The Airbus A380 is the largest, most capacious, advanced long-range jumbo jet in history. So far, the 555-seat plane (up to 800 passengers are theoretically possible) is also one of the safest. Yet if it were a person, the big plane might exclaim, like late comedian Rodney Dangerfield, “I don't get no respect, no respect at all!”
For example, no American carriers fly the giant A380. None ever have. And the A380 entered commercial service with lead customer Singapore Airlines just 11 years ago. Yet two of the first A380s in service are apparently are already destined for the scrap heap.
Singapore Airlines got the planes in 2007, on a ten-year lease from Dr. Peters, a German aircraft leasing company. At the end of the lease, the aircraft were repainted and returned to Dr. Peters during the last quarter of 2017. They were stored at an airfield in the French Pyrenees while the company made a concerted effort to find a new operator. Unfortunately, despite reports that the aircraft were bound for Portuguese aircraft operator Hi Fly, a buyer has not been found.
“After extensive as well as intensive negotiations with various airlines such as British Airways, Hi Fly and Iran Air, Dr Peters Group has decided to sell the aircraft components and will recommend this approach to its investors,” the German firm told Reuters on Monday.
The fate of the A380s: cannibalization for spare parts. How did we get here?
There have been many issues with the A380 program, but perhaps the most fundamental is “does anyone really need a 555-seat jumbo jet?” The aircraft is expensive to buy, crew, fuel and operate, but most critically is hard to fill with passengers. In 1995, long before the first prototype, one article asked if there would ever be enough concentrated airline traffic to make a new superjumbo an economic proposition. The title; “Superjumbo or White Elephant?”
As far back as the 1990’s, aviation experts debated whether the future would favor hub-and-spoke or point-to-point airline travel networks. In the hub-and-spoke model, hordes of passengers would fly to a giant “hub” airport (like Atlanta, Chicago O’Hare or Dallas-Ft. Worth in the US or Frankfurt, Heathrow and Dubai internationally). They would then disperse to different gates to fly smaller craft to their ultimate destination.
But even then, the point-to-point model pioneered by Southwest Airlines was already taking hold. While there are operational efficiencies to hub-and-spoke (fewer flights are needed to serve an airline’s destinations; maintenance can be centralized at the hubs) low-cost carriers became very successful flying point-to-point routes. Passengers obviously preferred taking one flight rather than two.
Flying into a hub and transferring to another flight can also raise the risk of delays or even missing your flight. This almost happened to me in 2011 when my flight to Chicago was delayed three hours and I had to sprint through O’Hare to make a Beijing connection.
Since then, fuel-efficient twin jets like the Boeing 787 Dreamliner and Airbus A350ULR have expanded point-to-point flights across the globe. Ironically, Singapore Airlines, the original launch customer of the A380, recently announced direct non-stop service from Singapore to New York, using the far more efficient Airbus A350ULR for the 9500-mile flight.
So far, only the Gulf carriers (Emirates, Qatar and Emirates) seem truly successful deploying the ‘no-respect’ A380. Emirates operates almost half of the giant craft (142 planes), seemingly using it as a club to establish market share in many markets. (Competitors claim the Gulf airlines are heavily subsidized by their governments.) But the A380s do contribute a significant chunk of the 88 million people passing in and out of Dubai Airport (DBX) by far the world leader in international passengers.
Earlier this year there was some optimism for the long-troubled A380 program. Airbus, expecting an order of up to 45 planes, instead struck out at last year’s Dubai airshow. But retiring Airbus super-salesman John Leahy pulled a rabbit out of his hat, inking an Emirates order for up to 36 A380s and $16 billion. Leahy, who retired in February, said he was confident Airbus would get one more A380 order in 2018.
Rumor had it that was British Airways, which currently operates 12 A380s. The carrier may have thought it could operate the A380 as designed, as people-mover flying hordes of passengers to a hub airport (Heathrow) running close to capacity and lacked the ability to add new gates. When masses of Millennials take off this summer, they could be packed on A380s to fly the Atlantic, then on to their European or American destinations on smaller aircraft.
The British flag carrier previously said it was looking for half a dozen used A380s, but in January sources told Bloomberg that the airline might instead take up to a dozen new jumbos. As BA flies a four-class configuration that seats 469, revamping older planes might be too time-consuming and costly.
But BA’s buying frenzy seems to have faded. The owner of British Airways (and Iberia), IAG SA, has reportedly grown frustrated with Airbus and its seemingly endless list of delivery delays and engine issues. Although it’s well-known that airline customers never pay the list price for an A380, currently about $446 million, pricing is also an issue. In May, IAG chief Willie Walsh said BA was not currently trying to make an A380 deal. “The pricing that Airbus has offered in the past is unacceptable to us. …if they want to sell A380s they need to be aggressive on pricing,” he said.
The fact that a market for used A380s has so far failed to materialize is a major Achilles heel. And with low demand, the long-ago collapse of efforts to build an A380 freighter also hurts. The unexpected robustness of freighter orders is the only thing keeping the A380’s ancient rival, the 747, in production.
So just a decade after their debut, the first A380 jumbos are to be broken up. With the headwinds facing the A380 program, how long will it be before the rest head to the scrapyard?
