Is there a market for the 380?
Thread Starter
Join Date: Apr 2003
Location: s.e. england
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
Is there a market for the 380?
I have no interest in starting a Boeing v Airbus war but I am interested in knowing what you all think about a current demand of any aircraft larger than a 747. Although I am not in the airline industry common sense would seem to say that the future of the airline industry is not number of souls but speed. This seems to me to be where the future lies.
Airbus is promising an awful lot to those who have current orders on the new plane. First, the double deck, which in 1968/69 Boeing already deemed unfavourable with the authorities for both emergency egress issues as well as gate docking. Second, they talk about a "waterfall", work-out gym and duty free shops. Wouldn't this be a CG and weight concern having passengers (and water) moving all over the plane? Not to mention the changes that airports would once again have to make to allow for a larger wing span than the 747 and 777.
I'm not even sure that pre-2001 this plane would have a market. My father is a 747 pilot who claims the bird is almost never full. He has hauled pax to Hong Kong from London with less than 400 pax. It would seem that after 2001 there is even less of a demand for larger. Subsonic planes look to be the way of the future and everything that Airbus is giving us is just pie in the sky. With so many of the larger airlines having problems with showing a profit and the smaller airlines doing well this would seem to confirm my doubts. What do you think?
Cheers!
Airbus is promising an awful lot to those who have current orders on the new plane. First, the double deck, which in 1968/69 Boeing already deemed unfavourable with the authorities for both emergency egress issues as well as gate docking. Second, they talk about a "waterfall", work-out gym and duty free shops. Wouldn't this be a CG and weight concern having passengers (and water) moving all over the plane? Not to mention the changes that airports would once again have to make to allow for a larger wing span than the 747 and 777.
I'm not even sure that pre-2001 this plane would have a market. My father is a 747 pilot who claims the bird is almost never full. He has hauled pax to Hong Kong from London with less than 400 pax. It would seem that after 2001 there is even less of a demand for larger. Subsonic planes look to be the way of the future and everything that Airbus is giving us is just pie in the sky. With so many of the larger airlines having problems with showing a profit and the smaller airlines doing well this would seem to confirm my doubts. What do you think?
Cheers!
Join Date: May 2003
Location: Europe
Posts: 627
Likes: 0
Received 0 Likes
on
0 Posts
We fly three times a day with B744 and B777 to LAX from Asia. We will use the A380 to increase the capacity ond not the sequence as we have our birds often fully packed and cannot sell more tickets. A fourth flight on certain days is not possible as we cannot get additional Airport slots. So we can keep the cycles by increasing the capacity. Does that makes sense to you?
Remark from my Pilot`s soul: I do not want to fly that Bird, 550 Seat and 5 min. before pushback two PAX missing in the duty free or somewhere else. Now you have to have fast baggage handlers to locate and off load the checked in baggage. Another satiesfying portion is that You will fly the same routes most of the the time as the number of destination are not very high. For us it would be 3 routes mayorly, boaring as I like the variations in my present schedule.
NG
Remark from my Pilot`s soul: I do not want to fly that Bird, 550 Seat and 5 min. before pushback two PAX missing in the duty free or somewhere else. Now you have to have fast baggage handlers to locate and off load the checked in baggage. Another satiesfying portion is that You will fly the same routes most of the the time as the number of destination are not very high. For us it would be 3 routes mayorly, boaring as I like the variations in my present schedule.
NG
Join Date: Aug 2000
Location: UK
Posts: 1,914
Likes: 0
Received 0 Likes
on
0 Posts
BA is flying 3 fully booked 747s a day to LAX alone in August. Most flights will depart almost full- many overbooked. Don't even try for Bangkok and Singapore! HKG flights busy. Exactly why do you think the world will stop progressing? Don't you think people argued the same when the 747 doubled the seating capacity of long range jets in the early 70s? Do you really have the experience to judge?
Thread Starter
Join Date: Apr 2003
Location: s.e. england
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
Not So Fantastic,
Indeed, I don't have the experience to say. What I was asking was others that did so that I might be able to understand why it is thought to be needed. Of course I see progress; it just seems like a bad time to bring in such a large plane at this time IF it is not needed. If there are airlines selling every seat on the 747 then that was the answer I was looking for. However, what about the shops, waterfalls and gyms Airbus is proposing? I assume you are a pilot so what are your thoughts on these items?
I am looking for some enlightenment so easy on the bashing, mate.
Cheers!
Indeed, I don't have the experience to say. What I was asking was others that did so that I might be able to understand why it is thought to be needed. Of course I see progress; it just seems like a bad time to bring in such a large plane at this time IF it is not needed. If there are airlines selling every seat on the 747 then that was the answer I was looking for. However, what about the shops, waterfalls and gyms Airbus is proposing? I assume you are a pilot so what are your thoughts on these items?
I am looking for some enlightenment so easy on the bashing, mate.
Cheers!
The 380 represents an interesting problem. The seat mile cost is great - but only if all the seats are full. Start having empties and your per seat mile costs are now going up.
