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Consolidated "Airbus 380 - problems and discontinuation" thread

Consolidated "Airbus 380 - problems and discontinuation" thread

Old Aug 11, 2014, 8:15 am
  #46  
 
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The A380 and B787 are both niche aircraft. They serve entirely different niches, and because of that, they will both succeed in the long run. As others have mentioned, the A380 will replace 747's, while the 787 will replace 762-764 and 757 aircraft, which are becoming more and more legacy every year.

Where I believe Airbus will go wrong is with the A350. It will be harder for this aircraft to compete with the smaller (220 seat capacity) and equally (if not more) efficient and equally range-worthy B788. Airbus was late into this market, and I believe the A350 is too large of an aircraft. Short term, the A350 will bust, as the 777 fleet is not that old... but when it comes time to replace those, the A350 will be a good choice, but they will be competing with B787-9's and 10's too.
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Old Aug 11, 2014, 8:25 am
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Originally Posted by agp423
For those who have flown on the Dreamliner... one of its selling points was the pressurization and humidity control and how it makes passengers less fatigued after the trip. How does the pressurization and humidity compare to the A380? I flew on the A380 on two legs recently (one 12 hours, one 5 hours) and the 747 (13 hours) and I must say, the 747 air was very very dry...
I feel good on both the 787 and the 380. I have a lot more flights on the 380 than the 787 so it's hard to make a good comparison, but definitely the lesser noise and the better (than 767/330/340) pressurisation and humidity are noticeable on the 380.

It may be a commercial failure (doubtful) but it's certainly a passenger success. Given the way it's been rolled into service with most airlines that are flying the 380, more people go out of their way to book ON to the 380 than to book AWAY from it.
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Old Aug 11, 2014, 8:28 am
  #48  
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Originally Posted by orbitmic
The truth of the matter is that there is a small but crucial market for very large capacity aircrafts to fly some trunk routes, and the A380 is capturing the vast majority of that market.
It is quite true that the VLA market is (in terms of number of airframes) far smaller than the long-thin-twin market, and Airbus and Boeing have thrown two similar aircraft at the VLA niche in unproductive fashion (much like the L-1011 and the DC-10 were both thrown at the soon-to-be-extinct widebody trijet market in the 1970s) but the A380 has decisively beaten the 748. Airbus may make money on its entry; Boeing never will.

Originally Posted by rapidex
The US carriers have not flocked to buy the B748 either.I would bet that the only major carrier to order,Lufthansa ,also got a discount of around 50% to list price.
The remaining US majors have no interest in a VLA because they are not built like the top ME, Asian, or European carriers -- e.g. emphasizing long-haul services to and through a single mighty superhub. EK has DXB, CX has HKG, BA has LHR... but UA launches longhaul flights from EWR, IAD, ORD, IAH, DEN, and SFO. Decentralized network; smaller planes.

The case for the VLA will strengthen slightly throughout the 21st century as those superhubs catch "LHR flu" and tighten up slotwise, but not fast enough to lead to an A380 production run of 1000 aircraft. Anyway the more efficient response will be to ramp up the long-thin-twin alternative routes that circumvent the superhubs, not go out and buy a bunch more A380s.

The only possible, slight business case for a Stateside A380 would be as a dedicated Pacific subfleet based at SFO for UA or SEA for DL, but the costs of operating a few narrow-mission aircraft in that fashion -- an aircraft inappropriate for any other application on the airline's system -- would probably outweigh the benefits.
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Old Aug 11, 2014, 9:06 am
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Absolutely it is a failure from a commercial perspective but a success from an engineering one. It will go down as white elephant because the two dominant air travel markets, America and China will not purchase the plane. A 50% discount on the aircraft is why Emirates would purchase the plane, it becomes highly costs effective at that price.
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Old Aug 11, 2014, 9:09 am
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Originally Posted by pasha13
Absolutely it is a failure from a commercial perspective but a success from an engineering one. It will go down as white elephant because the two dominant air travel markets, America and China will not purchase the plane. A 50% discount on the aircraft is why Emirates would purchase the plane, it becomes highly costs effective at that price.
No US carrier was ever going to buy the A380.
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Old Aug 11, 2014, 9:14 am
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Originally Posted by tmiw
I don't get the feeling that US carriers prefer Boeing. Most of the LCCs seem to fly all Airbus (Spirit, Virgin America, etc.) for example.
I guess Southwest doesn't count? They are flying over 600 Boeing 737s and have around 500 more on order or option.

