Nobody Wants the A380 and That’s Breeding Creativity

There isn’t anything quite like the A380. The airplane is enormous, and frankly, it is a true delight to fly (as a passenger, at least). The cabin design feels spacious, you can barely hear any engine noise, and it handles turbulence well. From an airline perspective, however, it’s the economics that matter most. And in most cases, the A380 just doesn’t work. With airlines struggling to offload these airplanes, some are going to have to get creative. One already has.

The idea behind the A380 was flawed from the start. Boeing bet that airlines would prefer smaller airplanes that could go longer distances. The 787 was built on that premise and has been a star. The A350 has done quite well in its own right. But the A380? It was built to carry a whole lot of people (or freight, until that model was dropped early on) on big routes. Very few airlines had that same vision, and it was reflected in the order book.

Unloved A380

The A380 has received only 319 orders. So far, only 198 have been delivered to a mere 13 operators, and it’s unlikely all 319 will ever be built. (You think Virgin Atlantic will ever take those 6 airplanes? Nope. And neither will the lessors who have committed, I’d bet.) Of those orders, Emirates is responsible for 142 of them with 85 in the air at the end of October.

For Emirates, the A380 is the backbone of its fleet, but it might regret that as travel begins to slow. Profits in the most recent report were off 75 percent on slowing demand. It’s hard enough to fill 85 A380s when times are good. How about filling 142 when times aren’t? Emirates remains bullish, saying it would order a whole bunch more if Airbus created a “neo” version with a new, more efficient engine. But that’s not likely to happen since nobody else is all that interested.

Even the airlines that have committed to the airplane don’t seem all that… committed. Some seemed to take the airplane as a point of national pride (Air France, Lufthansa). While others seemed to be playing the “me too” game (if Korean has the A380, Asiana will too). But the cold, hard reality of operating this beast has started to take its toll, and airlines are reacting. Some have it relatively easy.

Singapore was the first to fly the A380, and has the second largest fleet with 19 flying and 5 more on order. But Singapore’s first batch of A380s came on a 10-year lease, so the first one is up next year. Singapore isn’t planning on renewing that lease, and that’ll likely be the case for at least the first five of its airplanes. We don’t know what Singapore’s long term plan is for the aircraft, but clearly it’s more interested in smaller widebodies to support its growth plans.

Then there’s Air France. The airline probably felt national pressure to order the A380, and it originally said it would take 12. But after having 10 on the property, it told Airbus it wouldn’t take the last 2. It swapped those for 3 A350s instead. While the A380 often has a flagship onboard product with many airlines, at Air France it has a tired, older interior. It’s generally an airplane to avoid. Air France never quite seemed to figure out how to use the A380.

While simply getting rid of the aircraft is ideal for many airlines, it’s not always possible. There had been talk about a secondary market being out there to scoop up these airplanes. Turkish, for instance, had been expected to pick some up before the situation in Turkey deteriorated so much that traffic dropped off dramatically. That’s not likely to happen now. And Hawaiian has said it might be able to support a couple of them, likely to compete with ANA’s decision to take 3 A380s to fly to Hawai’i because it had no other choice if it wanted to snatch Skymark from Delta’s claws. But come on, that’s probably not happening either. So with airplanes coming off lease and nobody really interested, it makes it hard for those airlines that realized they’ve mistakenly ordered the wrong airplane. What can they do?

Those airlines who want to get rid of the A380 but can’t are probably watching Malaysia very closely. See, Malaysia stupidly ordered 6 A380s when it had no real use for them. The airline was on the ropes when a turnaround began, and neither previous CEO Christoph Mueller or current CEO Peter Bellew saw any place for the A380 going forward. But without being able to unload the airplanes, it was stuck.

A lesser airline might just sit there and keep flying the things, losing money as they go. But Malaysia has instead come up with a crazy scheme to farm out the A380s to a new division that specializes in Islamic pilgrimages. This airline will operate the A380 in a super high-density 700-seat configuration, at least when it can transport Hajj pilgrims.