With yield management the response is sell the seats cheap - below "cost" (cost is a very elastic term). This is only a short term fix - and leads to a public expectation that if I hold out I can get it cheap. In some respects yield management has become the tail that wagged the dog.
In the US the reponse has being many airlines found it was cheaper to go to a smaller plane and "dump" the cheap seats at the back.
Interestingly the profitable airlines - jet blue - south west - dare I say Ryanair - and other LCC's have all gone the route of smaller planes - high frequency.
What happens on the long haul international market is different - but the 777 has cut into the 747 sales.
Another area often overlooked is the actual cash generated off a flight - First and Business are basically paying the way for the whole plane. Offered an option I suspect these passengers will avoid a mega bus with more chances for delays.
These two trends are obvious out of Newark - 15 years ago you got on 747 and went to London and then went to Belfast, manchester etc etc. Now you can fly direct - every night to Birmingham, Glasgow, Manchester, Shannon - all on twin jets.
The even more interesting trend is Lufthansa is now running all business class 737-800's to dusseldorf every night - 48 seats @ $5,000 RT - not a bad deal. I believe they have expanded this service.
So depending on the trends the A-380 may become a sink - lots of churning - little profit. If it can maintain loads and the right mix it will be a cash cow. The one buyer who does not have to worry is FEDEX.
One thing I do know is you can forget the waterfalls - gyms - food courts - etc - great hype - the beancounters will jam in the seats.
With yield management the response is sell the seats cheap - below "cost" (cost is a very elastic term). This is only a short term fix - and leads to a public expectation that if I hold out I can get it cheap. In some respects yield management has become the tail that wagged the dog.
In the US the reponse has being many airlines found it was cheaper to go to a smaller plane and "dump" the cheap seats at the back.
Interestingly the profitable airlines - jet blue - south west - dare I say Ryanair - and other LCC's have all gone the route of smaller planes - high frequency.
What happens on the long haul international market is different - but the 777 has cut into the 747 sales.
Another area often overlooked is the actual cash generated off a flight - First and Business are basically paying the way for the whole plane. Offered an option I suspect these passengers will avoid a mega bus with more chances for delays.
These two trends are obvious out of Newark - 15 years ago you got on 747 and went to London and then went to Belfast, manchester etc etc. Now you can fly direct - every night to Birmingham, Glasgow, Manchester, Shannon - all on twin jets.
The even more interesting trend is Lufthansa is now running all business class 737-800's to dusseldorf every night - 48 seats @ $5,000 RT - not a bad deal. I believe they have expanded this service.
So depending on the trends the A-380 may become a sink - lots of churning - little profit. If it can maintain loads and the right mix it will be a cash cow. The one buyer who does not have to worry is FEDEX.
One thing I do know is you can forget the waterfalls - gyms - food courts - etc - great hype - the beancounters will jam in the seats.
Thread Starter
Join Date: Apr 2003
Location: s.e. england
Posts: 98
Likes: 0
Received 0 Likes
on
0 Posts
That was sort of the way I was looking at things. Obviously there may be routes that could use the 380, if what B737NG and Notso Fantastic are correct but in the long run is the 380 just another Concorde when it comes to cost to fly and operate? Perhaps some of the airlines who have orders for the new airbus will have little need for the plane by 2006 if they aren't doing well in the profits?
I am not trying to speak as someone in the airline industry; I am just speaking out of what appears to be common sense.
I am not trying to speak as someone in the airline industry; I am just speaking out of what appears to be common sense.
Join Date: Aug 2000
Location: UK
Posts: 1,914
Likes: 0
Received 0 Likes
on
0 Posts
This is rehashing a lot of old stuff that is in the archives which you could find if you took the trouble to research. The 747 was too big when it was introduced- aviation would now not be the same without it. Instead of doubling capacity, the 380 is some 50% greater than a 747. In 15 years we couldn't do without it. It's called progress. Do you think some of the best brains in the world haven't done their homework and decided what is needed and when it should be supplied? What is your solution? No 380, keep the inefficient 747s operating ad infinitum? Replace the 747 with another machine the same size? AIrbus are looking to the world 10, 20, 30 years ahead. Boeing took their eye off the ball- God knows what they were doing. They totally lost the big aeroplane market. Airbus are suppling the new large aeroplane of the future, and lovely it is. I'm a Boeing pilot, but it's feeling old.....and inefficient......and as it gets unreliable, it will pass into history.
Bear Behind
129 orders from some of the world's leading carriers and it hasn't flown yet. If the press is to be believed, that'll be 139 soon with Etihad and Thai, so it's a fair bet that there is a market. Notso's abso-blooming-lutely right - with pairs of 744s following each other out of HKG and SIN each and every night heading for LHR from both BA and SQ or CX (that's 4 744s out of each airport) and with demand going up, of course it'll be needed. There are only so many slots at LHR, CDG, FRA et al, so the only way is increase the aircraft size. this is where fragmentation falls over. Still, I do look forward to taking a 7E7 directly from Leeds-Bradford to Indianapolis 
The other issue is, of course, the decrease in cost per seat. If your competitors are flying 744s but you can afford to offer a ticket price 10 or 20% lower because of the seat mile costs of the A380, then who are the pax going to flock to? Especially if this involves the service levels of SQ or Emirates for example. You can stimulate demand by doing this, though the tail wagging the dog scenario is all too true these days!
