This story is produced in partnership with PaxEx.Areo - The Business of Passenger Experience
It is huge. It is (generally speaking) more comfortable for passengers. It is spectacularly quiet on board. And as of 2021 no more will be built. Airbus confirmed today that it will finally halt production of its A380 super jumbo in two years, once the final 17 frames are delivered. The move comes after reaching an agreement with Emirates to slash the carrier’s order backlog.
While production comes to an end this does not mean a full retirement of the type. The A380 will continue to fly passengers for at least a decade.
The A380 is not only an outstanding engineering and industrial achievement. Passengers all over the world love to fly on this great aircraft. Hence today’s announcement is painful for us and the A380 communities worldwide. But, keep in mind that A380s will still roam the skies for many years to come and Airbus will of course continue to fully support the A380 operators. – Outgoing Airbus CEO Tom Enders
Emirates will take delivery of 14 more super-jumbo aircraft through the next two years, bringing its total to 123 of the type, down from a peak of 162. In exchange for trimming the 29 A380s from the order book Emirates agreed to add 30 A350 and 40 A330neo orders. Even with the cut Emirates will represent a full 50% of the A380 operating fleet. The most recent order for 20 more frames, reached in early 2018, collapsed as the carrier could not agree with engine supplier Rolls Royce on an updated model for those aircraft.
The per-passenger cost on board was always a prime selling point for the A380. And the numbers are great, so long as the plane is full. Finding enough markets to support those volumes, however, proved elusive. Especially as more efficient twin-engine aircraft come online and more airlines try point-to-point service rather than hub-and-spoke.
For the past several years Airbus floated various tweaks to improve the economics of the A380.
— John Walton 🏳️🌈 ✈️ 💺 (@thatjohn) April 14, 2015
An 11-abreast option in economy would add 40 or so seats on board. Aircraft leasing giant Amedeo wanted 20 of the type in a high density configuration for charter and LCC markets. Alas, the mockup Airbus produced in 2015 of that layout was poorly received.
Read More: Qantas to “flex” A380 cabin
A new winglet was suggested to improve fuel efficiency while a variety of other changes to the cabin interior were pushed to increase capacity. New stairs, consolidated crew rest and other factors were all floated. All would decrease the cost per seat flown (CASM/CASK) but not enough for Emirates or any other airline to consider sufficient.
Enders noted in the company’s briefing that those reengineering efforts came up short in the market. “With measures like re-engining or stretching we would not be able to find additional customers….The response from the market was, to put it mildly, very weak. We had no other choice. If you have a product that nobody wants any more or that you have to sell below production cost you have to stop it.”
In the end, it was simply too much airplane to make new purchases viable without a new engine option. And that new engine is not to be, certainly not for just a couple dozen new frames.
A marketing blitz
For its part, Airbus launched spectacularly creative marketing around the A380 in an effort to drive passenger affinity and, ultimately, additional aircraft orders. The IFlyA380 campaign included a super jumbo flying billboard.
It also included a dedicated metasearch engine for travelers to seek out planes operated by the type. Airbus also coordinated with loyalty programs to launch bonus points campaigns tied to the type. It all came up short. Even as passengers rave about the on-board experience an insufficient number are willing to pay a premium for that quality. And with so many seats on board that financial disconnect only grew.
Flying for some time to come
Even with the news that A380 production will end in 2021 the aircraft are expected to fly for some time to come. Qantas will continue with its fleet retrofit program, for example. Air France will retire some of its A380s but keep others flying. The secondary market for the type proved spectacularly limited but Portuguese charter operator Hi Fly has its A380 in service.
Read More: The Hi Fly A380 is real!
And Emirates is not the only carrier yet to take delivery of new A380s. Japanese carrier ANA expects to take three of the planes this year for Hawaii service. The company inherited that order when it acquired Skymark in 2016. That deal was driven in large part by the slot portfolio Skymark held at Tokyo’s Haneda Airport. The A380 order sat on Skymark’s books and taking it over was key to securing approval of the deal given Airbus’s stake as a creditor.
Passengers will have the opportunity to fly on A380s well into the 2030s as things stand today. Still a short run for a massive aircraft program, but not leaving the skies any time soon.
Shoring up the business
While the move secures the program as a loss-making endeavor for Airbus it also provides closure for the company. Most of the economic impact had been previously recorded on the books and today’s news shifts a large chunk of future revenue to the more profitable A350 line. It also gives a boost to the A330neo’s potential fortunes. Which is not to say that it is necessarily good news financially for Airbus, but it has greater upside looking forward.
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