Skip to main content

Advertisement

Advertisement

Airbus A380 haunted by lack of orders marks decade in the skies

TOULOUSE (FRANCE) — At the tender age of 10, the Airbus A380 is already entering a mid-life crisis.

A visitor stands in the rain near an Airbus SAS A380 airplane during the Farnborough International Airshow in Farnborough, UK. Photo: Bloomberg

A visitor stands in the rain near an Airbus SAS A380 airplane during the Farnborough International Airshow in Farnborough, UK. Photo: Bloomberg

Follow TODAY on WhatsApp

TOULOUSE (FRANCE) — At the tender age of 10, the Airbus A380 is already entering a mid-life crisis.

The double-decker aircraft has failed to win a single order from any new airline customer for two years now, and senior management was forced to come to the airliner’s defence in December after the planemaker’s parent introduced the possibility of axing the A380 outright. As the mid-point of the year approaches, the plane has yet again drawn a blank on deals.

It’s a far cry from the jubilations in 2005, when the giant airliner took off for the first time, hailed as the star of 21st century aviation. Airbus said the A380, certified to carry as many as 853 passengers, would push arch-rival Boeing out of the monopoly on jumbo jets it held for decades and herald a new dawn of travel, pairing ultra-luxury with mass transport while alleviating the strain on congested airports.

“It’s true the market hasn’t developed as much as we’d have liked,” Airbus Chief Executive Officer Fabrice Bregier said this month. “This plane was probably launched 10 years too early.”

Mr Bregier is now trying to breathe fresh life into the A380 campaign. Airbus has assembled a team of employees from within sales, marketing, engineering and design to lobby existing and future customers of the aircraft -- including those who may buy the aircraft second-hand.

ADDING SEATS

Airbus said the “new organisation will enhance our ability to respond to market trends and customer needs quicker, by developing and deploying complete solutions faster – in order to explore and open up new market segments,” the company said in response to questions.

The lack of commercial success lies in part in a misuse of the A380’s basic purpose. When Airbus introduced the plane, it was touted as the ideal response to crowded skies, with airlines benefiting from scale and better economics by packing in more seats. Instead, carriers used the vast real estate to embrace custom extravagances including bars, showers and duty-free shopping zones, turning many A380s more into exotic luxury liners rather than vehicles of mass transportation.

Airbus wants customers to re-discover the A380 as a work horse, encouraging existing and prospective buyers to use denser configurations, seating 11-abreast instead of 10 in economy, while still exploiting the cabin’s size to keep perks like bars that distinguish the plane. The company has lifted standard seat capacity to 544 in a bid to pull customers along.

TWO-CLASS LAYOUT

It’s already helped Qantas Airways move in that direction and Singapore Airlines is now refurbishing its 19 A380s to add premium economy seats. Emirates, the A380’s biggest operator with 60 in use and another 80 on order, has some double-deckers flying in a two-class layout for 615 seats, stripping out its first-class berths.

Since 2000, the A380 has won just 317 orders, less than a third of the 1,200 Airbus projected in its first 20 years. Not a single US airline has ordered it, and only five have been contracted for China, which will be the world’s largest aviation market in 20 years.

By contrast, the two-engine A350 that Airbus introduced in 2006 had secured 780 orders by the time it first entered service early this year. To be sure, the Boeing 747-8, the latest iteration of the US manufacturer’s largest plane, has fared far worse than the A380, with Boeing cutting production to adapt.

CREATING BUZZ

The tepid response has haunted Airbus, particularly since the A380 is a hit with the flying public. The ride is smooth and quiet, and perks like bars where business-class passengers can mingle on Emirates planes have created buzz. Etihad Airways Private Joint Stock Company (PJSC) has gone as far as fitting a three-room residence into the front of its A380s, complete with a bed and a butler.

The success of large and efficient two-engine aircraft has made marketing of more fuel-intensive four-engine models a harder task. Boeing’s 777 wide-body, powered by two of the world’s largest commercial jetliner engines, has been wildly successful with customers, while Airbus was forced to bury its four-turbine A340 model conceived for ultra-long routes. Even with cheap oil, fuel costs remain the single-biggest expense for airlines and cutting the fuel bill is a major incentive.

One modest success that Airbus aims to celebrate this year is no longer producing each A380 at a loss, though admits the overall program itself will never recoup its US$25 billion (S$33.3 billion) investment.

So long as Airbus can persuade the parent company to ride out the current order dearth, the A380 has a chance to find a new generation of buyers attracted by the plane’s economics. That at least is the view of Mr John Leahy, the 64-year-old Airbus salesman who’s sold more than 12,000 planes in two decades.

“This program will be around for 40 to 50 years,” Mr Leahy said in a promotional video Airbus released for the anniversary. “No doubt in my mind about that.” BLOOMBERG

Read more of the latest in

Advertisement

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.