I once had to visit brand A in Toulouse. Went to Paris for a little vac. first and so tried to book tickets Paris-Toulouse. easyJet was about 80 Euros return. Air France (requesting info. by phone) was about 400 Euros. I asked the young lady at Air France why this should be when I could get an easyJet ticket for 80 Euros and was met with the reply that "they don't have the quality of Air France, monsieur". Can you guess who I flew with? This will be the same sort of phenomenon that occurs after EIS of the A380! If you don't have it, you just CAN'T compete.
The other issue is, of course, the decrease in cost per seat. If your competitors are flying 744s but you can afford to offer a ticket price 10 or 20% lower because of the seat mile costs of the A380, then who are the pax going to flock to? Especially if this involves the service levels of SQ or Emirates for example. You can stimulate demand by doing this, though the tail wagging the dog scenario is all too true these days!
I once had to visit brand A in Toulouse. Went to Paris for a little vac. first and so tried to book tickets Paris-Toulouse. easyJet was about 80 Euros return. Air France (requesting info. by phone) was about 400 Euros. I asked the young lady at Air France why this should be when I could get an easyJet ticket for 80 Euros and was met with the reply that "they don't have the quality of Air France, monsieur". Can you guess who I flew with? This will be the same sort of phenomenon that occurs after EIS of the A380! If you don't have it, you just CAN'T compete.
panda_bear
Your EZJET choice is my point - EZJET flys a 737 of some type - you would get a lower seat mile cost (based on a full plane) using something bigger - (what was AF using on that route) so why don't they?
You do stimulate demand with lower prices - here in the US there have being numerous examples , BHM, PVD, of Southwest moving into a market, lowering prices and sending traffic way up. But they do it with small planes flying full. They run 20+ flights a day from LAX to LAS (and many other routes) - the numbers would say get a bigger plane - but old Herb's crew sticks to their knitting - and makes money.
Personally I suspect the A380 will do fine - given the accounting we will never know - but it will not have anything like the impact of the 747 on the global market. The last figures I saw claimed a 10% seat mile cost advantage - the 747 was a 50%+ advantage.
Boeing has certainly lost sight of the ball and need to play catch up.
The one thing the international carrier cannot afford is market segregation - the cash is at the front of the bus - If I was trying to market forecast that is what would worry me. The people up front value time above all else - they are not going to get more space or drink more bubbly on a 380 - and if someone says my 340-500, 777 etc will get you there with less time (due to ground time) and less mixing with the rest of us - you can bet they will take their high fares with them.
Interesting to note a new airport opened in China today. Just as planes develop to demand - so do ground facilities. When I lived in Stirling the only international flights were to Prestwick Now you can do Edinburgh or Glasgow from New York. Quite the change
Boeing has certainly lost sight of the ball and need to play catch up. It will be interesting to see how it plays out.
Your EZJET choice is my point - EZJET flys a 737 of some type - you would get a lower seat mile cost (based on a full plane) using something bigger - (what was AF using on that route) so why don't they?
You do stimulate demand with lower prices - here in the US there have being numerous examples , BHM, PVD, of Southwest moving into a market, lowering prices and sending traffic way up. But they do it with small planes flying full. They run 20+ flights a day from LAX to LAS (and many other routes) - the numbers would say get a bigger plane - but old Herb's crew sticks to their knitting - and makes money.
Personally I suspect the A380 will do fine - given the accounting we will never know - but it will not have anything like the impact of the 747 on the global market. The last figures I saw claimed a 10% seat mile cost advantage - the 747 was a 50%+ advantage.
Boeing has certainly lost sight of the ball and need to play catch up.
The one thing the international carrier cannot afford is market segregation - the cash is at the front of the bus - If I was trying to market forecast that is what would worry me. The people up front value time above all else - they are not going to get more space or drink more bubbly on a 380 - and if someone says my 340-500, 777 etc will get you there with less time (due to ground time) and less mixing with the rest of us - you can bet they will take their high fares with them.
Interesting to note a new airport opened in China today. Just as planes develop to demand - so do ground facilities. When I lived in Stirling the only international flights were to Prestwick Now you can do Edinburgh or Glasgow from New York. Quite the change
Boeing has certainly lost sight of the ball and need to play catch up. It will be interesting to see how it plays out.
Bear Behind
Well now, 20driver, this is where the business model of the airline comes into being. The easyJet philosophy is using a frequency driven model. Smaller aircraft are used, though they are fitted with max seating - 156 on an A319. Put that in perspective - Jetblue have 156 on their A320!
One of the brick walls that Ryanair have run into is that they use a larger unit - 189 seats. That's just dandy when the route has developed, but there's a tacit admission in parts of Ryanair that the aircraft is too big when you develop a new route - hence the levels to which the pricing goes on Ryanair in order to stimulate demand.
