At the Paris show last week Airbus rolled out an important series of tweaks to the A380.  Most obvious were the new winglets, 4.7M compared to the approximate 1M fences currently used.  Not obvious to the eye are other tweaks to the wing and fuselage.  The combination of these tweaks provides an expected 4% improved fuel burn.

Airbus calls these tweaks a “development study”.  But it is surely a lot more than just a study.  At present these tweaks are going to be available on any new build aircraft.  That may be why “development study” is accurate.  No customer has moved on these tweaks yet.

The most obvious customer is Emirates.  Sir Tim Clark, the airline’s CEO has been pushing Airbus for some time to offer an A380neo.  Airbus has not moved forward on this because there are no new engines to enable a NEO.  After all, that is what neo stands for.

The two current engine OEMs, Engine Alliance and Rolls-Royce have been improving their A380 engines on a regular basis.  But neo territory seems to be 15% plus.  The current engines are not going to be going into even high single digits.  Since engines are the biggest impact for an A380neo, it is clear this can’t be achieved.  It’s not like Airbus doesn’t want to give Emirates what it wants. What Emirates wants does not exist.  For example, the idea of using the Rolls-Royce XWB engine does not work: it offers more thrust than is needed, and even if the engine were de-rated, it still weighs too much.

Of the two current engines on the A380, Emirates decided to switch from Engine Alliance to Rolls-Royce.  Emirates clearly is trying to push for better numbers.  The switch may yet turn out to be a mistake because the Rolls-Royce Trent 900 does not handle the dusty conditions in Dubai as well as the GP7200.  Emirates will take 25 A380s with the Trent.  We understand that the follow on 25 on order are not assured to Rolls-Royce.  Rumor has it that it that Qantas is seeing engine impacts from switching from Singapore to Dubai.  If the Trent 900 proves to require more cleaning and repair, the chances are better than even that the comes back.  Even now, the GP7200 has a better fuel burn by about 2%.

The game of who blinks first being played by Emirates and Airbus over the A380 comes with high stakes.  Emirates and Airbus have a co-dependency on the program.  Emirates wants to see more sales to other airlines.   Airbus wants to see Emirates go for the A380plus because they are the natural first customer.  “I’m more concerned about continuity of production,” Mr. Clark said at a show media briefing. “If they came up with what we want at the right price, knowing that we’ll need to retire aircraft fairly soon we would probably take some more. But I don’t want to be left with a pup. I don’t want to be left with aeroplanes that are headed for obsolescence.”

Mr. Clark’s fears may be dramatic, the need for the A380 is there: 90% long haul passengers pass through 60 hubs, the majority of which are congested. Moreover, Airbus research shows that 60% of passengers are willing to make an extra effort to fly the A380.  The A380 also offers a better four-class cabin layout than any other long haul aircraft because it has more space to work with.

What do we know of the A380plus?  Airbus offered this chart at the show.

The whole package takes the savings to 13% per seat.  That is near NEO territory.  Hence our title to this story.

But Emirates does not like 11-across seating.  Nor do they much like the new narrower staircases.  These may limit the 13% improvement for this airline.

However, Mr. Clark did say this: “If I put those winglets on our current fleet and they improve the performance by 4%, then we’d bite their arms off.  I think they’d probably guarantee 2.5% so you know you’ll probably get a bit more than that… and I would look at it, depending on the cost of retrofit – if it’s going to cost me $10 million a pop then we probably wouldn’t do it.”

Reading the tea leaves it seems to us that the game being played looks something like this.  Emirates is sympathetic to replacing its older (early and heavy) A380s with new ones.  The A380 has been highly supportive to the airline’s growth.  But to get the deal, Airbus must move from its current position.  Emirates wants those winglets to be retrofittable.  How does Airbus accomplish this?

The wings on the A380plus will be strengthened to handle the stresses the new winglets generate.  It was not made clear to us how much work goes into this, but it is no small thing.   We heard Airbus has an idea how to make the winglet retrofittable – only they can’t do it now.  Almost certainly the earliest aircraft present the most difficulty.

Emirates can’t get their A380neo yet – maybe in 2025 when there are new engines this could work.  Between now and then Airbus, we guess, can meet Emirates’ need by about half .  Airbus could come up with a solution for wing strengthening during big service checks that might allow for the plus winglet as a retrofit.  But for Airbus to undertake this effort it will probably need Emirates to move on the full package.  Co-dependency remains.

Were Emirates to go for the A380plus it will have a powerful tool to continue disrupting markets, with significantly improved A380 numbers. This alone is something Mr. Clark must want.  Airbus might also have a solution in hand to ensure other newer A380s could be upgraded part way to plus.  This move might take any pressure off needing the 777-9 by 2020.  Of course, Emirates could use that as an incentive for Airbus to meet them more than halfway.

From the Airbus perspective, offering Emirates something on protects its franchise.  When their aircraft come in for big checks, cabin and wing tweaks might provide the aircraft with a substantial improvement.  It may take longer than a typical check, but for ~7% better economics it will be worth it.  This also buys time until 2025 when a NEO is almost certainly doable.

The A380plus offers airlines looking at the A380 a compelling asset.  It’s not a NEO, but certainly a near-NEO.  If Emirates can get Airbus to work urgently on getting those winglets to be retrofittable, then the stepping stone from today’s A380 to the A380plus is a convenient, less steep, path.  And this path leads naturally to the A380neo.

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