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Daily Insight: Monday 18 February 2019: Who Benefits from the A380 Demise?

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News

Last week Airbus indicated that it will cease production of the A380 beginning in 2021.  That leaves it with no aircraft to offer larger than the 350 seat A350-1000. Boeing has a 425 seat 777-9 that will soon be delivered that offers competitive seat-mile economics, despite being based on an older aircraft.  Today, Boeing

is better positioned to take the A380 replacement market than Airbus.

Nonetheless, Airbus is better off for having cancelled the A380, which remained a financial drain on the company, and enables the new management team to begin with a “clean sheet.

Analysis

The Boeing 777-9 is the likely successor to the A380 in the near term, as it is currently the largest aircraft being offered on the market, offering 407 seats in a typical 4 class international configuration.  The 747-8 is equally as dead as the A380 and will not be a beneficiary, with only the order for the Air Force 1 replacement keeping the program alive.