Retiring the A380; Whither the Operators?

It’s been widely reported that Airbus will cease production of the A380 in 2021. One of the central reasons is the decision by Emirates to reduce their outstanding orders of the ‘super jumbo’ from 53 to 14 and replace with the more nimble and cheaper A350 and A330.

Although Emirates was always by far and away the biggest A380 customer, with 110 in operation and 14 on the way, the smaller users are also moving away rapidly from the 380. The first user, Singapore has returned four at the end of their leases. Their German lessor has not been able to sell (or find another lessee) for three and sadly, they’re in the process of being scrapped. They’re only just over a decade old. There’s effectively no second-hand market; only the remaining aircraft has been let; to HiFly of Portugal and they seem to have trouble getting work for it.

Recently reported is the first Air France A380 retirement which (after a repaint in Malta) also seems destined for the scrapyard. Air France will retire all of their A380’s by 2022. The French airline has had its own issues with the aircraft; the dispatch reliability has been woeful and with a price of $50 million to refresh the interiors, they resisted throwing more money at it.

We can expect the other operators; BA, Lufthansa, Qatar etc. to follow on.

Emirates A30 c Emirates - Travel Radar - Aviation News

As much as Airbus would like us to believe otherwise, the A380 has been a failure. But why?

It’s just too big, too expensive to run—it needs to be nearly full to make money, which limits it to the most heavily traded routes. Airports dislike it; it needs special airbridges, puts strain on the facilities at immigration and customs and so on and so forth. No American airline purchased the Airbus, and in the second biggest global market, only China Southern bought a few; five in fact. With hindsight always being perfect, this all seems obvious. So why would Airbus commit the enormous investment in the first place?

The A380 was first conceived in 1988 and the project announced in 1990 to challenge the dominance of the Boeing 747. The project, the ‘A3XX’ was announced in ’94; the programme itself in 2000 and the prototype first flew in 2005. Certification was given by the American FAA and European EASA in late 2006. The aircraft first flew with Singapore in October 2007 by which stage the programme was running two years late and the development cost was an astronomical €18 billion. Airbus were in a sense, seduced into out-jumbo-ing the Jumbo.

That timeframe amounts to 13 years from announcement to customer delivery. In that time, the airline business was changing dramatically; from the ‘hub and spoke’ model used by most main-line carriers such as Emirates and Singapore to the point-to-point approach; despite an effective discount if one flew from say Perth to Paris via Dubai, enough potential passengers were willing to pay a little more to fly direct Perth-Paris. The so-called ‘long and thin’ routes are now being stretched to the limit by carriers such as QANTAS, and El Al. The A380, designed to work the high-demand hub to hub routes was becoming less relevant. That trend has increased in the intervening years.

The demise of the A380 raises other questions; to what extent will Emirates move away from their hub and spoke business model and how much will they explore the fifth-freedom rights? What of a merger between Emirates and Etihad, or with flyDubai? Given the reduced passenger numbers at Dubai, what of the new Al Maktoum International in the UAE with a capacity of 260 million passengers and an estimated cost of $82 billion?

Big questions. Sleepless nights for some. We’ll continue to monitor the situation.

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