Last Week, Qantas Chairman Alan Joyce indicated that two 787-9 aircraft were cheaper to operate than one A380. (CNN’s Jon Ostrower on Twitter: “Qantas CEO Alan Joyce says two 787-9s carry the same number of passengers as an A380, but two 787 flights are “a bit cheaper” than one A380.”) Our economic model and analytics come to the opposite conclusion, which we outline below.
There is no question that A380 is a very economic aircraft if you have the traffic to consistently fill it. The numbers from our operating cost model continue to indicate that, even using the generous seating configuration used by Qantas, that its A380 remains an efficient solution for markets with strong traffic flow.
We took a look at the A380 versus the 787-9 using Qantas configuration in our economic model and came up with a different conclusion. We utilized three major elements in our computation of margins — revenues, aircraft capital costs, and direct operating costs, including fuel, crew, maintenance, navigation and landing fees, to come up with a margin for each aircraft over a variety of routes. Of course, there are a number of other factors that could enter the equation that we did not consider, including asset life, depreciation, residual values, as well as ground costs including the costs of two gates instead of one, and two slots instead of one, which at LHR could be as much as $75 million. We would expect, depending on route, that the gate and slot charges would substantially tilt in favor of A380, while the residual value and re-salability of an aircraft will substantially tilt in favor the 787-9.