But wait, isn’t Hajj only once a year? There’s no question that a bunch of airlines could use the A380 during that time, but what about the rest of the year? Well, for those not in the know, Hajj isn’t the only pilgrimage to Mecca. There’s also Umrah, which happens year-round. And this is no small thing. For the first half of 2016, Saudi Arabia issued over 6 million visas for Umrah pilgrims coming from outside the country. For that, Malaysia would shift to a less-dense 600 seat configuration. These aircraft can be wet-leased out to anyone who needs some heavy lift.

Is this crazy? It would be if Malaysia felt it could find a way to actually get rid of the airplanes. But since that’s not an option, this is more of a desperate move than anything. It needs to find a way to fly those A380s and lose less money than it does today. Talk about a sad state of affairs for the A380.

If this works, then maybe the market for used A380s will pick up. It seems unlikely, however. Instead, the A380 will remain a white elephant everywhere outside of Dubai. Even in Dubai, you have to wonder if anxiety levels are rising.

(Visited 19,432 times, 1 visits today)

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

76 Comments on "Nobody Wants the A380 and That’s Breeding Creativity"

avatar
Sort by:   newest | oldest | most voted
Tim Dunn
Member

European longhaul low cost carriers to regain traffic lost to the Middle East carriers along with Turkey’s problems only aggravate the difficulty in the model the Middle East carriers built that was dependent on flooding Europe with huge amounts of capacity.

All the unsuccessful efforts by AA, DL and UA to limit the Middle East carriers might instead be replaced by basic airline economics.

grichard
Guest

I’d like to know what Airbus’s mistake was in estimating demand for this aircraft in the first place. Did they just fail to foresee improving efficiency in long-range twins?

Roger
Guest
They expected airports to get increasingly congested, and especially that passenger growth would exceed growth in aircraft slots. They didn’t expect this to apply at every airport, but rather several of the major ones (eg London Heathrow). That has been true to some extent, but not that relevant to financials since airlines are also flying to more airports too. It is worth noting that average plane sizes have been increasing. For example the A321 is preferred over the A320 these days. Or the 787-9 over the -8. However these are still nowhere close to A380 capacity. I suspect that if… Read more »
Zack Rules
Guest
I recall seeing that BA wanted a few used A380’s, they couldn’t justify exercising their order options, but for the right price, they thought it would work for a few more markets from London. But yeah, not much of a market for it. While it is fun to laugh at Airbus now, almost a decade after first commercial flight, there were a lot of 747-400’s flying around when the A380 was launched and the idea of that a twin engine jet would replace most of them was unclear at the time. The 777-200ER was only just coming online in large… Read more »
A
Guest
Lets not fool ourselves, that behemoth was developed to OneUp Boeing at their 30+ year reign as leader of the very large aircraft market. Unfortunately their timing was off. No doubt had it hit the market 10-15 years earlier the 747-400 may have been the white elephant. What seems odd is when the program got the green light in the mid-1990’s after the 777 had hit the market and Boeing had already dropped their plans for a very large aircraft placed above the 747. Additionally MD had already dropped their similar MD-12 concept in the early 90’s. That’s not all… Read more »
Frankly
Guest

Boeing gets plenty of support from US taxpayers, don’t forget the Import/Export Bank ( also known as Boeing’s Bank).

vasukiv
Member

That’s just to keep them on an even keel with the state financing that Airbus gets. That’s the whole reason for the import/export bank-to level the playing field.

Ernie SW4
Guest

Doesn’t Singapore always keep their fleet young? Does it not have 5 new A380s on order to replace the first five? Had you have reported this accurately might it have killed your doom and gloom article?

noahkimmel
Member

other than the slam at a great article….

5 planes replacing others (thus not even growing Singapore’s fleet) doesn’t change the picture at all. The plane simply is too niche to live up to expectations of large orders

Tory
Member

Would be fun to brainstorm on here creative A380 strategies, especially if they get pretty cheap on the used market. If reasonably full, is the cost per seat mile substantially below the smaller twin engine planes? Could someone like Spirit do a super low-cost NYC-LA shuttle in a high-density seat configuration? Or Allegiant to Hawaii once a week from key big cities? Just shots in the dark here, but fun to think about…

Kilroy
Guest
I’m just waiting for the planes to get cheap enough for Delta to decide to pick up a bunch of them (and I say that only half sarcastically). Alternatively, it would be fun to see what Norwegian or other low cost long haul carriers might be able to do with cheap A380s. Really, though, a plane with that many pax at a time doesn’t leave many options, even for leisure pax in high density. Maybe do some Hawaii runs, Vegas runs from Asks or Europe, perhaps a few Orlando runs from the UK or Europe. Otherwise, what, maybe a few… Read more »
WR
Guest

I seem to recall that Airbus’ vision was that airport runway capacity would not be able to keep up with increasing flight demand, so larger aircraft would be necessary. What they failed to see is that one direct flight can fulfill the same demand as two hub and spoke flights.