In easyJet, the aircraft is that bit smaller. It's ideal to open up the route. Want to increase capacity? Simple, add another frequency. It works quite well in Europe and quite well with the smaller aircraft. You can't just bang on another 744, though, in a long haul operation - there aren't many airlines (United being the exception) that have 744s just sitting around doing nothing ready to develop routes.
The fragmentation argument works to a point - it has worked on quite a few routes over the North Atlantic - but traffic levels, certainly in Europe, mean that airports are reaching breaking point. What's the solution? Well, I'm with Airbus. Hubbing is the only solution. Look at the order books for the A345 and the 777-200LR and I think you'll see that the airlines are tending to agree that point to point is not such a safe bet - and Boeing want to put another aircraft into the market place that will do the same as the -200LR (sales are, what, 5 units on the LR?). Seems a bit of a dodgy bet to me!
Another point - India. India has a relatively small "middle-class" in percentage terms. But that's still, what, 200 million people? Translate that on a global scale and you can see that the ONLY way forward is larger aircraft....
One of the brick walls that Ryanair have run into is that they use a larger unit - 189 seats. That's just dandy when the route has developed, but there's a tacit admission in parts of Ryanair that the aircraft is too big when you develop a new route - hence the levels to which the pricing goes on Ryanair in order to stimulate demand.
In easyJet, the aircraft is that bit smaller. It's ideal to open up the route. Want to increase capacity? Simple, add another frequency. It works quite well in Europe and quite well with the smaller aircraft. You can't just bang on another 744, though, in a long haul operation - there aren't many airlines (United being the exception) that have 744s just sitting around doing nothing ready to develop routes.
The fragmentation argument works to a point - it has worked on quite a few routes over the North Atlantic - but traffic levels, certainly in Europe, mean that airports are reaching breaking point. What's the solution? Well, I'm with Airbus. Hubbing is the only solution. Look at the order books for the A345 and the 777-200LR and I think you'll see that the airlines are tending to agree that point to point is not such a safe bet - and Boeing want to put another aircraft into the market place that will do the same as the -200LR (sales are, what, 5 units on the LR?). Seems a bit of a dodgy bet to me!
Another point - India. India has a relatively small "middle-class" in percentage terms. But that's still, what, 200 million people? Translate that on a global scale and you can see that the ONLY way forward is larger aircraft....
Join Date: Jul 2000
Location: Europe
Posts: 147
Likes: 0
Received 0 Likes
on
0 Posts
As has already been mentioned, this subject has been hammered to death on other threads.
In this case I think Notso may have his head in the sand and Panda is wearing his/her rose tinted glasses!
Boeing actually got it right. They did a study of the market and came to the conclusion that whilst a very big aircraft would be desireable for a few routes by a few operators the market would never be big enough to sustain a large enough order to break even, certainly not in competition with anyone else. This conclusion was also influenced by the fact that many Boeing customers were already showing signs of ditching their B744s and moving to a versatile range of B777. Boeing decided to approach Airbus and offer a consortium for VLA which Airbus rejected. Boeing then pulled out and left Airbus to go it alone.
139 orders before the first aircrarft flies isn't really as significant as it may seem given todays financial environment. Operators are cashing in on major discounts that are currently being offered in order to satisfy THEIR needs, they don't actually give a stuff if Airbus breaks even just so long as Airbus honour their contracts and support the aicraft they deliver. Contracts that will have been very carefully written/agreed to by the operators.
The A380 is a very, very long way from break even at the moment and the 139 orders may well represent around 60% of total demand, should this be the case then Airbus will be in a financial quagmire.
It is a very misleading argument to compare the introduction of the A380 with the B747 since the B747 was, without doubt, a quantam leap, unlike the A380 which although undeniably huge is more akin to the difference between, say, a DC8-50 series and a DC8-70 series and the DC8-70 series was an acquired taste with quite limited appeal.
In this case I think Notso may have his head in the sand and Panda is wearing his/her rose tinted glasses!
Boeing actually got it right. They did a study of the market and came to the conclusion that whilst a very big aircraft would be desireable for a few routes by a few operators the market would never be big enough to sustain a large enough order to break even, certainly not in competition with anyone else. This conclusion was also influenced by the fact that many Boeing customers were already showing signs of ditching their B744s and moving to a versatile range of B777. Boeing decided to approach Airbus and offer a consortium for VLA which Airbus rejected. Boeing then pulled out and left Airbus to go it alone.
139 orders before the first aircrarft flies isn't really as significant as it may seem given todays financial environment. Operators are cashing in on major discounts that are currently being offered in order to satisfy THEIR needs, they don't actually give a stuff if Airbus breaks even just so long as Airbus honour their contracts and support the aicraft they deliver. Contracts that will have been very carefully written/agreed to by the operators.
The A380 is a very, very long way from break even at the moment and the 139 orders may well represent around 60% of total demand, should this be the case then Airbus will be in a financial quagmire.
It is a very misleading argument to compare the introduction of the A380 with the B747 since the B747 was, without doubt, a quantam leap, unlike the A380 which although undeniably huge is more akin to the difference between, say, a DC8-50 series and a DC8-70 series and the DC8-70 series was an acquired taste with quite limited appeal.
