More trouble for A380 Program ?
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Not unique for A380, with Delta's announcement that it purchased a used B777 for $10 Million, lessors are scrambling what to do with all B777 lease returns and what should be the lease rate factor for new ones. Delta probably bought just a frame without engines for parts, but such news worries Wall Street.
Traditional way of financing and maintaining planes will be history very soon. Gone are the days frames are good for 30 years and once initial problems are sorted out in a year, they are rock solid. Big players take brand new and hand them down to others after 12 years.
With Export Credit agencies and fuel efficiency third world no longer buying used planes. They can get brand new planes cheaper.
Build quality(not safety) of new types is poor. Too many prolonged teething issues (ie., troubled childhood) and early aging, faster technology obsolescence, less resale potential and less resale values.
I am thinking airlines will go power-by-hour on engines and pay-by-fly-hour for frames. Let manufacturers and lessors deal with technical issues without hurting airlines bottom line.
If engine has an issue and need to be fixed, airline won't pay frame charges either, let engine manufacturer pay to frame owner/lessor.
At what point do airbus try and re-launch the A380F?
What might work would be some sort of combi - freight on the main deck and passengers up stairs - but combis have fallen out of favor, and the latest regulations regarding cargo fire would make certification of a combi difficult.
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Would be interesting to see the math on the cost of converting it to a freighter, but i would think the efficiency of the 777 even in freighter standards would make more sense then 4 engines.
I think Airbus is stalling as long as they can to see where the market takes the 380. Think about it, huge growth coming especially in the Asian region, and as we know, governments around the world are always in "reaction mode" so airport expansion in regards to runways/slots etc wont match growth for some time. Maybe there is a hope for a few more orders especially if they can pitch a a 380neo option, maybe add a few rows but with the a350 doing well and the 7X due soon, it'll be tough to sell 4 engines.
I remember back when Singapore first tookoff their a380 maiden flight, everyone was amazed at how many seats the a380 could carry, what most forgot is that airlines make very little on economy seats. WOuld be interesting to see what Emirates does regarding their 10 year maintenance costs....
I think Airbus is stalling as long as they can to see where the market takes the 380. Think about it, huge growth coming especially in the Asian region, and as we know, governments around the world are always in "reaction mode" so airport expansion in regards to runways/slots etc wont match growth for some time. Maybe there is a hope for a few more orders especially if they can pitch a a 380neo option, maybe add a few rows but with the a350 doing well and the 7X due soon, it'll be tough to sell 4 engines.
I remember back when Singapore first tookoff their a380 maiden flight, everyone was amazed at how many seats the a380 could carry, what most forgot is that airlines make very little on economy seats. WOuld be interesting to see what Emirates does regarding their 10 year maintenance costs....
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All good points....
Reading the latest on Boeing looking to extend the range of the 737 as SLF fills me with horror, I *hate* small narrow bodied stuff even for short haul, the idea of spending 8+ hours in one sounds truly horrific.
I'm no real fan of the 777, it's nothing like as nice from a passenger perspective as the A380, less room, more noise, etc etc. which when you're doing 20+ hours on one is important (LHR/SYD).
Not been on a A350 yet to compare... maybe that's as good?
was not blown away by the 787, it's OK, but it's no A380.
Reading the latest on Boeing looking to extend the range of the 737 as SLF fills me with horror, I *hate* small narrow bodied stuff even for short haul, the idea of spending 8+ hours in one sounds truly horrific.
I'm no real fan of the 777, it's nothing like as nice from a passenger perspective as the A380, less room, more noise, etc etc. which when you're doing 20+ hours on one is important (LHR/SYD).
Not been on a A350 yet to compare... maybe that's as good?
was not blown away by the 787, it's OK, but it's no A380.
Wasn't Willie Walsh saying that IAG might be interested in additional second hand A380s if the price was right (or was he trying the beat the price down with Airbus)? Could be a home?
He might have said it for all sorts of reasons but doing so now would mean a major change of fleet plans.
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Probably Edd China said Willie Walsh no means no, don't buy crap and ask him to sort it out.
In any case BA is rationalizing its network, I don't think WW will pickup any whales willy nilly.
In any case BA is rationalizing its network, I don't think WW will pickup any whales willy nilly.