Kevin
Guest

I figure Baltia should be good to pick up a couple of these.

cblock2
Member

Or the rebirth of Family Airlines!

tharanga
Guest

I was scrolling down to find the Family Airlines joke. I’m glad I didn’t have to scroll far.

rud01
Member

What is LH exposure? Last time I transitted Frankfurt, it seemed all I saw were LH A380’s parked at the gates.

yo
Guest

Damn, I still haven’t flown on one…(or the 787 or the A350). I need to do some flying!

I’m thinking that a used A380 would be the perfect plane for Avatar/Family Airlines! Pack 700 people in there, (Including a troupe of mimes), sell them a cheap snack pack and fly them from LAX-LAS. It can’t fail!

David SF eastbay
Guest

I’ve never cared for the looks of the A380, it’s lacks the grace of a 747.

The only place it fits is travel between two large cities with a lot of traffic, but travelers would rather have a choice of say 6 767s at different times during the day then 1 or 2 A380s.

It appears unless something changes, that it should have never been built in the first place.

Oliver
Guest

And looks matter why?

grichard
Guest

Well, looks don’t really matter, sure. But man, it *is* one ugly airplane, with its big bulbous forehead. I don’t need to be reminded about my receding hairline every time I look at it.

southbay flier
Guest

From the moment I first saw an A380, I thought it was big and ugly. It probably doesn’t matter much from the inside, but they do look really ugly. OTOH, the 747 has always been a beautiful plane. It’s still the queen of the sky ti me.

robert
Member

It may be ugly but the A380 sure is nice plane to fly on. I’ve flown the lower deck front and back and the upper deck front all of different carriers. It’s quiet and smooth. I just don’t like the boarding and deplaning process … 500-600 passengers causes issues with baggage, customs etc. etc.

Nick
Guest

The problem isn’t the cost to acquire the A380’s now. Even if an airline got it for $1. It’s still just too many seats, too much fuel, and too many crew.

Even only one airline runs only 1 A380 on a given route, it’s practically saturated the market and torpedoed yields.

Unless you can fill 500+ seats every day on a route every day and not have to sell $200 TPAC fares it’s going to lose money.

cblock2
Member
Malaysia’s pilgrimage idea, while it has more than a whiff of desperation, isn’t half bad, as the country has a large Muslim population and a good part of that is going to be price-sensitive. But there’s a finite number of these opportunities around the world, and while Malaysia might be able to keep six A380s busy, they’re not going to look for more, even if they can charge enough to break even on these six. Seems to me the only solution is a freighter conversion programme, but would the cost per pound of freight be enough to make the plane… Read more »
SEAN
Guest

One of the byproducts of the A380 is the requirement of airport operators such as LAWA & PANYNJ to rebuild & reconfigure terminal/ gate areas at great expense. I believe JFK has at least two gates that are set up for the A380 – terminals 1 &4 have room & possibly terminal 8 does as well.

Dave
Guest

That’s why we don’t see A380s at ORD. Chicago has not made the investment in A380 infrastructure. And why should we? So Air France, Lufthansa and British Air can fly one flight a day from Europe to ORD with an A380.

The city is crazy enough to be bribed into building an A380 dock, but it make no sense for the few flights a month we would see using that aircraft.

raydahl
Member

UAL and AA might have a hand in keeping the ‘foreigners’ out by not backing an A380 gate.

Yuvi
Guest

Do you think if India and the UAE sort out the number of seats that Emirates can ply between the two countries would help Emirates fill up a380 seats? And possibly return back to 100% profitability?

