Thursday 29 September 2016

The A380: Not such a big deal?

Andrea Rothman

Published 04/05/2015 | 02:30

Loved by the public, but resisted by many airlines, the A380 is struggling to take off with buyers
Loved by the public, but resisted by many airlines, the A380 is struggling to take off with buyers

At the tender age of 10, the Airbus A380 is already entering a mid-life crisis.

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The double-decker aircraft has failed to win a single order from any new airline customer for two years now, and senior management was forced to come to its defence in December after the planemaker's parent introduced the possibility of axing the A380 outright. As the mid-point of the year approaches, the plane has yet again drawn a blank on deals.

It's a far cry from the jubilation in 2005, when the giant took off for the first time, hailed as the star of 21st century aviation.

Airbus said the A380, certified to carry up to 853 passengers, would push arch-rival Boeing out of the monopoly on jumbo jets and herald a new dawn of travel, pairing ultra-luxury with mass transport while easing the strain on congested airports.

"It's true the market hasn't developed as much as we'd have liked," Airbus chief executive officer Fabrice Bregier said last month. "This plane was probably launched 10 years too early."

Mr Bregier is now trying to breathe fresh life into the A380 campaign. Airbus has assembled a team of employees from within sales, marketing, engineering and design to lobby existing and future customers of the aircraft - including those who may buy the plane second-hand.

One possible way to rekindle demand is to fit the aircraft with new, even more fuel-efficient engines, a project championed by Emirates president Tim Clark, who has said he'd be in the market for as many as another 200 A380s should Airbus take the step. For now, Airbus is focused on incremental improvements in aerodynamics and the engines, saying the business case must be clear before investing as much as €2bn to fit new engines.

The lacklustre commercial success lies in part in a misuse of the A380's basic purpose. When introduced, it was touted as the ideal response to crowded skies, with airlines benefiting from scale and better economics by packing in more seats.

Instead, carriers used the vast space to embrace custom extravagances including bars, showers and duty-free shopping zones, turning many A380s more into exotic luxury liners rather than vehicles of mass transportation.

Airbus wants customers to rediscover the A380 as a work horse, encouraging existing and prospective buyers to use denser configurations.

It's already helped Qantas Airways move in that direction and Singapore Airlines is now refurbishing its 19 A380s to add premium economy seats. Emirates, the A380's biggest operator with 60 in use and another 80 on order, plans by year-end to have some double-deckers flying in a two-class layout for 615 seats, stripping out first-class berths.

Since 2000, the A380 has won 317 orders, less than a third of the 1,200 projected in its first 20 years. Not a single US airline has ordered it. The tepid response has haunted Airbus, particularly since the A380 is a hit with the public. The ride is smooth and perks like bars where business-class passengers can mingle have created buzz.

One modest success that Airbus aims to celebrate this year is that it no longer produces each A380 at a loss, though it admits the overall programme itself will never recoup its €22.3bn investment. (Bloomberg)

Irish Independent

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