Originally Posted by AddictedTraveller
Its nearest competitor the 747-8 has had an even worse time in the market, and really hasn't seen any decent take up at all.
They have delivered 72 747-8 aircraft. The total orders are 120 thus far.

While not wildly successful as a passenger aircraft, it is doing very well as a cargo carrier. Of the 120, 69 are cargo aircraft and you can expect the ratio to increase on the cargo side of the equation as time goes by.

Keep in mind that the first delivery of a 747-8 was not until October 2011.

Originally Posted by alphaod
I wouldn't call it an catastrophe and it's quite an beautiful aircraft.
Sorry, but I find the A380 to be one of the ugliest airplanes ever built. I will concede, however, that the Shorts 360 is worse.
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Old Aug 11, 2014, 10:15 am
  #52  
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A couple of factors that will hurt the A380s financial ( vs. accounting) breakeven are the initial investment costs and the initial sales. IIRC, the development cost for the programme ballooned from something like $4bn to $10-11bn, and then you had the delivery misaligned-wiring delays because someone at Airbus did not upgrade the Dassault design software to the same version. Early orders were reportedly being given 40% off the $250m list price in the very early 2000s so that's a loss of capital recovery of $100m off each early frame (I think the first 50-100). That would extend the breakeven substantially if you consider time value of money (albeit lower these days, it's still higher for shareholder capital than interest rates at the bank).

Note that Boeing is equally hurt by the 787's lengthy delayed development and delivery but there are more frames to make up this early loss.

One other thing, mentioned on A.net, is resale. The first frames are going to be coming up to their major checks in the next few years. There's pretty much no conversion value unlike for other a/c.
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Old Aug 11, 2014, 10:26 am
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The first round of "used" a380s will hit the market within the next 2-3 years when SQ starts dumping their 2007-era whales. It will be very interesting to see what happens to those. A friend of mine in the airline industry surmises that freight companies will be the biggest potential buyers of secondhand a380s, though my sense is that they are too expensive to operate for that to be the case.
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Old Aug 11, 2014, 10:31 am
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Originally Posted by Always Flyin
I guess Southwest doesn't count? They are flying over 600 Boeing 737s and have around 500 more on order or option.
US LCCs tend to standardize on either the 737 or the A320 family. The differentiator seems to be simply that airlines which were in business prior to the existence of the A320 picked the 737, and airlines established later have picked the A320.
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Old Aug 11, 2014, 11:18 am
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Originally Posted by zcat18
The first round of "used" a380s will hit the market within the next 2-3 years when SQ starts dumping their 2007-era whales. It will be very interesting to see what happens to those. A friend of mine in the airline industry surmises that freight companies will be the biggest potential buyers of secondhand a380s, though my sense is that they are too expensive to operate for that to be the case.
Too much reinforcement of floors needed. Lots of wasted space and difficult to reach the top deck too. Really doubt there will be any value.
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Old Aug 11, 2014, 11:25 am
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Originally Posted by relangford
Airbus knew, going in, that there would be a limited number of sales of the whale. There are many reasons, including the wingspan and other considerations. Boeing had long discussions of going with a revamped B747 having a larger upper deck or with a new double-deck design; they chose neither. The two companies decided on different strategies for four-engine aircraft: Airbus with the A380 and Boeing staying largely out (the B747-8i is having some sales). I seem to recall that Airbus originally said they needed to sell something like 350 - 450 of the A380 to break even (I might be off - being old with weak memory, but there is a number). According the airfleets.net, they are at about 166 with some more for the future. If the A380 is produced long enough, it MAY break even, but I suspect it may not. Consider that Boeing has sold over many times that number of B474s, although over many years. Airbus does have the advantage of European taxpayer support in their commercial line.
I think people are giving too much weight to the "50% below list price" from the article. It's come up here on FT a number of times that aircraft usually sell 40-50% below the list price so they can make customers feel good about their orders haha.

