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April 12, 2024
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imagesPublished reports today indicate that Air France, which has 12 A380s on order and already taken delivery of 9, is having second thoughts about the last two, and may want to exchange them for other aircraft types.  Our assessment is that the market for VLA aircraft is being taken over by Super Twins appears to be coming true faster than we expected.  A defection from A380 by Air France, the flag carrier in the country where the A380 is built, is major news, and clearly indicative of how much difficulty this program is in.

The problem is simply economic.  The new technology aircraft now entering, or soon to enter service, – 787, A350, and 777X, all offer competitive seat-mile economics to A380, and much lower aircraft mile costs with lower risk, as an airline has fewer seats to fill to break even.

Unless there is a compelling reason, such as the inability to gain adequate take-off or landing slots at a congested airport, airlines prefer to fly smaller aircraft that they know they can fill on a daily basis.  Because every week has a Tuesday, with lower traffic flows, it is safer to size an aircraft for routine loads, and be in the position to turn away business on peak days while raising prices.  Capacity control and discipline in the industry works, and with three major global alliances, is now easier to institute.

A number of current A380 orders are in jeopardy.  Earlier this year, Lufthansa cut its orders from 17 to 14.  Virgin’s orders for 6 have cancellation provisions that are likely to be taken.  Hong Kong Airlines’ order for 10 now appears  to be dubious, as does Air Austral’s order for 2.  And of course, the Kingfisher order for 5 A380s, even tough the airline hasn’t flown for more than a year and is bankrupt, remains on Airbus’ order book.  We don’t believe the last 23 airplanes we mentioned above will ever be delivered, and consider the realistic backlog for the aircraft to have shrunk from 259 to 231 at this writing.

The A380 will soon need an overhaul – new engines and a stretch – to make this airplane an economic leader again.  But in examining the market, the engine manufacturers are unlikely to put capital at risk to develop and certify engines for a program with a dubious market outlook.  Airbus is faced with the conundrum of either funding development of a derivative itself, with the hope that congestion and airport constraints emerge more strongly than they exist today, or find that the order book for their flagship will continue to decline.

I love the A380 – it is comfortable, quiet inside, and spacious.  But the market is simply not there. At a production rate of 25 aircraft per year, the current backlog of 231 aircraft likely to be delivered could keep the line going for 9 years, without further cancellations.  But if we were gamblers, we wouldn’t bet that production will still be underway in 2022, unless John Leahy can pull a rabbit out of a hat.

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20 thoughts on “Even the French are Having Second Thoughts about A380

  1. Why are the airlines not using the real potential of this airframe is a mystery to me! They could very comfortably fit 600-650 seat and dramatically enhance their financial performance.

    Air France could even do an 800 seat A380 on Paris to La reunion and maintain an 80% load factor without any problem.

  2. A rabbit from the hat, maybe. Let us see what happens during Dubai Air Show in a few weeks. Emirates may pick up another
    batch of A380s at bargain prices again. Just saying

  3. 02 mins ! FAA & Certification requirement, and yes has been demonstrated and met obviously.

  4. I think the limit has been reached and perhaps exceeded with the A380. Adding more seats is not the answer, selling heavily discounted seats to increase load factors is a losing proposition and the number of routes that can support the A380 are relatively few when compared to the number of routes a very large twin can support. The 777-9X can be easily shifted to a longer list of destinations and airports that support it.

    While the middle east airlines seem to be able to make the A380 work, it does not seem to work for the European carriers and no US carriers have ordered it. I think we are seeing the decline of the A380 as it presents too much risk in an uncertain world. Its too big to park and too large to assign to a wide range of destinations.

  5. Unfortunately, your numbers are wrong. 259 is not a backlog, it is the number of orders booked by the program. To have the actual backlog, you must subtract already delivered aircraft (115). This leaves 144 orders to execute. You should also check whether your number takes into account the recent Lufthansa cancellation (-3 orders) ; I do not think so.

  6. If you subtract the “they are gone” and “iffy” orders, then its more like 110 slots to fill yet.

    How fast are they looseing (or going to loose) congested traffic to either direct flights or the lower use surrounding fields?

    Maybe time to resurrect the A380F! (which FedEx and UPS were the only ones that it worked for)

    Emirates will take some more A380-800 but really want the 900, and will Airbus do the -900 on one Airlines desires? Its not like anyone will have a better option so Emirates makes out either way, just a matter of a bit more money in the bank, not competition. ROI says too costly to do anything effective vs the sales.

    Probably more swings on the PR aspect to Airbus as they don’t want the flaship to flatline.

  7. I don’t understand what the problem is making this plane work. Up the density to at least 650-700. And use it on super dense routes. London-NY LA-Tokyo HK-Taipeh London-Syd, Paris-NY Frankfurt-NY, etc etc, Load it up and OWN those routes. No one can compete if you up the density and set the price. Over 5000 people travel from London to NY every day. That route can support 3/4 A380s/day easily and maintain reasonable frequency.

  8. Wasn’t this the point that Boeing was trying to make about VLA many years ago? The A380 is a great aircraft but customers want frequency and they don’t care about density.

  9. you are missing the point…carriers are having trouble filling the plane and your suggesting they add more seats?

  10. Customer preferences need to be accounted for in markets where there are other options. I would rather fly a less crowded plane. I pick an A330 over a B777 and that over a B747. I am sure I am not the only budget traveller who selects particular flights based on plane type given the chance. Price is also an issue. Unless the A380 offers a significantly lower fare, I will not fly it over another smaller aircraft – after all, they should be making more profit on more dense flights and therefore customers expect lower fares, regardless of how the market really works. Ultimately, airline service quality plays a big role. However, if you are flying economy, other factors are to be considered; I for one would compromise on-board experience for better flight times and airfare.

  11. Not that long… It’s got double deck access … Try and fly it, then u will understand how spacious and quite this aircraft is

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