the jet than during the recession. Several A380 customers have sought deferrals, while maintaining deliveries of smaller, wide-body planes. Those postponing include Air France KLM group, Etihad, Qatar Airways Ltd. and Virgin Atlantic Airways.

Virgin Delays

Virgin deferred the first of six planes on order to 2013 from 2009. The carrier has since pushed the date out to as late as 2015 and is indefinite about taking delivery at all.

“We’ve left our options open to see where that plane is by 2015 and where the market is,” Chief Executive Steve Ridgway said in a telephone interview April 28.

Virgin is now looking at Airbus’s A350, which seats 300 to 350, and plans to take delivery of 15 Boeing 787s as soon as they’re available, the CEO said. The 787, built in large parts from composite materials, seats 250 to 300 people.

The rise of the wide-body market has been helped by more reliable engines, opening up long routes to twin-engine planes such as the Boeing 777 and 787 and Airbus A350. Aviation regulators said in 2007 that jetliners with two engines are as safe as those with three or four, providing less reason for carriers to pick planes such as the A380 or competing 747-8.

Small in Japan

Before it even flew, Airbus predicted sales for the A380 of as many as 1,000. Today, Airbus’s official prediction for the next 20 years is 1,300 plane sales in the jumbo category, including the Boeing 747-8. Boeing sees potential for 740 units.

Aviation analysts are less optimistic. Over the next 10 years, airlines worldwide will take deliveries of an estimated 100 very large planes and about 450 wide-body jets, according to a forecast released May 4 by Ascend Worldwide Ltd., a London- based aviation adviser and forecaster.

One market where Airbus has so far failed to sell the A380 is Japan, a country it had targeted as one of the biggest recipients because of its dense population. Japanese airlines have been the largest operators of Boeing’s 747 jumbo plane, where the jet is used on domestic routes.

Airbus’s market share has been less than 5 percent in Japan over the last decade, with no order backlog. That compares with Boeing’s order backlog of 173 aircraft in the country.

Boeing’s Boom

Occupancy rates on routes where the A380 flies are as much as 10 percent higher than on models by competitors, said Richard Carcaillet, Airbus’s marketing director for the plane. That advantage means Japanese airlines will have no choice but to acquire the aircraft as carriers including Air France begin flying into Tokyo’s Narita, he said.

“There is strong potential in Japan and the U.S.,” he said. “Maybe not in two years, maybe in five years, or eight years, but these carriers will in my view end up deciding on the A380.” Carcaillet predicts at least another 600 sales of A380s.

Even if Carcaillet were proven right, Airbus would sell less than half as many A380s than Boeing has delivered of its 747 jumbo jet since the model was launched in 1969. When the plane first flew, it was twice as large as anything else and offered more range than any other commercial transport, opening the door to inexpensive, mass transport.

Wide-Body Revolution

In the four decades that followed, wide-body models with long range and greater flexibility moved into the market for long-haul flights. Boeing’s 787, entering service late this year, already has 866 orders and Airbus’s A350, entering service in 2013, has 530 orders for the jet.

As wide-body jets made from composite materials flock to the market, Airbus may find that its A380, with a maximum takeoff weight of 569 tons, lacks the flexibility that airlines demand to address travelers’ growing preference for direct flights instead of landing at major airports and then switching.

“The market for the plane is too limited to ever make any real money, and I don’t think the end of the recession will change that,” said Hans Weber, president of aerospace advisory firm Tecop International in San Diego. “It’s been well-received by passengers and done pretty well as far as reliability but the market’s probably limited to no more than another 200 planes.”
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Old 6th May 2010, 09:08
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Boeing's Research

Boeing's research indicated that there was little need for a super jumbo.
Aircraft with longer range, better fuel efficiency and a pax payload of around 300/350 was what was needed for the future.
Looks like they were right.
Unfortunately Boeing has had a few hiccups on the way
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Old 6th May 2010, 10:10
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I'm sure the 787 will be worth the wait.
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Old 6th May 2010, 10:22
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Read that article yesterday.

The bad thing about it is to get a non-emotional view on the Whale story. Would love to see an article like this written by a French or German author. Oh, wait, they'd probably don't write negative strories about the A380. They'll pick on the Dreamliner instead.

Maybe there is currently no big need for such a huge jet aircraft. Only time will tell if it was a good decision to construct such a bird.
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Old 7th May 2010, 01:05
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Truths

Niche Market? Yes....high volume sectors into crowded major airports.
Viable at the top of the business cycle?....Yes.When the cycle turns down yields decline as ticket prices reduce in order to fill seats.True of most aircraft but more so with the A380.
Makes the pax happy?......Yes of course it does...its new,shiny with all the latest toys and comforts.
Not quite a white whale...perhaps grey.
The 787...if it evers arrives....will knock some of the shine off and provide airlines with some greater rpoute flexibility.
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Old 7th May 2010, 01:23
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'crowded airports' says it all

The huge advantage for the A380 is great slot usage. Take SYD for example, cut down the numbers of smaller aircraft on the domestic routes, stick in the A380, and the slot problem disappears.
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Old 7th May 2010, 05:36
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A380 on Domestic Routes?