Join Date: Aug 2000
Location: UK
Posts: 1,914
Likes: 0
Received 0 Likes
on
0 Posts
Don't forget there will always be a big market for big aeroplanes. The 747s of all models cannot go on forever, and the premium operators will be looking for the replacements. Already the 747-200s are heavily retired. The 400s have been in for some 16(?) years which means the heaviest used ones are looking at retirement. The 747 retirement market alone will keep the 380 market healthy. The 747 is old now- its orders will never recover.
The Far East market will suck up all the 380s Airbus can produce. Even Emirates thinks it can use 38! When Qantas, BA, LH & AF finally order what they need, the production line will go on forever!
The Far East market will suck up all the 380s Airbus can produce. Even Emirates thinks it can use 38! When Qantas, BA, LH & AF finally order what they need, the production line will go on forever!
Join Date: Jul 2000
Location: Europe
Posts: 147
Likes: 0
Received 0 Likes
on
0 Posts
And that, Notso, is where we will have to beg to differ.
"There will always be a big market for big aeroplanes" - Somehow I don't think so. The B744 hit the ceiling and the follow up and demand for the B777 family, (and the A330/340 family), demonstrate this, I believe.
The operators will love the A380 for the high density routes but they simply don't need so many. Don't use ME airlines as any kind of yardstick as some have more money than most other airlines know what to do with and are driven more by kudos than economic sense, look at their history!
EK may well wipe out all the competition in the Gulf area and look to be using SQ as their business model but they have nothing like the catchement area of any of the Far East airlines. Should EK discover a surplus they will simply dump the spare airframes on the market creating yet further headaches for Airbus who will be desperately trying to sell new airframes.
There is a market for the A380 but it is much too small to make the aircraft a viable financial proposition for the makers, the history of ever expanding airframe size, in this case, would be a very unreliable yardstick for Airbus.
The B747 started life as a contender for the USA military as a cargo carrier with a passenger capability, it eventually became the lead singer in the commercial aeroplane market. The A380, with it's obvious size, bulk load and troop transport capability could well tread a similar path to the B747 but in reverse.
"There will always be a big market for big aeroplanes" - Somehow I don't think so. The B744 hit the ceiling and the follow up and demand for the B777 family, (and the A330/340 family), demonstrate this, I believe.
The operators will love the A380 for the high density routes but they simply don't need so many. Don't use ME airlines as any kind of yardstick as some have more money than most other airlines know what to do with and are driven more by kudos than economic sense, look at their history!
EK may well wipe out all the competition in the Gulf area and look to be using SQ as their business model but they have nothing like the catchement area of any of the Far East airlines. Should EK discover a surplus they will simply dump the spare airframes on the market creating yet further headaches for Airbus who will be desperately trying to sell new airframes.
There is a market for the A380 but it is much too small to make the aircraft a viable financial proposition for the makers, the history of ever expanding airframe size, in this case, would be a very unreliable yardstick for Airbus.
The B747 started life as a contender for the USA military as a cargo carrier with a passenger capability, it eventually became the lead singer in the commercial aeroplane market. The A380, with it's obvious size, bulk load and troop transport capability could well tread a similar path to the B747 but in reverse.
Join Date: Jun 2001
Location: Horsham UK
Posts: 366
Likes: 0
Received 0 Likes
on
0 Posts
Ah yes the eternal question is there a market for the 380?
Boeing has always said that there is only market enough for one VLA and it wasn’t very big and that’s why they weren’t going to bother (I think it was a total market for about 100-200 over 20 years or something like that anyway)
They may be right, they may be wrong, I don’t know and it appears neither do Boeing… If you remember periodically they talk about stretching the 744 but then they shelve the program again (usually because of lack of airline interest…old dog new tricks perhaps?).
So far Airboos have flogged about 130 of the beasts which either means they will only flog few more over the next 20 or 30 years or the actual size of the market is bigger than Boeing suggest. Remember there are still some very big airline players yet to ante up for 380s doesn’t mean they are not going to.
Demand for air transport is growing…long term the trend is still up.
If you draw a graph which shows the number of people traveling by air and you start it at Orville and Wilbur and end with today give or take it comes out about 5% compound annual growth on average – funny thing short term drops like 02-03 which seem to cataclysmic at the time will be hardly a squiggle in the long term graph (as the mid 70s. early 80s and 91-93 events were) (which is probably why it is that IATA is always forecasting about 5% growth – funny that).
Therefore in about 10 years or so pax numbers will be close to double today’s and in 15 years in the neighborhood of triple. Granted much of this will come from emerging markets (India domestic and China spring to mind) but necessarily there will also be growth in mature markets – significant growth.
Problem is of course, there are only so many slots…Hub bypass is likely to remain a short haul thing – long haul is still hub stuff even if it’s hub to spoke (a’la NY to Birmingham or Toulouse or wherever).
