A380

[cowpatz]

By: Ben Rich, M.C.C.
Latitudes Unlimited
International Maritime & Aviation Consulting

Airbus Future Headache: Emirates dumped/retired A380s

For all the gimmickry that Airbus aligns with the A380, the impending countdown to the arrival of the 777X at Emirates delivers some unwelcome news.
Putting aside the commercial superiority of the 777X family, the Emirates' hold on the A380 order book poses questions as to how the second hand market will cope with near-zero demand for used A380s.
Emirates will be handing back two-dozen A380s to Doric/Amedeo as well as expediting the retirement of the overweight and several-times-over-rewired A380s as it inducts more of the type around the time the 777-9X also enters their fleet in 2020.
Amedeos dubious order for 20 A380s is already in jeopardy because Emirates doesn’t want them and Amedeo has failed to place even a solitary unit elsewhere. Once these ageing A380s come out of Emirates fleet where will they go? Who will buy them? Will Airbus further underwrite a depreciating asset and thereby kill off interest in new-build A380s? And then there is the leasing market in general after ILFC ditched the A380 order, except the Amedeo order, no leasing firm has ponied up to this toxic aeroplane.

Lets cut to the chase; the possibility of the A380 getting new engines is nil. Such a move would kill any interest in the loss-making jet and would also compound Airbus financial capability to put a lid on the continued cost escalation to this $27bn-plus disaster. If Airbus does make the stupid move to give the A380 new engines, who exactly will stump up the cost?
Pratt & Whitney has no new large engine to offer. Its GTF engines are proving troublesome, GE will not be partnering with Pratt to provide an updated GP7200 engine and Rolls-Royce has eyes on new engines at the start of the next decade, which by all accounts would be too late for the A380.
Emirates savvy in commanding the near 50% of the entire A380 backlog speaks to its desire to access Europe (or threaten to dangle A350 and A380 orders) as well as making the most of its frequency-based model to use Dubai as a global transit nexus that could frankly be served with any large, long haul aeroplane the A380 has no exclusivity here.
Current A380 operators and customers have found that filling the A380 is not easy and even on the rare flights that they have filled, they are not profitable.
Malaysia Airlines, Thai Airways, British Airways, Air France, Qantas, Lufthansa, Korean Air, Singapore Airlines, China Southern Airlines all have succumbed to John Leahy Kool-Aid that it takes an A380 to compete with an A380″ nonsense, only to discover that they have slowed, not sped up A380 deliveries and in the case of Virgin Atlantic, have continually deferred it until they can fathom what to do with an obsolete aeroplane post-2018.
Airbus has spent over $1bn trying to fix the wing cracks already.
Emirates is feeling the strain here as the biggest victim to this design flaw that is compounded now by the metal fatigue in the wing spars this will impact operational life, cycles and values. Emirates were shrewd to conduct sale-leaseback deals to cash in on the then high value exclusivity of the A380 back in 2008 because so few examples were in service at that time.

Fast forward to today, Airbus is struggling to even give them away because airlines are wising up to the fact that the A380 has old technology engines, it's not a money spinner even if you fill it (yield is king, not capacity) and that the limitation of use restricts deployment.
While the 777-9X will deliver a mortal wound to the A380, it is actually Airbus biggest customer (Emirates) that is shaping up to be its biggest nightmare with its biggest flop of an aeroplane and there is nothing Airbus can do about it.
That no one is even discussing this inevitability points to an abject understanding of how fatally flawed the entire A380 program and process was when it was launched back in 2000.

Emirates will be dumping A380s as Airbus railroads the program into yet another brick wall.

[Ian Warren]

Jimmy Jillickers Cowpatz man .. don't tell that fella 'Ian' this, .... hang on that's me .... Whoops! ARBUSTED again !

[Bazza]

I reckon you wrote that Ian......Ben Rich aka Ian Warren.

[Ian Warren]

We will have to wait and see , It could have really been Ben Rich I do recall during the development a lot off speculation regard to engines many years back , about the same time they injured 30 so people on evacuation testing ten years back , there was concern then with engines but all said they would overcome the problems over time .

The over-wiring , seems to be a regular thing with the entire Airbus fleet , course also mention of structure issues ... so Hmm

[omitchell]

QUOTE (Bazza @ Jun 18 2014,11:52 AM) <{POST_SNAPBACK}>

I reckon you wrote that Ian......Ben Rich aka Ian Warren.

Sounds plausible...

[Ian Warren]

Well they are now having problems with ARBUSTS .. this was brought out even when introduced to ANZ , ... you get a bean counter who knows damn diddly swat about them, sucker kiss's the boss's arse, too pull apart and restructure a perfectly good working and speedy turn around using a well oiled machine that is so good its still in production and still going, to change the entire engineering suite airport structure, then add all governments of recent... these are starting to break down , they fired many ANZ super skilled engineering staff , no logic.

As for the A380, well it company lies again proving what happening in the industry, the funny thing is this was point out ten year back, One thing pointed out for example : most aviation and airframe experts studied a 747 and mentioned it was eight times stronger than it needed to be ... and that's 1960s engineering for you.

Arr for the world off bean counters.

[zk2704]

Bugger ME! Looks like WHOOPS, Airbus got it wrong and looks like the A380 will now frig me out just like how the A320 frigged out Ian.

[AlisterC]

VERY interesting read. Thanks for posting it up.