I don't think it's out of the question that they will sell 350-450 planes; they've got 318 firm orders to date and 28 options (for a potential total of 346 planes) thus far. The plane was only introduced to service at the end of 2007 -- for comparison the 777 entered production in the early to mid 90s. I'd say there's pretty good chance they'll come out either even or ahead on this bird.

Originally Posted by YVR Cockroach
Too much reinforcement of floors needed. Lots of wasted space and difficult to reach the top deck too. Really doubt there will be any value.
I was always curious why they scrapped the 388F; Wikipedia cites "production delays".
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Old Aug 11, 2014, 11:30 am
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Originally Posted by pasha13
Absolutely it is a failure from a commercial perspective but a success from an engineering one. It will go down as white elephant because the two dominant air travel markets, America and China will not purchase the plane. A 50% discount on the aircraft is why Emirates would purchase the plane, it becomes highly costs effective at that price.
Wrong on several counts. The A380 was never intended for the US or Chinese air travel markets, it was designed for global superhub-to-superhub operations and as a counter to superhub congestion. And the aircraft's purchase/lease price does not dominate the analysis of whether it can be operated cost-effectively.

Originally Posted by Always Flyin
I guess Southwest doesn't count? They are flying over 600 Boeing 737s and have around 500 more on order or option.
With its rising CASM and fares pegged at or above those of the network carriers, it's debatable whether WN still counts as an LCC.
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Old Aug 11, 2014, 11:30 am
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I will withhold judgement

Until I am seated in F, private cabin with sliding doors, etc. after my shower at 37K feet. Let you know then.
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Old Aug 11, 2014, 11:40 am
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Originally Posted by China Clipper
To your second point, there's a legal limit on how wide automobiles may be. And ships are most definitely designed and built wider than the Panama Canal...one of several reasons the canal is being widened. FWIW..
You don't see a lot of Silverados or Suburbans in European cities because they don't fit well. It isn't a matter of law, it's a matter of feasibility. It's hard to justify the investment for new roads (or runways) for few big cars (or planes)
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Old Aug 11, 2014, 11:43 am
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Originally Posted by arcticbull
I think people are giving too much weight to the "50% below list price" from the article. It's come up here on FT a number of times that aircraft usually sell 40-50% below the list price so they can make customers feel good about their orders haha.
I do dare question if an A380 can be built profitably (i.e., recovering development costs) at $150mm. The list price is ~$400m now so 40% off is the old list price. The 40% off $250m was well into the commencement of commercial service IIRC. Might pay the cost of construction but not very much of if any programme profit.

I don't think it's out of the question that they will sell 350-450 planes; they've got 318 firm orders to date and 28 options (for a potential total of 346 planes) thus far. The plane was only introduced to service at the end of 2007 -- for comparison the 777 entered production in the early to mid 90s. I'd say there's pretty good chance they'll come out either even or ahead on this bird.
The sheer size of the a/c limits the number of potential sales. I'd wager the bulk of any further sales would be to replace early frames. Old frames would probably end up cheap at the hands of charters for Hajj and other such travel. The 777 programme has benefited from major product upgrades such as the -300ER and -200LR, and even -200ER. The A380-900 stretch might breath some life and further orders, but the increased size may limit potential sales even more.

I was always curious why they scrapped the 388F; Wikipedia cites "production delays".
Lost all the orders from UPS and FedEx, IIRC. There are no (serious) orders for the A380F. I think UPS and FedEx had a long, hard look at the A380F and backed out when they could.
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