So we’ll have slot constraints (already do at some hubs – plus look at what Minetta and Blakey want to happen at ORD). So the only way to grow ASMs in that environment is bigger aircraft. This will happen right through the spectrum – replace a 50 seat RJ with a 70, a 70 with a 100, A319 with a 321 and so on – in fact it is already beginning to happen. And where to go at the big end of the equation? Step forward Airboos and the 380.
Notso also makes the point about the age of the 74 family (the base design is getting on for 40 years old – older if you go back as far as Boeing’s C5 entry that it’s based on) so there’s the replacement market on top of the need for growth.
Will there be market for the 380?
Yep I think that’s a reasonable assumption…meets the need for more pax and no competition…Mind you there still a lot of stuff to sort out (as there was when the 747 came along) airport terminal design, the weight issues and the impact of it’s wake vortices on runway capacity all spring to mind.
Boeing has always said that there is only market enough for one VLA and it wasn’t very big and that’s why they weren’t going to bother (I think it was a total market for about 100-200 over 20 years or something like that anyway)
They may be right, they may be wrong, I don’t know and it appears neither do Boeing… If you remember periodically they talk about stretching the 744 but then they shelve the program again (usually because of lack of airline interest…old dog new tricks perhaps?).
So far Airboos have flogged about 130 of the beasts which either means they will only flog few more over the next 20 or 30 years or the actual size of the market is bigger than Boeing suggest. Remember there are still some very big airline players yet to ante up for 380s doesn’t mean they are not going to.
Demand for air transport is growing…long term the trend is still up.
If you draw a graph which shows the number of people traveling by air and you start it at Orville and Wilbur and end with today give or take it comes out about 5% compound annual growth on average – funny thing short term drops like 02-03 which seem to cataclysmic at the time will be hardly a squiggle in the long term graph (as the mid 70s. early 80s and 91-93 events were) (which is probably why it is that IATA is always forecasting about 5% growth – funny that).
Therefore in about 10 years or so pax numbers will be close to double today’s and in 15 years in the neighborhood of triple. Granted much of this will come from emerging markets (India domestic and China spring to mind) but necessarily there will also be growth in mature markets – significant growth.
Problem is of course, there are only so many slots…Hub bypass is likely to remain a short haul thing – long haul is still hub stuff even if it’s hub to spoke (a’la NY to Birmingham or Toulouse or wherever).
So we’ll have slot constraints (already do at some hubs – plus look at what Minetta and Blakey want to happen at ORD). So the only way to grow ASMs in that environment is bigger aircraft. This will happen right through the spectrum – replace a 50 seat RJ with a 70, a 70 with a 100, A319 with a 321 and so on – in fact it is already beginning to happen. And where to go at the big end of the equation? Step forward Airboos and the 380.
Notso also makes the point about the age of the 74 family (the base design is getting on for 40 years old – older if you go back as far as Boeing’s C5 entry that it’s based on) so there’s the replacement market on top of the need for growth.
Will there be market for the 380?
Yep I think that’s a reasonable assumption…meets the need for more pax and no competition…Mind you there still a lot of stuff to sort out (as there was when the 747 came along) airport terminal design, the weight issues and the impact of it’s wake vortices on runway capacity all spring to mind.
Join Date: Oct 2002
Posts: 339
Likes: 0
Received 0 Likes
on
0 Posts
Is there a demand for A380, errrm let me think, So you really think that Airbus would be spending billions on developing it if there wasn't. Your argument is polarised and cynical.
"Some HKG flights are not full" OK so thats one route you have used to completely shred the case for the A380 is it??? As people have already pointed out, at todays big airports slots are at a premium. If you can reduce the number of flights to a particular destination by increasing capacity then that is a good thing surely. A380 has an already healthy order book and it hasnt even flown, i noticed recently that Thia are the latest to place a large Airbus/Boeing widebody order, including A380.
The 747 got the same response when it was in its infancy, that did alright.
I am inclined to agree over the issue of the new layout of the aircraft. Yeah it looks nice to have a gym and a bar etc etc, however, seats mean profit so i wouldnt expect to see too many fitted out like that. After saying that, Virgin, the UK launch customer, is having issues with the cabin layout, and i think we can expect something pretty innovative. Should be interesting. I hardly think a few people walking around will adversely affect the cg, this already happens on 747's so come on!!!!
Also you are incorrect on your assumption on wingspan, the A380 is not stupidly large, it fits into an 80m2 box on the ground which makes it fully compliant with all major hubs. The issue of emergency egress has also been proved to work.
On your point about faster being better why did Boeing scrap their sonic cruiser idea. They were touting the speed not size issue and got egg on thier face. It would seem to me that Boeing have not responded well to the threat of A380. The project has been around for at least 10 years and Boeing already had a large aircraft they could modify more quickly than Airbus could build, flight test, certify a new one. The A380 will be a great success i am convinced.
You also mentioned something about smaller airlines doing better and that being the way forward?? BA seems to be doing pretty well to me since the change of power a few years ago, fleet rationalisation, pooling of assets, cutting costs. Horses for courses mate, small airlines were never going to buy A380. National flag carriers will see that the A380 will be a cash cow when deployed on the right routes.