Because the a380 only operates between Dubai and Mumbai and it could possibly fly to Delhi , Hyderabad, Bangalore and other a380 compatible airports. Emirates is the biggest foreign airline in India and will definitely profit from this.

A Kindred Soul aka Norman L. Wherrett, Jr.
Member
A Kindred Soul aka Norman L. Wherrett, Jr.

Rumors abound that Hertz/Avis are seeking office space located at abandoned airfields. Solution: A380-MO [mobile office]! Their huge fleets of unneeded late-model SUVs would make great public housing. [semi-LOL]

Dr Norman L Wherrett Jr Neuroproctologist – Retired

vipservices
Member

Hi there, Cranky: What is your opinion about the present and the future of Etihad’s A380 with its Residences and Apartments?
Do you believe the UAE airline wi expand the routes it has at the moment with their A380?
I appreciate your comments and congratulations for the great news you put together: I am a fan.

Cherry88
Guest

It’s lovely to fly on – barely any noise – spacious, massive toilets in club world – love it

SEAN
Guest

What is the range of an A 380. Is it greater than a B747 or 787? Could it reach say SYD from JFK?

Ken
Member

29 NOV 2016

Just rode a Lufthansa 380 from SFO to FRA. First time. Wonderful.
It didn’t hurt that Lufthansa really treats passengers well. I was in economy and had dinner and breakfast that rivals Biz Class fare elsewhere.

Itami
Guest

I was a little surprised to see so many comments in such a short time. Truly, the A380 is the Tim Tebow of planes — everyone has an opinion on it and no one knows what to do with it.

To add on Cranky’s point earlier regarding current A380 operators, even my skeptical self was a bit surprised to see Qantas drop their remaining orders. If there’s one air market that it could feasibly work well in, I figured it would be Australia.

AJ
Member
QF seems to be one airline where it appears to work. They fly trans-Pacific and the Kangaroo route and from my limited onboard experience, the passenger loads seem healthy (although who knows about yield/margin). Of course given Australia is a long distance from many destinations, it makes more sense. They don’t bother with their Singapore (A330) or HK (747) routes. Plus they’re about to take delivery of their first 787s soon (Jetstar got the first ones), and they’re musing publicly about skipping the Middle East stopover with a PER-LHR direct flight. So this may change soon. It’s a shame as… Read more »
MN
Guest

Ahh, finally someone mentioned QF. :) I’ve flown QF A380’s on the SIN/SYD and SYD/LAX routes a few times in Coach. Great crew and a quiet/smooth ride in the belly. Same as AJ mentions, I have no clue on the economics, but the flights were nearly full. I’m also a happy flier of the 787 from AUS to LHR on occasion and am greatly pleased to have direct access to that hub from “little” Austin, TX. Boeing built a nice Bowie knife whereas Airbus gambled on the machete.

dave
Guest
The airplane never should have been built. Most of the sales have been to sovereign airlines (Ethiad, Emeriates) and to captive audiences. From the beginning, Airbus’ strategy was rooted in a 1970s version of the airline business. They spent way too much time at CDG! I wonder whether the capital demands for the A380 were so great that it allowed Boeing to get a gargantuan lead on Airbus with the 787. The capital expenditure to develop and build the A380 would have been much better deployed on the A350 and the A330 Neo. A disciplined company would have seen this… Read more »
dave
Guest

The A380 was the worst airliner decision since Convair elected to build the 880 and 990 back in the 1960s. Or Lockheed the Electra and the L1011. All were losers. The A380 will eclipse them all!

Ben Huang
Guest

“The airplane never should have been built”

Objection!

If the airplane had never been built, the A350 launch wouldn’t have gone so smoothly. Even if the A380 is unprofitable, it was essentially a “test run” of some A350 technologies.

southbay flier
Guest

Didn’t Airbus make fun of Boeing for not trying to compete with the A380 but instead of coming up with the
Dreamliner?

Tim Dunn
Member

Boeing came up with the market desirable answer to long haul new generation aircraft but let’s not forget that Boeing has an enormous development bill for the 787 as well.

William D
Member

And then Boeing in their infinient wish for one-up-manship went and made the 747-8.

How is that doing? Does not seem a roading success.

