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Probable A380 Program Termination This Week - No last minute BA Order

Probable A380 Program Termination This Week - No last minute BA Order

Old Feb 13, 2019, 8:40 am
  #61  
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Originally Posted by lost_in_translation
IAG's yields will be weighed down quite a bit by Iberia and Aer Lingus, so as you say a straight LH vs. BA comparison would be interesting. For 2017, LH Group 'network airlines' (LH, LX and OS) are 85% of passenger revenue (ignoring the logistics segments, etc.) with the remaining 15% being Eurowings et al. For IAG, BA was only just over 60% of passenger revenues, with EI and IB presumably targeting higher yields than Eurowings but nowhere near the level of LH, LX and OS. VY is obviously in the Eurowings bucket.
With the caveat of not being an expert on this, I had a quick look at the latest annual reports.

BA's 2017 annual report (y/e 31.12.2017) gives a figure for passenger revenue per RPK of 7.51 pence (page 6, PDF page 9)
LH's 2017 annual report (y/e 31.12.2017) gives a figure for network airlines (LH, LX, OS) passenger revenue per RPK of 9.9 cents (page 43) - the individual LH, LX and OS figures do not state the yield for each airline

Using the exchange rate as at 31.12.2017, I make the LH group network figure 8.79 pence.

Those figures convert to 10.15 USD cents and 11.88 USD cents respectively. Although this is a pretty crude way of approaching things, this suggests that the gap between BA and the LH group network airlines is (as one would expect) a bit smaller than the gap from the IAG group number.
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Old Feb 13, 2019, 9:06 am
  #62  
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Originally Posted by Dr. HFH
Anyone know if Airbus made their investment back on the 380? If not, then EK's heavy reliance on the aircraft and the resulting optimism at Airbus may have prevented Airbus from pulling the plug earlier, which might have saved them some money.
A recent "commentary" article in Aviation Week & Space Technology states they have not. The AW&ST article further states the longer the A380 production line stays open, the loss incurred by Airbus will just get worse with every additional aircraft that is manufactured.

https://www.aviationweek.com/commerc...d-a380-program

Last edited by jlemon; Feb 13, 2019 at 9:19 am Reason: added link to AW&ST article
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Old Feb 13, 2019, 11:24 am
  #63  
 
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Originally Posted by flatlander
Slightly off the EK topic, it does not surprise me that the EK's passenger yields are low but that Cathay Pacific's passenger yields are so low.
They're a bit stuck, they have the ME3 attacking their Europe market share and the revamped Americans attacking their NA market share, but the big one is the mainland Chinese airlines attacking them everywhere. SQ are sufficiently far away to avoid being a natural competitor for that last one.

They've also made some terrible internal decisions in an effort to increase the numbers of local Chinese staff within the company.
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Old Feb 13, 2019, 11:50 am
  #64  
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Originally Posted by 1010101
SQ are sufficiently far away to avoid being a natural competitor for that last one.
However, SQ has been fighting its own battles against the same forces. One of the interesting things to see from that graph was the stabilisation of SQ's yields.
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Old Feb 13, 2019, 12:10 pm
  #65  
 
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It is sad, because I like the A380, even in Y. I have flown EK many times and tomorrow I'll fly again to AMS-DXB-BNE, both A380 flights. Maybe my last 380 flight ?? Or will EK (and the other A380 airlines) keep them for several years for a few high density connections ?
But I hear that the 787 and 350 are lovely airplanes as well, I have never been inside these.
Isn't it ths case that the reason EK canceled because of the engines are not efficient enough ? Maybe sometime in the future, airlines can get an engine upgrade, or do I think too simplistic ?
I understand that 777X / 787 / 350 are more versatile, more suitable for point to point connections than an A380.

On the other hand, EK complains about fuel efficience which is not as good as the 777 / 787 / 350, but why do they make so many fuel inefficient ULH flights for which they even sacrifice 24 Y seats in the rear for a rest area for a spare crew ?
Why don't they fly to Australia / NZ with a single stop in Asia instead of nonstop ? Two hours longer, but less fuel consumption.
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Old Feb 13, 2019, 12:20 pm
  #66  
 
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Originally Posted by airsurfer
Why don't they fly to Australia / NZ with a single stop in Asia instead of nonstop ? Two hours longer, but less fuel consumption.
Because their entire business model is based on offering efficient 1-stop connections through DXB. That's how they have taken such a huge slice of the market.

As it happens they do retain a few stopping services via Asia, but those are being reduced. Many pax who book those stopping services actually do so without realising.
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Old Feb 13, 2019, 2:10 pm
  #67  
 
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Originally Posted by airsurfer
It is sad, because I like the A380, even in Y. I have flown EK many times and tomorrow I'll fly again to AMS-DXB-BNE, both A380 flights. Maybe my last 380 flight ?? Or will EK (and the other A380 airlines) keep them for several years for a few high density connections ?
The A380 isn't going to stop flying anytime soon, at the earliest we'd see a significant reduction in A380 service around 2030.
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Old Feb 13, 2019, 2:35 pm
  #68  
 