I may have misread the previous post but is limelight suggesting A380 use on domestic sectors?
Is that a viable proposition?
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Old 7th May 2010, 09:18
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Not viable. It would take too long to turn around and board.
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Old 7th May 2010, 10:29
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Not viable. It would take too long to turn around and board.
Although I also doubt about the domestic model (e.g. notable fuel savings on longer flights) I don't see your point.
Assuming you usually send 3 smaller a/c using 30 minutes ground time each. Do you really think the A380 will need more than 90 minutes instead? Where did you get this information from?
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Old 7th May 2010, 12:50
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It's going to take up more space than 3 other aircraft at the terminal for a start.
Then you also have the cost to upgrade domestic terminals.

Then you also have the problem that business pax want frequency as well as on time departure.

One A380 every 90 minutes or more will not cut it with them.

I could be wrong but I also think you'll find it will probably be only be fuel efficient on long flights not short hops like the golden triangle.Then it will also be only viable if it is full and not very early or late at night so it's utilisation will be less as a domestic aircraft.

Not a good idea
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Old 7th May 2010, 14:58
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I can't resist - have to wade in.

The A380 entered service at the worst possible economic time for starters.

Talking to mates senior at SQ J class is filling well ahead of Y and they are even considering extenting J over the complete upper deck.

Passenger appeal is a paramount concern and all the passengers I have had on QF EK and SQ Dugongs have loved how quiet and roomy they are.

As for boarding and disembarkation where is the problem? At airports I have got on and off the the girl there have been 2 chutes - 1 for upper and 1 for lower deck so it is actually better than boarding a QF763 where you have 260 odd pumped in through one door. Same applied with the 743s on the Perth run ex MEL and SYD.

Red T - the A380 takes more width at domestic and international terminals than a narrowbody, BUT QF have been running 743 equipment off domestic gates over the last few years. The A388 is not a busload wider in wingspan. Gates would naturally have to be modified for a 2 level unload/reload.

The Boeing 727 was my first "hero" closely followed by the 757.

I am afraid they paled into the ether after blasting out ouf SYD to AKL on Oscar Quebec Alpha.

The aeroplane just took all our breath away.

My passengers who fly A380 are similarly affected and ask for their services on the next flight they book.

I can't remember such a highly sought after aeroplane.

Best all

EWL
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Old 8th May 2010, 01:11
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Singapore AL uses A380s on short trips between SIN and HKG- just over three hours. This does boost utilisation.


Qantas could easily use A380s on SYD-PER, perhaps over Christmas Holiday periods. When the 747-400s started, some Qantas people thought they would never be used to NZ, but they have been used regularly.
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Old 8th May 2010, 02:39
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380 flying domestic, I don't think so

I don't believe the A380 could be efficiently flown on the domestic network. Disembarking and then boarding a full load of passengers could easily take 60 minutes, we have used this figure when deciding whether to keep the passengers on board or not during a ground delay. This does not even account for time to clean the cabin and load/unload baggage.

As for it being better than loading a B763, well there are currently 346 seats on the main deck of the A380 and without first class (as you would expect on a domestic config) you would easily fit 390+. So trying to load 390 pax through one door would take significantly longer than 260 pax onto a B763.

Loading of twice the amount of baggage through only 2 cargo doors would obviously take a considerably longer time as well.

Finally, the 380 IS a busload wider than a 747, 15 meters wider in wingspan actually, which would rule it out of almost every domestic gate on the network.

Don't get me wrong, I love the 380 and think it is/will be a winner on the medium/long haul market it was designed for, I simply disagree with speculation it could work on the Australian domestic network.
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Old 8th May 2010, 12:01
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Ah Charlie - Whiskey Papa and I go way back,

I assume she is still in the CSIRO or whatever strip she wound up in with antennae hanging off her everywhere.

I was feeling fairly lost and folorn when I turned up at ADLKT for my 1st shift with Ansett after our jobs in Tassie went west and as I was walking from the staff car park to the terminal was assulted by the sound of Darts.

There she was - EWP taxiing past in her new clothes.

I actually got a big boost from that and a tear in my eye.

So pleased to hear that the lovely old lady is still out there working her passage.

Papa and Quebec had a perculiar passenger window configuration toward the port rear with 2 windows very close together and were the only ones in the fleet that had it. Have never seen it on another F27 before or since.

Mobile is 0419 323 989 Charlie.

Nice to know another on Miss Nancy that day enjoyed it as much as I did.

