Airbus A380 – is this the end for the superjumbo (already)?

Flight 1 from Heathrow to Kuala Lumpur is Malaysia Airlines’ flagship service. On Tuesday evening, the plane with this flight number that touched down at the capital’s airport was a very new arrival.

In place of the mighty double-decked, four-engined Airbus A380, the aircraft that taxied to the terminal at the end of a 6,600-mile journey was a single-deck twin-jet that had been delivered fresh from the factory in Toulouse only three weeks ago.

The Airbus A350 may be smaller, but according to Malaysia Airlines’ publicity, it offers passengers “a more spacious interior” on the long-haul from London.

Yet the Airbus A380 was made for long-haul routes from London. With a capacity around 500, it can extract the most value from precious slots at Heathrow, the world’s most congested hub.

So why has the Malaysian Airlines carrier downsized? The carrier believes that combination of improved efficiency and passenger appeal will prove more profitable than the superjumbo on its key intercontinental link, and make it better able to compete with British Airways’ nightly Dreamliner service using the Boeing 787.

The airline’s sales team may be quietly relieved, too. In a ferociously competitive market, they have 42 per cent fewer seats to sell on each departure.

For the A380 sales team at the Toulouse HQ of Airbus, last year was not a good year. Airbus had predicted a market for an average of 70 “very large aircraft” sales annually to 2036. At present the only aircraft in this category are the A380 and the Boeing 747-8. But Boeing has predicted a much smaller market, with an average of just 26 sales a year.

Last month the planemaker Airbus delivered a record 127 aircraft. The vast majority were from its highly successful A320 family. Of the 22 wide-bodied planes, a dozen were A330s and nine fresh young A350s. Just one superjumbo was delivered.

According to the maker, the A380 is a “marvel of science and engineering”, and “no other travelling experience comes close”. But the firm’s own spreadsheet reveals net sales last year were minus two: no new orders, and a couple of cancellations.

Only Emirates has demonstrated a strong commitment to the A380: the jet is at the heart of its business model to become people-carrier for the world. The Dubai-based airline has ordered 142, of which around two-thirds have arrived. But at November’s Dubai Airshow, an expected new order for the A380 failed to materialise. Instead, Emirates opted for 40 Boeing 787 Dreamliners.

Shortly before Malaysia Airlines’ new kid in town took off from Heathrow, the bosses at Airbus sounded a warning.

“If we can’t work out a deal with Emirates,” said the planemaker’s top salesman, John Leahy, “I think there is no choice but to shut down the programme.”

Such a move would be deeply humiliating for the European consortium, and an admission that Airbus wasted tens of billions of euros backing the wrong horse. So what went awry with the A380, and is there any prospect that it could come good? These are the key issues.

One careful owner

In the high stakes game of ordering new aircraft, the key unknowable is: a decade from now, what will they be worth?

The launch customer for the A380 was Singapore Airlines. Last summer returned its first superjumbo to the lessor. A 10-year-old, well-maintained jet should have a natural secondhand market. But the aircraft that triumphantly flew from Singapore to Sydney on 25 October 2007 is currently in storage at Lourdes. If a buyer cannot be found, the plane may be broken up for parts.

Until the market establishes a meaningful value for secondhand A380s, airlines and lessors will be disinclined to commit to the superjumbo. And the longer the 9V-SKA (the registration of the launch plane) sits on the ground in south-west France, the more it looks like a dead plane walking.

Too many seats

At a time when aviation is expanding globally at 7 per cent a year, the idea that a plane could have too many seats may seem absurd. Surely it would be far more efficient to replace the motley mix of 757s, 767s, 777s, 787s, A330s and A340s on the London-New York run with A380s, halving the number of flights and freeing up slots? Well, leaving aside the reality that no US airline has expressed interest in the A380, the market on the world’s premier intercontinental air route demands frequency. American Airlines, British Airways, Delta, United and Virgin Atlantic know that the premium passengers who bankroll the link are more interested in the next departure being only an hour away than in the aesthetic appeal of a double-deck jet.

BA, the only one of those carriers with the A380, deploys it mostly on transatlantic routes – but to relatively low-frequency destinations, such as Los Angeles, Miami, San Francisco and Vancouver. (It also flies the superjumbo to Singapore, Hong Kong and Johannesburg.)

You could envisage BA up-gauging some Boeing 747 and 777 routes, such as Dallas and Toronto. The move would cut the cost per seat. But that adds a lot of extra seats to be sold on a wet Wednesday in late January. And all at a time when BA’s Heathrow hub-and-spoke model is already being attacked by budget airlines offering point-to-point options – a model not foreseen a quarter-century ago, when Airbus began looking at a Very Large Commercial Transport.

Too many engines

In 1993, an aircraft of the scale of the A380 could only be conceived with four large engines. In an era when oil was comfortingly below $20 a barrel, fitting two engines on each wing was in vogue – and appreciated by passengers. The four-engined Airbus A340 was about to enter service; when Virgin Atlantic became the launch customer for the A340-600, the stretched version, Richard Branson’s airline promoted it with the slogan “4 engines 4 long haul” – BA’s big rival was the twin-engined Boeing 777.

Today, Sir Richard and just about every other aviation entrepreneur is quite happy with two engines. The fuel burn per seat on the A350 is lower than the A380, while capital and maintenance costs are commensurately reduced.

No prestige premium

Projections for the A380 anticipated inflight shopping malls and gyms, but from the economy passenger’s point of view the reality has been seats, seats and more seats. An unscientific Twitter poll I am conducting suggests about one in three passengers could be more attracted to an airline offering an A380. But the same proportion believe “New planes are better”, and they could switch in the opposite direction. It is telling that Emirates chose to roll out its ultra-luxurious first-class product on a Boeing 777, not an Airbus A380.

Grounds for optimism?

Unless you a first-class passenger on Emirates from Gatwick, you may have noticed the quiet revelation that one of the airline’s three daily departures to Dubai is shortly to change. Same A380, different configuration: no first-class cabin (complete with shower), many more seats in economy, with room for more than 600 (one-third more than on BA). Tickets from the Sussex airport are sold at a discount to those from Heathrow, and this move will help keep fares down. Perhaps the airlines which have installed increasingly elaborate facilities have been looking in the wrong direction; could the answer lie in cramming in many more passengers?

The A380 is certified for 873 seats, but so far no airline has gone for anything like than number. Passengers are seated a maximum of 10 across, though on the main deck it could easily be 11. While that may horrify travellers who see Ryanair-style standards on long-haul flights, it could transform the economics of flying between very large population centres: Hong Kong, Beijing, Shanghai…

Airbus chief executive Fabrice Bregier believes there is huge potential in China for the A380: “We need to convince the airlines that they can increase their market share, that they can increase tremendously their image buying the A380 and operating them from big Chinese hubs.

“The biggest market deserves the biggest aircraft.”

It could happen. The rising star at Airbus right now is the A321. When it first appeared in 1993, the “stretch” of the successful A320 earned little attention and few orders. A quarter-century on, with new engines, the A321 has become the aircraft of choice for airlines wanting to open up long-range point-to-point routes, and is very popular with passengers.

The A380 could take a stretch, increasing capacity beyond 900 and cutting seat costs still further. But first an airline needs to take a chance on secondhand superjumbo jets. Malaysia Airlines has some spare now.

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