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One of the main (Airbus) argument to launch the A380 was that the increase in demand for travel, in an environment lacking airports expansions , and slots in those, would " naturally" favor VLAs . This has not come as fast as Airbus had forecast , but it will come , also in Singapore.
The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
As someone in Toulouse recently said : the fat lady as not stopped singing yet...
The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
As someone in Toulouse recently said : the fat lady as not stopped singing yet...
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One of the main (Airbus) argument to launch the A380 was that the increase in demand for travel, in an environment lacking airports expansions , and slots in those, would " naturally" favor VLAs . This has not come as fast as Airbus had forecast , but it will come , also in Singapore.
The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
As someone in Toulouse recently said : the fat lady as not stopped singing yet...
The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
As someone in Toulouse recently said : the fat lady as not stopped singing yet...
Then the VLA aircraft must be economic making as much profit as the standard wide-bodies - they aren't and they don't. Relying on poor airport performance and low runway acceptance rates to force acceptance of uneconomic aircraft is not really the right way to go.
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The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
As an aside, it looks like some German retail investors are getting burned by this SIA decision. Article unfortunately only in German, the gist of it is that some German investment funds bought into the SIA A380s and are now facing, ahem, problems... Link here: Dr. Peters: Singapur Airlines schockt Fondsanleger - manager magazin
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A short history of Airbus and finances
Most do not realize the game that Airbus has played dating back to the 1990's here is a short version of $$$, sales, subsidy, and related
1) GATT 92 ( 1992) ( now known as WTO ) set up rules for subsidy of LCA ( large commercial aircraft ) - which was really undefined other than probably larger than a piper cub.
2) This allowed nations to give deserving aircraft companies preferential- low cost loans for R&D and intital production
3) $$$ involved were based on projected sales by certain dates, and forgiveness if those targets were not met.
4) While there have been changes and arguments re Boeing and Airbus over the year as to what counts as subsidy, and changes as to ground rules- the basics in 2) still apply
5) Now about the 380. Under 2) it NOW appears that the A380 will not meet the sales goals in the agreed on time frame. Thus a good part of the ' research and early production loans ' will probably never have to be paid back . Whether or not A freighter version would also follow under the initial ground rules for additional ' loans' is NOT obvious to most of the pundits.
1) GATT 92 ( 1992) ( now known as WTO ) set up rules for subsidy of LCA ( large commercial aircraft ) - which was really undefined other than probably larger than a piper cub.
2) This allowed nations to give deserving aircraft companies preferential- low cost loans for R&D and intital production
3) $$$ involved were based on projected sales by certain dates, and forgiveness if those targets were not met.
4) While there have been changes and arguments re Boeing and Airbus over the year as to what counts as subsidy, and changes as to ground rules- the basics in 2) still apply
5) Now about the 380. Under 2) it NOW appears that the A380 will not meet the sales goals in the agreed on time frame. Thus a good part of the ' research and early production loans ' will probably never have to be paid back . Whether or not A freighter version would also follow under the initial ground rules for additional ' loans' is NOT obvious to most of the pundits.
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One of the main (Airbus) argument to launch the A380 was that the increase in demand for travel, in an environment lacking airports expansions , and slots in those, would " naturally" favour VLAs . This has not come as fast as Airbus had forecast , but it will come , also in Singapore.
The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
The other was not to leave Boeing alone in that market and possibly force them out of the VLA business. That they apparently succeeded .
2. If the 380 was only meant to kill the 747, it has come with a futile cost, the 747 was just as doomed.
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I am not working for Airbus and not trying to defend their position(s) just listening to them and working with them on some issues dating back from the A310 " Forward Facing "cockpit for those old enough to remember ...so I followed the discussions around the A380 since the beginning.( around 1990) Jean Roeder was the main spokesman at the time .
on the money :
France was pushing ( they always do) and "economic fallback " in the ( very) long them has always been their vision. Making money came second , at the time at least . Their argument was that the Caravelle and the Concorde never made money but they maintained top knowledge and engineering in Toulouse.
on the Boeing issue :
That was definitively a very strong motivator at the time :
1) for Airbus to be offering a complete range of aircraft ,i.e. to be at pair with Boeing .