Time will tell
"Some HKG flights are not full" OK so thats one route you have used to completely shred the case for the A380 is it??? As people have already pointed out, at todays big airports slots are at a premium. If you can reduce the number of flights to a particular destination by increasing capacity then that is a good thing surely. A380 has an already healthy order book and it hasnt even flown, i noticed recently that Thia are the latest to place a large Airbus/Boeing widebody order, including A380.
The 747 got the same response when it was in its infancy, that did alright.
I am inclined to agree over the issue of the new layout of the aircraft. Yeah it looks nice to have a gym and a bar etc etc, however, seats mean profit so i wouldnt expect to see too many fitted out like that. After saying that, Virgin, the UK launch customer, is having issues with the cabin layout, and i think we can expect something pretty innovative. Should be interesting. I hardly think a few people walking around will adversely affect the cg, this already happens on 747's so come on!!!!
Also you are incorrect on your assumption on wingspan, the A380 is not stupidly large, it fits into an 80m2 box on the ground which makes it fully compliant with all major hubs. The issue of emergency egress has also been proved to work.
On your point about faster being better why did Boeing scrap their sonic cruiser idea. They were touting the speed not size issue and got egg on thier face. It would seem to me that Boeing have not responded well to the threat of A380. The project has been around for at least 10 years and Boeing already had a large aircraft they could modify more quickly than Airbus could build, flight test, certify a new one. The A380 will be a great success i am convinced.
You also mentioned something about smaller airlines doing better and that being the way forward?? BA seems to be doing pretty well to me since the change of power a few years ago, fleet rationalisation, pooling of assets, cutting costs. Horses for courses mate, small airlines were never going to buy A380. National flag carriers will see that the A380 will be a cash cow when deployed on the right routes.
Time will tell
Bear Behind
Quite frankly, increasing speed is of little relevance in spite of some personal opinions. Do you see a new supersonic passenger aircraft out there? No, didn't think so. On the drawing board even? No again. Too expensive to produce, too thirsty, too much to maintain and thus too expensive to operate. Anyone who thought that the sonic cruiser was a real aeroplane must need a serious mental health check - what's the point gaining 20 minutes in flight time only to lose it again when in the stack or during taxi in? What's the point in having an aircraft that leaves the Asian countries to arrive in Europe (the routes where you could get a meaningful time reduction) during the curfews? Why design an aircraft to cruise at the point where drag is at its highest and so burn the most fuel possible? Insanity, all of it.
The A380 DOES have a market. It IS point to point, but the points are bigger. As populations grow, so do the cities, don't forget - so there are more of those bigger points. Of course the economists in Airbus know there's a market. Of course they've studied it. And of course, so have Boeing. And they have (at least in my opinion) come to the same conclusion as Airbus - hence the Sonic Cruiser "spoiler". Just a shame it didn't work too well, because Airbus is still selling A380s. Unless I'm very much mistaken, Airbus have succeeded in adding at least one new customer every year since the launch of the A380 - not bad considering that is usually the most dead period with orders only just picking up after entry into service. 139 orders with something like 18 months to go until EIS isn't too bad, is it? And, as yet, no orders from BA, Northwest, JAL, ANA, Air China, Air India, United (?), Air New Zealand, Cathay Pacific or Cargolux who all must be prime candidates. Then there's all of the options from the existing customers that aren't included in that 139. Let's face it, Airbus stated that break even was at 250 A380s sold. That's easily achievable given this lot. There is simply no competitor and to think that fragmentation is going to replace hub services completely is madness - people are still going to have to route through hubs whether they like it or not (I reiterate my Leeds-Bradford to Indianapolis case!)
I rather think that my glasses are a bit more clear than off-pink!
The A380 DOES have a market. It IS point to point, but the points are bigger. As populations grow, so do the cities, don't forget - so there are more of those bigger points. Of course the economists in Airbus know there's a market. Of course they've studied it. And of course, so have Boeing. And they have (at least in my opinion) come to the same conclusion as Airbus - hence the Sonic Cruiser "spoiler". Just a shame it didn't work too well, because Airbus is still selling A380s. Unless I'm very much mistaken, Airbus have succeeded in adding at least one new customer every year since the launch of the A380 - not bad considering that is usually the most dead period with orders only just picking up after entry into service. 139 orders with something like 18 months to go until EIS isn't too bad, is it? And, as yet, no orders from BA, Northwest, JAL, ANA, Air China, Air India, United (?), Air New Zealand, Cathay Pacific or Cargolux who all must be prime candidates. Then there's all of the options from the existing customers that aren't included in that 139. Let's face it, Airbus stated that break even was at 250 A380s sold. That's easily achievable given this lot. There is simply no competitor and to think that fragmentation is going to replace hub services completely is madness - people are still going to have to route through hubs whether they like it or not (I reiterate my Leeds-Bradford to Indianapolis case!)
I rather think that my glasses are a bit more clear than off-pink!
