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Airbus ready to ace A380 if it fails to win EK order.
https://www.reuters.com/article/us-a...-idUSKBN1EL11L
PARIS (Reuters) - Airbus is drawing up contingency plans to phase out production of the world’s largest jetliner, the A380 superjumbo, if it fails to win a key order from Dubai’s Emirates, three people familiar with the matter said. The moment of truth for the slow-selling airliner looms after just 10 years in service and leaves one of Europe’s most visible international symbols hanging by a thread, despite a major airline investment in new cabins unveiled this month. “If there is no Emirates deal, Airbus will start the process of ending A380 production,” a person briefed on the plans said. A supplier added such a move was logical due to weak demand. Airbus and Emirates declined to comment. Airbus also declined to say how many people work on the project. Any shutdown is expected to be gradual, allowing Airbus to produce orders it has in hand, mainly from Emirates. It has enough orders to last until early next decade at current production rates, according to a Reuters analysis. The A380 was developed at a cost of 11 billion euros to carry some 500 people and challenge the reign of the Boeing 747. But demand for these four-engined goliaths has fallen as airlines choose smaller twin-engined models, which are easier to fill and cheaper to maintain. Emirates, however, has been a strong believer in the A380 and is easily the largest customer with total orders of 142 aircraft, of which it has taken just over 100. Talks between Airbus and Emirates over a new order for 36 superjumbos worth $16 billion broke down at the Dubai Airshow last month. Negotiations are said to have resumed, but there are no visible signs that a deal is imminent. Although airlines such as British Airways have expressed interest in the A380, Airbus is reluctant to keep factories open without the certainty that a bulk Emirates order would provide. Emirates, for its part, wants a guarantee that Airbus will keep production going for a decade to protect its investment. A decision to cancel would mark a rupture between Airbus and one of its largest customers and tie Emirates’ future growth to recent Boeing orders. European sources say that reflects growing American influence in the Gulf under President Donald Trump, but U.S. and UAE industry sources deny politics are involved. There are also potential hurdles to a deal over engine choices and after-sales support. SAFETY NET Yet if talks succeed, European sources say there is a glimmer of hope for the double-deck jet, which Airbus says will become more popular with airlines due to congestion. Singapore Airlines, which first introduced the A380 to passengers in 2007, showcased an $850 million cabin re-design this month and expressed confidence in the model’s future. Airbus hopes to use an Emirates order to stabilise output and establish a safety net from which to attract A380 sales to other carriers, but has ruled out trying to do this the other way round, industry sources said. As of the end of November, Airbus had won orders for 317 A380s and delivered 221, leaving 96 unfilled orders. But based on airlines’ intentions or finances, 47 of those are unlikely to be delivered, according to industry sources, which halves the number of jets in play. Airbus needs to sell at least another 30 to keep lines open for 10 years and possibly more to justify the price concessions likely to be demanded by any new buyers. To bridge the gap, Airbus plans to cut output to six a year beyond 2019, from 12 in 2018 and 8 in 2019, even if it means producing at a loss, Reuters recently reported. Chief Operating Officer Fabrice Bregier confirmed this month Airbus was looking at cutting output to 6-7 a year. If Airbus does decide to wind down production, some believe Emirates will ask Airbus to deliver the remaining 41 it has on order and then keep most A380s in service as long as possible. Even so, some A380s are likely to be heading for scrap. Reporting by Tim Hepher; Editing by Mark Potter Our Standards:The Thomson Reuters Trust Principles. #BUSINESS NEWSDECEMBER 27, 2017 / 10:29 PM / UP |
Monsieur Hubris, may I introduce Monsieur Nemesis?
What a pointless squandering of capital and talent this entire exercise has been. |
Not really. Its a great ride. Smoothest and quietest airliner I've ever flown on.
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"ready to ace" = ready to axe?
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I'm more worried about what EK is going to do with 150 odd of these things when they reach the end of their lifespan?
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Return most of them to the lessor.
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And that's the real reason for the controversy. No one in his right mind would want to be a lessor for this relict no more, least AB themselves! EK could buy them on their own, but know better than anyone else why not, even if it was for the ridiculous dumping price they got the first lot (once again, thank you European taxpayer).
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Ah ok thanks for clearing that up.
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Originally Posted by TURIN
(Post 10003109)
Not really. Its a great ride. Smoothest and quietest airliner I've ever flown on.
I don't believe it's in service anymore. Something about economics or whatever. |
Originally Posted by TURIN
(Post 10003109)
Not really. Its a great ride. Smoothest and quietest airliner I've ever flown on.
It's a useful aircraft for congested airports where slots are hard to get, but is it worth the high investment to get those extra seats which have a high operating cost? It would probably make more sense for Airbus to focus on stretching the A350 to compete with the B777X. |
Concorde was in a very, very different category in may ways. Yet I still believe that revenue was covering operational costs when it was axed (and every effort made to insure it would never fly again - I'm not sure what was the impetus for that but this is not the topic at hand here).