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Originally Posted by airsurfer
Why don't they fly to Australia / NZ with a single stop in Asia instead of nonstop ? Two hours longer, but less fuel consumption.
Historically this is exactly what EK did. The problem is that from Europe two stops is very unpopular. It results in 3 roughly 7-8 hour sectors which means that you get very little rest over the journey. It also increases the crewing costs as they would have to slip the crew at the enroute point.
Many years ago I did LGW-DXB-SIN-BNE on EK in F and while it was very comfortable it was an exhausting journey. But it was 1000 cheaper than business on CX which in turn was quite a bit cheaper than BA/QF.
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Old Feb 13, 2019, 3:08 pm
  #69  
 
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Originally Posted by airsurfer
It is sad, because I like the A380, even in Y. I have flown EK many times and tomorrow I'll fly again to AMS-DXB-BNE, both A380 flights. Maybe my last 380 flight ?? Or will EK (and the other A380 airlines) keep them for several years for a few high density connections ?
But I hear that the 787 and 350 are lovely airplanes as well, I have never been inside these.
Isn't it ths case that the reason EK canceled because of the engines are not efficient enough ? Maybe sometime in the future, airlines can get an engine upgrade, or do I think too simplistic ?
I understand that 777X / 787 / 350 are more versatile, more suitable for point to point connections than an A380.

On the other hand, EK complains about fuel efficience which is not as good as the 777 / 787 / 350, but why do they make so many fuel inefficient ULH flights for which they even sacrifice 24 Y seats in the rear for a rest area for a spare crew ?
Why don't they fly to Australia / NZ with a single stop in Asia instead of nonstop ? Two hours longer, but less fuel consumption.
Engines often get an upgrade to make them more fuel efficient. It's certainly part of RR's sales method (assuming they can made fan blades that don't corrode!) On average, fan blade / engine improvements improve fuel efficiency by approx 1% per year. Therefore it's fairly easy to sell an upgrade as that 1% can save a lot of cash. However I would think that the big jump in fuel efficiency is with composite materials of the 787 / 350. The A380 also has the disadvantage of 4 engines too, which is where the newer 777 beats it.


T
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Old Feb 13, 2019, 10:27 pm
  #70  
 
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Now Airbus has confirmed it.

Still some deliveries out to 2021.

Hopefully the plane has some decent life expectancy so we can still fly it for 15 more years after.

Airbus and Emirates reach agreement on A380 fleet, sign new widebody orders
  • Emirates to reduce its A380 orderbook by 39 aircraft
  • Orders 40 A330neo and 30 A350s
  • Last delivery of A380 scheduled for 2021
Following a review of its operations, and in light of developments in aircraft and engine technologies, Emirates is reducing its A380 orderbook from 162 to 123 aircraft. Emirates will take delivery of 14 further A380s over the next two years. As a consequence and given the lack of order backlog with other airlines, Airbus will cease deliveries of the A380 in 2021.

Emirates has also decided to continue growing with Airbus’ newest generation, flexible widebody aircraft, ordering 40 A330-900 and 30 A350-900 aircraft.

“As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years. This leads to the end of A380 deliveries in 2021,” said Airbus Chief Executive Officer Tom Enders. “The consequences of this decision are largely embedded in our 2018 full year results”.

“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,” Tom Enders added.

“The A380 is Emirates’ flagship and has contributed to the airline’s success for more than ten years. As much as we regret the airline’s position, selecting the A330neo and A350 for its future growth is a great endorsement of our very competitive widebody aircraft family,” said Guillaume Faury, President of Airbus Commercial Aircraft and future Airbus CEO. “Going forward, we are fully committed to deliver on the longstanding confidence Emirates is placing in Airbus.”

Airbus will start discussions with its social partners in the next few weeks regarding the 3,000 to 3,500 positions potentially impacted over the next three years. However, the ongoing A320 ramp-up and the new widebody order from Emirates Airline will offer a significant number of internal mobility opportunities.
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Old Feb 13, 2019, 10:31 pm
  #71  
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ttps://www.cnn.com/2019/02/14/business/a380-airbus-news-emirates/index.html

But the program termination is confirmed by Airbus directly in the third para above.

Last edited by percysmith; Feb 13, 2019 at 10:58 pm
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Old Feb 13, 2019, 10:56 pm
  #72  
 
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A sad day

http://www.bbc.co.uk/news/business-47231504
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Old Feb 13, 2019, 11:04 pm
  #73  
 
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That yield graph strikes me as quite odd, as 2015 is when yields drops, yet that is also when oil prices crashed. Fuel should have been much cheaper in 2015-and again in 16 than in 2014, which should have boosted yields. Or was there a proportionately greater loss of customers in the oil and gas markets than was made up for in lower fuel costs?
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Old Feb 13, 2019, 11:22 pm
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Originally Posted by Jagboi
That yield graph strikes me as quite odd, as 2015 is when yields drops, yet that is also when oil prices crashed. Fuel should have been much cheaper in 2015-and again in 16 than in 2014, which should have boosted yields. Or was there a proportionately greater loss of customers in the oil and gas markets than was made up for in lower fuel costs?
Airlines hedge against oil price changes so it's possible that any major downshift in oil prices has a 1-2 year delay in reaching their bottom line (conjecture, no avtuac insight into this)
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Old Feb 13, 2019, 11:26 pm
  #75  
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Official Announcement - A380 Production to End in 2021

https://www.airbus.com/newsroom/pres...dy-orders.html

Emirates to take only 15 more frames but orders large number of A330 NEO and A350

Wonder if BA will order any as an end-of-line top-up. As mentioned earlier in the thread, WW has frequently said BA could use more of them, but not at the price Airbus is asking.
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