2) to replace the 747 with modern technology at something like 15-20% lower operating costs (if my memory is correct, do not quote me on the percentage )
back to the thread : Singapore airlines was the launch customer for the A380, so they have the oldest air frames , replacing them by new ones can be seen as support for the aircraft too.
on the money :
France was pushing ( they always do) and "economic fallback " in the ( very) long them has always been their vision. Making money came second , at the time at least . Their argument was that the Caravelle and the Concorde never made money but they maintained top knowledge and engineering in Toulouse.
on the Boeing issue :
That was definitively a very strong motivator at the time :
1) for Airbus to be offering a complete range of aircraft ,i.e. to be at pair with Boeing .
2) to replace the 747 with modern technology at something like 15-20% lower operating costs (if my memory is correct, do not quote me on the percentage )
back to the thread : Singapore airlines was the launch customer for the A380, so they have the oldest air frames , replacing them by new ones can be seen as support for the aircraft too.
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Out of interest, have Singapore airlines got any/many 10+ year old crates in their fleet?
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Scuffers:
According to this site : https://www.planespotters.net/airlin...e-Airlines?p=3
they apparently have a few 777 which are over 15 years old .
have Singapore airlines got any/many 10+ year old crates in their fleet?
they apparently have a few 777 which are over 15 years old .
Last edited by ATC Watcher; 16th Sep 2016 at 09:10. Reason: typo
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I find myself paying a couple $100 more for the 14hr ride in an A380 over a B777 because I can, and I'm not the only one as the plane is usually full.
There may be a lot of justified hate of the A380 for other reasons but the pax just love them.
There may be a lot of justified hate of the A380 for other reasons but the pax just love them.
I'm sure you are right but as the LoCos have shown sentiment doesn't enter into the equation.
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Is there any airport including ATL,ORD and LHR which is not big enough to serve its local population? Answer is no.
Hubs are necessary but Super Hubs are self inflicted pain. Solution is not to force millions unnecessarily transit thru these Super Hubs.
Hubs are necessary but Super Hubs are self inflicted pain. Solution is not to force millions unnecessarily transit thru these Super Hubs.
From where I sit (business class on SQ) the A380 is the only way to go. And they charge (and get) a premium for it over the 777-300 on the same route. I think Airbus took the view that they had to compete with Boeing across the product range, and the A380 was both part of that strategy and a very long term punt. Unless the economics really suck, the A380 will ultimately come good. And the stretch version will be much prettier than the original.
I've read several times that the A380 is more expensive to operate than competitors. But I've never seen this demonstrated. So assuming you can fill it, and using someone like SQ or Emirates seat mix as an example, how does the revenue versus cost balance look for an A380 versus a 'new generation' 777 or an A350?
On Singapore's decision to let leased A380's go, why wouldn't they? As someone says above, they got a good deal, the early ones had problems, they can likely get shiny new ones with all the upgrades for a similar rate. Lease or buy? If the calculations are done based on based on zero residual value at the end of the 'term' and they can borrow for less than a leasing company / put up cash then ownership might make sense.
I've read several times that the A380 is more expensive to operate than competitors. But I've never seen this demonstrated. So assuming you can fill it, and using someone like SQ or Emirates seat mix as an example, how does the revenue versus cost balance look for an A380 versus a 'new generation' 777 or an A350?
On Singapore's decision to let leased A380's go, why wouldn't they? As someone says above, they got a good deal, the early ones had problems, they can likely get shiny new ones with all the upgrades for a similar rate. Lease or buy? If the calculations are done based on based on zero residual value at the end of the 'term' and they can borrow for less than a leasing company / put up cash then ownership might make sense.
Unless the economics really suck, the A380 will ultimately come good. And the stretch version will be much prettier than the original.
"the A380 will ultimately come good". How long are you going to give it - we're already 10 years down the road?
"stretch version". AFAIK I think that is still in reality a very much a "might happen, one day project".
I don't work for Airbus but from where I'm sitting right now (near Toulouse) I know a lot of the local subcontractors have already shifted their efforts largely away from the 380 and towards supporting the A350 and the 320 neo.
The 380 is far from dead but I'm not sure many see the production run picking up speed again in the forseeable future.
Last edited by wiggy; 16th Sep 2016 at 11:53.