Menzo Lowery
Member

The development costs of the 747-8 were a joke compared to the A380 program. The -8 was an upgrade of existing technology while the A380 was a completely new aircraft. Plus the -8 was thought to have freighter potential so in all it wasn’t a costly choice to make the plane.

Zack Rules
Guest

And don’t forget Boeing almost built a Sonic Cruiser before they switched to the 787. Imagine the idea of flying to a place 15-20% faster! Would have been an A340 sized flop though.

southbay flier
Guest

Oh yeah, that was why Airbus was making fun of Boeing.

Bobber
Guest

I get the economics argument. But I totally agree with Cranky – it’s a beautiful aeroplane on which to be a passenger, particularly on Singapore – far nicer than the 747. Would be a shame if the programme goes tits up.

And for full disclosure, I love the 777 and the 787, too.

Glyn
Member

I second that. Last year my wife and I paid more so that we could fly on the 380 to the USA from Heathrow. What an experience – Even in cattle class+ it was better than the Business Class and Upper Class I used to fly in the early 2000’s. It was very nearly as good as the High Speed Train journey from Ashford UK to Avignon France.

matt weber
Member
The A380 has a very specific role. The bind is that almost all of the carriers that need that particular role have now ordered the aircraft. The A380 is very attractive if you have a large passenger demand to serve airports with serious slot constraints. Otherwise it is likely that the 777-300ER has lower ASM costs, and the 787 and A380 clearly have lower ASM costs. I would add that SQ rarely keeps aircraft especially long. I believe the A340-500’s are already either gone or going. In addition, the early A380’s are significantly overweight, which further degrades the economics which… Read more »
Spirit FF
Member
I’m surprised no one brought up the real reason why the A380 has been an economic failure. The A380 needs premium passengers to make money. The A380 has only 34 LD3 positions in the lower deck. With 500 passengers, there is limited space remaining, and with Airbus weight and balance issues, most airlines elect not to even schedule cargo on the A380. On the other hand, the 777-300 has 44 LD3 positions in the lower deck. Even with a full load of passengers, the 777-300 is able to carry up to 8 pallets (24 LD3 positions). With the 773 now… Read more »
Kilroy
Guest
Now that you mention it, I could see that being an interesting model for a ULCC to try. Buy A380s on the cheap, hub both freight and pax through, say, Anchorage or Iceland, and pack the pax in tightly. Hell, if you really wanted to appeal to the pax, you could try doing Hawaii as a trans-pac freight hub. The shorter flight lengths would increase the weight available to use for cargo instead of fuel, and make (say) 27″ seat pitches more tolerable. I doubt the above model would work, but it would be a fun one to model or… Read more »
matt weber
Member
The problem is the A380 is a lousy freighter. That’s the reason the A380-800F died without a single example ever being built. The number you look at in a freighter is how much dead weight do you need to carry for each pound of Cargo. There is a straight line relationship between weight and fuel burn, so every extra pound of dead weight you have to carry costs fuel burn. On the A380, there is a lot if dead weight to carry per pound of cargo. There just isn’t a lot of cargo lift capacity on the A380. That’s one… Read more »
Tim Dunn
Member

Great explanation, Matt.

I presume that in order to be a viable freighter, the A380 would have to carry cargo on what is both passenger decks plus in the cargo compartments which isn’t possible?

Plus, the challenge for larger freighter aircraft appears to be that freighter market is oversaturated and having a plane that can carry that much cargo is not needed in many markets since most combination carriers are operating aircraft that can carry fairly significant amounts of cargo at very little incremental cost.

Kilroy
Guest

> The A380 ends up with about 1200 pounds of dead weight to carry each pound of cargo.

Did you miss a decimal point somewhere? Not trying to nitpick, just a bit confused…

matt weber
Member
Yes, there is an error. It is about 1200 pounds of dead weight per unit of self load cargo (passenger). My error in the number, the relationship between the numbers however is correct. IIRC the Max cargo load on a 747-8f is about 290,000 pounds, with an OEW of 435,000 pounds, so you have about 1.5 pounds of dead weight per pound of cargo. Airbus is a lot less public about weight information, however the A380 OEW is officially about 610,000 pounds, The general consensus is the aircraft is significantly over that weight. The spread between offiicial OEW and Maximum… Read more »