As for the 380 I am sure it is a very profitable aircraft on the "right" connection (ie when full). How good of a job Emirates does on this is anyone's guess... Any yes it is a very nice ride passenger wise. We are witnessing a poker game between Emirates and Airbus - future will tell who will flinch first ! |
Yes the Concorde was an entirely different animal. It was paid for by the taxpayers and given to BA and AF for free and the Airlines still couldn’t make it turn a profit.
When it burns as much fuel as a 747 but carries 3 1/2 times LESS pax it’s tough to make it work especially when you are route limited and do not enjoy economies of scale. |
Originally Posted by atakacs
(Post 10003403)
As for the 380 I am sure it is a very profitable aircraft on the "right" connection (ie when full).
I suspect that the number of routes where the 380 is a clear winner over a twin jet is extremely limited (much like Concorde) which probably explains the lack of orders from airlines around the globe. |
We all know the Trip wins hands down on direct operating costs. The value proposition has nothing to do with those operating costs but rather slots.
The average 380 carries 150 pax more than the Trip so if the 380 were to replace the Trip into London everyday, Emirates would lose nearly 1,000,000 passengers/year. Or need 4 extra slots and 6 more aircraft, 60 crews, support etc. etc. |
Originally Posted by Schnowzer
(Post 10004240)
We all know the Trip wins hands down on direct operating costs. The value proposition has nothing to do with those operating costs but rather slots.
The average 380 carries 150 pax more than the Trip so if the 380 were to replace the Trip into London everyday, Emirates would lose nearly 1,000,000 passengers/year. Or need 4 extra slots and 6 more aircraft, 60 crews, support etc. etc. The problem is that more and more airlines are exploring point to point services rather than hub and spoke. The modern less-patient pax wants convenience as well as low fares. The likes of a 787/350 can do that. When EK ordered 120 of these behemoths, I don’t think it was out of arrogance or ego, just a lack of foresight to see the amount of competition in the region and with far eastern carriers linking Europe and Asia. I’d be interested to know how many are leased from non-Dubai Companies and how many are actually owned by the airline/Dubai - if it’s mostly overseas lessors then I’d be worried more for them than EK! |
When the 380 was originally being mooted, wasn’t this the objective of the aircraft - translatlantic shuttling between slot-constrained major airports? It does that job VERY well. The problem is that more and more airlines are exploring point to point services rather than hub and spoke. The modern less-patient pax wants convenience as well as low fares. The likes of a 787/350 can do that. When EK ordered 120 of these behemoths, I don’t think it was out of arrogance or ego, just a lack of foresight to see the amount of competition in the region and with far eastern carriers linking Europe and Asia. |
Originally Posted by Schnowzer
(Post 10004240)
We all know the Trip wins hands down on direct operating costs. The value proposition has nothing to do with those operating costs but rather slots.
The average 380 carries 150 pax more than the Trip so if the 380 were to replace the Trip into London everyday, Emirates would lose nearly 1,000,000 passengers/year. Or need 4 extra slots and 6 more aircraft, 60 crews, support etc. etc. |
Originally Posted by Schnowzer
(Post 10004240)
We all know the Trip wins hands down on direct operating costs. The value proposition has nothing to do with those operating costs but rather slots.
The average 380 carries 150 pax more than the Trip so if the 380 were to replace the Trip into London everyday, Emirates would lose nearly 1,000,000 passengers/year. Or need 4 extra slots and 6 more aircraft, 60 crews, support etc. etc. The yield calculations must be very interesting |
Jet II,
dont forget EK had to block 100 seats to make it to LAX, DFW and IAH |
That is a load of bunk put about by the Boeing brigade. The 380 carries 3/4 of the 777-300 cargo and flies full to all those destinations if they sell the seats.
Originally Posted by GoreTex
(Post 10004876)
Jet II,
dont forget EK had to block 100 seats to make it to LAX, DFW and IAH |
Originally Posted by GoreTex
(Post 10004876)
Jet II,
dont forget EK had to block 100 seats to make it to LAX, DFW and IAH |
Originally Posted by GoreTex
dont forget EK had to block 100 seats to make it to LAX, DFW and IAH
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A380
Given the previous investment & government support, I'd be surprised to see the A380 program cancelled. Manufacturer is making good money on other programs & there's still a reasonable chance demand for the machine will pick up.
Needs to cut fuel burn by 15-20%, which is technically possible today, with larger winglets & geared turbofans. |
Originally Posted by glofish
(Post 10004504)
True, but this objective did not allow enough units to be sold to get a break-even. Airbus therefore tried to lure operators into believing that it could do just as well in competing with twins on all routes by their sheer pax number, especially by implementing more high revenue pax (you know, the ones that pay Y, get upgraded and drunk at the bar ....)