[Charl]

Wow that is a surprising read!
I wanted to see some more of Ben Rich's wisdom, so Googled him, and "Latitudes Unlimited International Maritime & Aviation Consulting."
Danged if it didn't turn up a single result... now that is strange, I can Google "My Left Toenail" and come up with Something.

Ah well, it's probably all 100% accurate, isn't it?

[Splitpin]

Im not going to get into the A vs B thing ....its old news , and frankly boring, and i wish it would just go away .
Great post C.P Some real info as opposed to personal bias , it will be interesting to see how toulouse responds to this .... maybe with an A-390 !

[Ian Warren]

QUOTE (Splitpin @ Jun 18 2014,9:20 PM) <{POST_SNAPBACK}>

Im not going to get into the A vs B thing ....its old news , and frankly boring, and i wish it would just go away .

Give me a can of petrol and I'll use no need for matches , I'll turning an element on and wrap a bitta paper up .. Whoof ! ....

[emfrat]

QUOTE (Splitpin @ Jun 18 2014,6:20 PM) <{POST_SNAPBACK}>

Im not going to get into the A vs B thing ....its old news , and frankly boring, and i wish it would just go away .

My sentiments exactly.
Operators are only interested in low seat/mile costs.
That's why spiffy little jets like the Fokker F-28/100 have been replaced with ATRs and Dash-8s - a modern turboprop with a modern propeller uses less fuel.
That's why the airframe you sit in does not belong to the airline you are flying with - it is leased from a company which specialises in that.
That's why you can fly NZ-UK with one airline, and return on another, but propelled by the same engines - they are leased, too.

Aircraft builders make their decisions on how they see the future market, and quite often get it wrong.
Leasing companies also get it wrong.
But there was (possibly still is) a shuttle from Kennedy to La Guardia using 747s - 7 minutes flight time. Lease a couple of A380s to shuttle twice as many pax, and while the flight time will be about the same, the dwell time (load/unload) will be twice as much.

Y'all have a good day now

[cowpatz]

QUOTE (Charl @ Jun 18 2014,8:15 PM) <{POST_SNAPBACK}>

I wanted to see some more of Ben Rich's wisdom, so Googled him, and "Latitudes Unlimited International Maritime & Aviation Consulting."
Danged if it didn't turn up a single result... now that is strange, I can Google "My Left Toenail" and come up with Something.

Funny I got hits straight away.

http://www.linkedin.com/pub/ben-rich/15/b28/44

....and it gets worse for Airbus.

[omitchell]

QUOTE (cowpatz @ Jun 18 2014,10:28 PM) <{POST_SNAPBACK}>

Funny I got hits straight away.

http://www.linkedin.com/pub/ben-rich/15/b28/44

....and it gets worse for Airbus.

"This article is only available to registered Flightglobal users"

Anyways, it gets to the point where you can only build for profitability or scale, you can't do both. Unfortunately Airbus have gambled on a plane that isn't ready for the current market and it's just a big white whale. There is currently no reason to build larger than a 747 or an A340-600, not when cost ratio comes into play. If you can't fill the plane or it costs too much to run, then it's gonna be a bad ratio every time.

[cowpatz]

Yes it is ahead of it's time. When the real push for ATC slots comes deeper into play then it will come into it's own. That is when the more seats per aircraft the better.

[Ian Warren]

Even with the numbers, the idea of the aircraft being more economical than anything, the aircraft in most fleets offered to airlines are just the same...just political porkies

[omitchell]

QUOTE (Ian Warren @ Jun 19 2014,10:03 AM) <{POST_SNAPBACK}>

Even with the numbers, the idea of the aircraft being more economical than anything, the aircraft in most fleets offered to airlines are just the same...just political porkies

Not everything is political Ian.

This was just a bad business move by Airbus, it happens in all companies from time to time. It has however, set Boeing up to recapture the Long Haul sales market again with the 747-8 and 777-x due to their economical and environmental factors and the fact that it both are well known and loved aircraft now set for increased profitability instead of going radical all new plane that just wasn't right for market conditions. Boeing already took that gamble once but were fortunate. If Pan Am hadn't been so popular and TWA hadn't jumped in too, chances are this conversation would have been had 50 years ago about the 747. They were lucky, in this case Airbus are not.

[Ian Warren]

QUOTE (omitchell @ Jun 19 2014,3:08 PM) <{POST_SNAPBACK}>

Not everything is political Ian.

I did mean it that way regard to NZ , I meant that is the reason ANZ bought ARBUSTS .. kissy up and bottom licking, put the price down and that's as simple as that.

[omitchell]

QUOTE (Ian Warren @ Jun 19 2014,2:17 PM) <{POST_SNAPBACK}>

I did mean it that way regard to NZ , I meant that is the reason ANZ bought ARBUSTS .. kissy up and bottom licking, put the price down and that's as simple as that.

Oh yes, I'm sure Airbus' pitch to ANZ was "Oh hey, what do you think John Key would prefer, Airbus or Boeing?" No Ian it was a financial marketing campaign, Airbus had the better pitch to the company than Boeing did so ANZ went with them. Does it make it the right decision, in my opinion no, but that's nothing to do with political reasons. Once again this is business, it happens EVERY DAY...

[Ian Warren]

QUOTE (omitchell @ Jun 19 2014,5:01 PM) <{POST_SNAPBACK}>

Once again this is business, it happens EVERY DAY...

To today's business is politics when its a country owned airline , lie steal cheat , key was not in when ARBUSTS were (nosed) in with Clark decider was back then and its not recent .. go back a decade fact is pilots and ground staff are left to lump it or leave it .