Join Date: Aug 2000
Location: UK
Posts: 1,914
Likes: 0
Received 0 Likes
on
0 Posts
I can't believe so many people can be so short sighted! They'll also be 'forgetful', claiming in 5 years they 'knew all along the 380 would be successful!'. It has even better market prospects than the 747 at the equivalent stage, which was getting then a lot of derision for being too big too soon. Eventually the long range, round the world stuff, will go over completely to this machine for its cost savings. The market will be at least 50% higher than the 747 because it will strangle any competition. With the worlds economies growing at 5%/year, 10 years down the road the only answer will be 380, with Boeings flying package tourists in 7E7s! I don't have the same level of faith in 'point to point' as some do. States & Australia maybe, but the rest of the world not yet.
Union Goon
Join Date: Feb 2000
Location: New Jersey, USA
Posts: 1,097
Likes: 0
Received 0 Likes
on
0 Posts
PandaK
Do you REALLY think Airbus can break even on 250 airframes? If it is true then Airbus really isn't a business and just a state runs jobs excersize
If you do the math we will assume it was 10 billion dollars to develope the 380 (airbus has admitted a number much higher than that, plus the factory and everything else, but its easy numbers to crunch)
Assuming that the interest rate is zero for the money they have borrowed (which it effectively is which is GROSSLY unfair) 40 million dollars of every aircraft goes to paying back the loans. That is before you hang an engine, paint it, install the cockpit or anything else.
As Airbus is listing the aircraft for about 200 million, do you really think it only costs 160 million dollars to build? Now bear in mind those 129 sold aircraft which includes options (about the same number of airframes and customers as the concord at this state of developement I might add)
Now, imagine if Airbus was a legitamately run capitalist enterprise instead of a Euro jobs program that actually had to go out and borrow money (and can't easily divert it from other programs because of SEC laws). Think about how much interest would go into each airframe as well. About an additional 100 million dollars....
Notso,
The revolution of the 747s was not it SIZE. That was a byproduct of the true revolution of the 747 which was its range. 30 years later out of the 1200 or so 747s sold, only 300 of them were bought for their capacity (and many of these in Japan).
Just because you CAN fill an airplane during the summer doesn't mean you can do it year around. You can crush your yeilds by flying aircraft that are too large the rest of the year. The problem is that you need reliable heavy traffic all year around.
Is there a market for the A380? Yep. Is it vast. Nope....
Fragmentation is coming on longer routes too... Don't believe me? No one believed it on the shorter routes either. DC-10s were mostly for the domestic use market. they actually have lower seat mile costs than a 737 if you fill them. Yet southwest flies between dallas and Houston 39 times a day! That is somethign AA used to do with a DC-10 at one point! Southwest gets two things out of that. The ability to shift resources around and a steadyu consistant load factor. they don't have a flight that is empty. If the flight is empty the move the equptment somewhere else. The passenger gets the unbelievable convienience of going any time they want...
Southwest could fly bigger aircraft and drive their seat mile costs WAY down. They would trash their yeild and lose a lot of flexibility, and offer less convienience for their pax...
Cheers
Wino
Do you REALLY think Airbus can break even on 250 airframes? If it is true then Airbus really isn't a business and just a state runs jobs excersize
If you do the math we will assume it was 10 billion dollars to develope the 380 (airbus has admitted a number much higher than that, plus the factory and everything else, but its easy numbers to crunch)
Assuming that the interest rate is zero for the money they have borrowed (which it effectively is which is GROSSLY unfair) 40 million dollars of every aircraft goes to paying back the loans. That is before you hang an engine, paint it, install the cockpit or anything else.
As Airbus is listing the aircraft for about 200 million, do you really think it only costs 160 million dollars to build? Now bear in mind those 129 sold aircraft which includes options (about the same number of airframes and customers as the concord at this state of developement I might add)
Now, imagine if Airbus was a legitamately run capitalist enterprise instead of a Euro jobs program that actually had to go out and borrow money (and can't easily divert it from other programs because of SEC laws). Think about how much interest would go into each airframe as well. About an additional 100 million dollars....
Notso,
The revolution of the 747s was not it SIZE. That was a byproduct of the true revolution of the 747 which was its range. 30 years later out of the 1200 or so 747s sold, only 300 of them were bought for their capacity (and many of these in Japan).
Just because you CAN fill an airplane during the summer doesn't mean you can do it year around. You can crush your yeilds by flying aircraft that are too large the rest of the year. The problem is that you need reliable heavy traffic all year around.
Is there a market for the A380? Yep. Is it vast. Nope....
Fragmentation is coming on longer routes too... Don't believe me? No one believed it on the shorter routes either. DC-10s were mostly for the domestic use market. they actually have lower seat mile costs than a 737 if you fill them. Yet southwest flies between dallas and Houston 39 times a day! That is somethign AA used to do with a DC-10 at one point! Southwest gets two things out of that. The ability to shift resources around and a steadyu consistant load factor. they don't have a flight that is empty. If the flight is empty the move the equptment somewhere else. The passenger gets the unbelievable convienience of going any time they want...
Southwest could fly bigger aircraft and drive their seat mile costs WAY down. They would trash their yeild and lose a lot of flexibility, and offer less convienience for their pax...
Cheers
Wino