They are not 'exploring' that. It was Boeing's antithesis to the above since the beginning and most operators apparently made a better assessment of the future than EK and AB. You may call it lack of foresight, i however call it arrogance when you belittle the competition, like Timmy did when pretending that they were less skilfully managed in not going for the dugong. Just as i call it arrogance when AAR boasted on an interview that EK needed even bigger airframes, because when 'we open the doors, they flock in'. By the way I do agree about the arrogance of AAR and I doubt any pilot of any nationality in EK would defend his actions. |
I’m not an Airbus lover I was just pointing out that the 380 does some things well, in that niche market I just think it’s silly when a bunch of professionals all getting paid the same irrespective of type flown, start arguing A vs B We're never asked about what we as professional end users think would be the best tool, we might not be experts on all the aspects, true, but we might give some valuable inputs. However the outcome of wrong airframe on wrong route decisions will always trickle down the food chain and be visible on our pay cheque. So then please, dear Odin, allow us at least to talk about that on a aviation rumour forum. Or give us your definition of the appropriate themes we dare bringing up on here!:ugh: |
Gloie do the 70 blocked y class seats each night from ADL to DXB, or the 40 blocked y class seats from DXB to DAL each day, (and it's more blocked in summer time) have any effect on our pay cheque?
The 772lr burns more fuel per seat than the 380. So I guess that ain't too good for the pay cheque either. This will improve when they all change to two class though I guess. |
don
Check Trips, it's not as dramatic. ADL no blockage the next weeks, IAH and DFW 20 seats, MCO 30. But you're right, the T7 has its limitations. It delivers the promised performance nicely though, but EK simply takes it further than designed, therefore some blocked seats. But that's what i mentioned with wrong airframe for wrong destinations: It was not constrained to Airbus! The difference is that a T7 will not punish you as much as a 380 when not full, just as a 330 will punish you even less. It all comes down to what i always said (and the dugong fans never gave me credit for): The 380 has its profitable routes, but not as many as EK thought and Airbus pretended. A healthy mix gives each airframe a reasonable chance to be profitable. Therefore i welcome the 787 order over more and too many dugongs. |
Originally Posted by 777-Up
(Post 10005345)
Given the previous investment & government support, I'd be surprised to see the A380 program cancelled. Manufacturer is making good money on other programs & there's still a reasonable chance demand for the machine will pick up.
On the bright side, EK must be getting a stonking deal on the price of each airframe, which also factor's into the yield equation. |
Nobody is sure...
Nobody is sure. Nobody can be until it happens, or not. It's likely part of negotiations.
Manufacturers don't 'leak' info like that, unnecessarily, without an objective. Lots of other machines to fly if the tap is shut off. My money is on the line staying open. |
Originally Posted by General Dogsbody
(Post 10005279)
Incorrect, no blocked seats on the 380 TO of FROM those destinations!
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Originally Posted by GoreTex
(Post 10005673)
I tried to be sarcastic, I heard that story every day from the 777 guys when EK announced that the 380 will take over the LAX route
Either way its not true |
Actually GD, Goretex is well aware of this, and also is aware of how the 777 was blocking seats to LAX. He is camelier of the camels from Too Loose. He fully knows how much feed they need, how much they can carry, how far they can go, and is also very good at ensuring they don't throw a shoe mid journey. Perhaps a sarcasm header is needed from now on?
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Why is so much confusion on blocked seats? Is this a successful misinformation campaign by management?
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Originally Posted by cerbus
(Post 10003694)
Yes the Concorde was an entirely different animal. It was paid for by the taxpayers and given to BA and AF for free and the Airlines still couldn’t make it turn a profit.
When it burns as much fuel as a 747 but carries 3 1/2 times LESS pax it’s tough to make it work especially when you are route limited and do not enjoy economies of scale. |
another angle with EK is DUBAI , if there had been a much smaller 380 fleet the expansion would have virtually halted due to capacity at the main hub ? Perhaps if DWC had been developed on the original timescale then it might not be such a big problem. Common sense dictates slot restricted airports require fewer bigger aircraft . Unlike LHR which wants a new runway having recently allowed turboprops back in with hordes of narrow bodies:):)
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Originally Posted by recceguy
(Post 10005320)
Coming from the same sources as WMD in 2003 .....:rolleyes:
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The Fuel per seat figures for the A380 (ie all seats occupied) over an 6000nm ULR are 8% worse than the 777-300ER.
The 777-9x and the 787-9 are both more efficient then either of the above. These new aircraft make it hard for anyone to buy and operate new A380's. The 787-9 burns 27% less fuel per km per seat than the A380. A380 (3 class) - 3.16 per 100km (544 pax) B777-300ER - 2.91 liters per 100km (365 pax) +8% B777-9x - 2.85 liters per 100km (395 pax) + 11% B787-9 -2.49 liters per 100km (294 pax) + 27% If you can fill a A380 with pax - go for it, if you can't... park it and take a Boeing! |
speed2height
Be careful, you're rattling a very holy, almost untouchable bush ..... |
Are there many 364 seat three class 773s? Sounds like a fun flight.
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A380 axed
AB have no reason to complain really. They have played a good hand with the 330,340 and 380. Those maint contracts and spares will keep them in good stead for decades to come.
If anyone should be crying it is Boeing who built the tractor/Cripple/John Deere 777. God knows they don’t make money on that ship once it has sailed. Most reliable money maker ever made. Not an AB or B debate. Flown both. Each great in their own way. Just observation. |
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