Best regards

EWL

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Old 8th May 2010, 17:27
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A380-800 driver,
In Japan we are getting ride of all our 747-400SR domestic configured aircraft (for that matter all our 747-400 both DOM and INT are going or already gone!!) and replacing them with the 777-300. The main reasons were the costs but more importantly the yields they could get out of the 777-300 were so much better compared to the bigger aircraft, also Osaka (Itami) no longer allows 747. Our 747-400SR have a config of 565 seats as opposed to the 777-300 514 seats (so the bean counters only lost 50ish seats a flight!). At the moment we run them about 10 to 15 times day between the major cities, Tokyo, Osaka, Sapporo, Fukuoka and occasionally to some of the other cities during the busy times and from what they reckon the 777 just makes a lot more sense for us then the bigger aircraft did.
So I am not sure if the A380 will work in Japan in a high dense config for a while yet. In the middle of the day, even the 777-300 on the busiest routes can be half empty at times!
SIA bring the A380 SIN-NRT daily, but I have taxied/called for clearance right behind them a couple of time over the last few months and they have called in POB's of 48 and 76, recently they have been in the hundreds.
I personally like PAXING on the A380, I really like the inside of it! but I think it has to be deployed on the right routes.....and at the moment it's great for staff travel
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Old 9th May 2010, 07:09
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Even the 777 would be hard to get into Australian domestic gates - I thought Singapore might have placed some with Ansett if they had got control of AN.

In domestic configuration, maybe 777-200s would have about 350 passengers, which would make turnarounds interesting in between East Coast flights.
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Old 10th May 2010, 21:44
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"attracting flyers with its double-decker layout, and on-board perks such as first-class cabins and cocktail bars."

First Class cabins? What will they think of next?

Remember the swinging 70's when QF's 747s had a bar on the upper deck? They took them out and put more seats there. Economic necessity or health and safety issues?

"Passenger appeal is a paramount concern and all the passengers I have had on QF EK and SQ Dugongs have loved how quiet and roomy they are."

They obviously haven't heard the complaints from the pax on the lower decks (apparently the soundproofing in the ceiling isn't so good and people tromping about on the upper deck are annoying the cr@p out of the people below)
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Old 10th May 2010, 23:05
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Capt Coco
Bottom line to you point is 'the costs'. Quite right. 777-300 is extremerly efficent, however, the 748 is the first 4 engine aircraft to have lower fuel costs per Pax/Kg of cargo than the 777-300! 748 for Japanese airlines anyone?
While I would agree the market is rather small for the 748 (and 380) it has been less expensive to develop than the 380 and will probably take enough orders to cause part of the 380 market to leak away.
I'll be interested to fly both with LH , they have ordered both, as it will hopefully give a good comparision as the Airline product should be the same (apples with apples) and just the airframe different.
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Old 11th May 2010, 01:07
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Boeing Begins Assembly of First 747-8 Intercontinental


(Everett, Wash., May 8, 2010) -- Boeing (NYSE: BA) today announced it began assembly of the first 747-8 Intercontinental at the factory in Everett, Wash. Late this week, mechanics took the first step in major assembly for the new airplane by loading its wing panels and spars in the assembly tools. The spar is the internal support structure that runs through the full length of the wing.

"This milestone symbolizes the dedication, focus and hard work that our team, suppliers and customers have invested in designing this wonderful airplane," said Mo Yahyavi, vice president and general manager of the 747 program, Boeing Commercial Airplanes. "The 747-8 Intercontinental will provide our customers with increased levels of passenger comfort, greatly improved fuel efficiency and reduced emissions and noise."

Deutsche Lufthansa AG was the first airline to order the new, fuel-efficient passenger airplane, contracting for 20 747-8 Intercontinentals, with purchase rights for an additional 20. "We are very pleased to see that the production on the 747-8 Intercontinental has begun," said Nico Buchholz, senior vice president, Corporate Fleet of Deutsche Lufthansa AG. "We are looking forward to welcoming the aircraft in our fleet as it is a component of Lufthansa's strategy to modernize its fleet and increase environmental stewardship. The 747-8 shows our clear commitment to customer orientation."

The new 747-8 Intercontinental is stretched 18.3 feet (5.6 m) from the 747-400 to provide 467 seats -- 51 more than its predecessor -- in a three-class configuration. GEnx-2B engines and a new wing design provide airlines a quieter, more fuel-efficient airplane. The 747-8 is 16 percent more fuel efficient and creates a 30 percent smaller noise footprint than its predecessor. The 747-8 also provides nearly equivalent trip costs and 13 percent lower seat-mile costs than the 747-400, plus 26 percent greater cargo volume.

The 747-8 interior incorporates features from the 787 Dreamliner, including a new curved, upswept architecture that gives passengers a greater sense of space and comfort while adding more room for personal belongings. The architecture is accentuated by lighting technology that provides smooth transitions for a more restful flight.

The 747-8, which includes the 747-8 Intercontinental and the 747-8 Freighter, was launched in November 2005. Boeing has 108 orders for the 747-8 -- 32 for the 747-8 Intercontinental and 76 for the 747-8 Freighter. The first 747-8 Intercontinental is scheduled to deliver in late 2011.

Source : The Boeing Company (NYSE: BA)

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Old 13th May 2010, 06:39
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Sprocky Ger,

Would love to see an article like this written by a French or German author.
Andrea Rothman is French, based in Toulouse.

More generally,

Kingfisher is planning to use its A380s domestically within India and Emirates are planning a high-density config for regional / Indian routes - so short(er)-haul ops for A380 will likely take place. There's nothing to stop a gate or two being reconfigured at some ports to be able to handle the beast, it just comes down to whether the operator is willing to spend the money (or convince the airport owner to spend it).
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