The A-380 — COVID-19’s biggest casualty?
The biggest casualty of the COVID-19 pandemic gripping the world is likely to be the flagship of Airbus’s stable — the giant A-380.
Air France has announced it will decommission its entire fleet of nine A-380s and plans to conduct a ‘farewell flight’ on 26 June 2020 for the giant aircraft. At the moment, not a single one of the 242 aircraft delivered to customer airlines is flying anywhere in the world. One example, belonging to China Southern Airlines recently completed a number of flights a few weeks ago, but that appears to have been the only one in recent use. Some A-380s were employed in repatriation charter flights, but that too has not occurred recently.
Air France was the fourth airline to introduce the A-380, and the first to confirm that it will permanently retire its entire fleet. Lufthansa has stated that six of its fourteen A-380s, along with five Boeing B-747s and seven Airbus A-340s, will be made obsolete. The remaining eight will be ‘mothballed’ and not expected to fly for at least two years.
British Airways has placed all 12 of the type in long-term storage. Etihad Airways and Qatar Airways have also grounded their A-380 fleets and do not appear to intend operating the type anytime soon.
Singapore Airlines had already returned two of 24 A-380s it had to the lessor at the end of the lease. The remaining 22 aircraft in its fleet are due for a cabin refurbishment. Qantas with 12 examples and also an early user of the double-deck ‘superjumbo’, has undertaken large-scale refurbishments of the interiors of their older A-380s prior to the pandemic too. In such instances, a bill of over USD 20 million per aircraft would not be excessive. Whether this will compel them to keep operating those aircraft post-COVID remains to be seen, but for now both these airlines have parked their A-380s too.
The last holdout
Emirates, the world’s largest operator of the aircraft is going to be the hardest hit. Dubai’s congested airport was the reason why Emirates huge fleet of A-380s worked so well pre-COVID. The giant machines would fly in from the farthest parts of the world in four connecting ‘waves’ of arrivals and departures, allowing multiple daily flights to many major cities.
With its luxurious premium cabins garnering a loyal following in more affluent markets, plus a huge network of economy passengers from less wealthy customer segments filling the ‘lower deck’, the two-tier product was a perfect fit for Emirates. In the context of mass-tourism, Emirates showed that the A-380 filled an unique niche.
Post-COVID it is hard to say when this sort of traffic will resume. The economic concerns apart, the patchwork nature of travel restrictions may make it very hard to consistently fill the 500-odd seats in an A-380 on a daily basis. Emirates entire A380 fleet is currently grounded in Dubai and the airline’s President Sir Tim Clark flatly stated, “….the A-380 is dead” in a recent interview. But he has also gone on record that the airline expects to operate the aircraft again, a seemingly contradictory stance.
The sweeping redundancies in its workforce (reported here) has meant that around 25 sets of A-380 pilots have been let go. This gives the impression that even when the world’s largest operator of the aircraft starts flying it again, it will never return to full strength.
The last factory built A-380 (for Emirates of course) is due to be delivered late in 2021. But even this is in jeopardy, with reports indicating the airline is negotiating to cancel the remaining orders which would mean production could cease early.
What happened to the dream of the ‘Uber-plane’?
When Airbus began developing the concept of a massive airliner, dubbed the ‘A3XX’ project, the world was a different place. At the time the project was launched in 1999, jet fuel, which accounts for between 15 to 30% of an airline’s expenses, was at a generational low. The airline business was booming and Boeing was the undisputed leader in the airliner game. With an entire stable of aircraft topped by its venerable B-747, the Seattle, Washington-based manufacturer was firmly at the top of the tree. Airbus was the upstart — trying to find a niche for itself while battling the US giant. Determined to have a complete ‘suite’ of airliners too, Airbus’s management decided to launch a rival to the B-747.
Boeing was skeptical. Their forecasts showed a totally different market projection and they were not keen on updating the B-747. Finally they did so reluctantly, launching the B-747–800. But the real focus was on creating the B-787 Dreamliner — a twin-engine mid-size airliner designed for a more fragmented market.
Emirates Airline, then an upstart too, was an enthusiastic customer for the Airbus A-380, being the first to announce an order in April 2000. Air France, Singapore Airlines, Qantas and Virgin Atlantic would follow the same year, showing initial enthusiasm for the type.
Lufthansa and Qatar Airways joined the ‘A380 club’ shortly thereafter, Federal Express ordered the freighter version, and Emirates tripled its A380 order. Airbus was delighted; the flagship was going to fly.
Tellingly though, the major aircraft leasing companies who are the primary buyers of new airliner types, were very cautious in placing orders for the A-380. Only one, Air Lease Corporation (ALC) headed by the legendary Steve Udvar-Hazy, initially placed a small order. But this was cancelled before any deposit was payable — it was obvious that the market was more skeptical than Airbus.
More complicated than they thought
Flight testing and then producing an aircraft of this complexity, proved to be much harder than even Airbus had imagined. Innumerable delays dogged the program, and the A-380 missed many delivery milestones. The complex nature of the airliner market means that excessive delays allow customers to cancel orders with few penalties. As Airbus missed many projections on the delivery timeline, customers began having second thoughts about the viability of the giant, double-deck aircraft.
The aftermath of the World Trade Center attacks in September 2001 dented the confidence of many airlines, just as the A-380 project was launched. The US-led invasion of Iraq sent oil prices to a new all-time high. Oil prices reached a peak of almost USD 150 a barrel of oil in 2007, concurrent with the A-380 approaching ‘entry into service’. The global financial crisis of 2008 further dented customer confidence, and cancellations started pouring in. ALC cancelled the only lessor order, Virgin Atlantic delayed theirs and Federal Express cancelled the freighter version completely — killing off any chance of a cargo variant of the A-380.
Entry into Service
The Airbus A-380 was triumphantly and flawlessly launched into service with Singapore Airlines in October 2007, becoming an instant customer favorite. Airbus’ ‘super salesman’ John Leahy confidently forecast demand for over 1,300 aircraft in the ‘very large’ category which included the B-747–800 and the Airbus A-380.
But the writing was already on the wall. Jet fuel prices were at an all-time high. The A-380 which could weigh up to 570,000 kg when fully loaded with passengers, cargo and fuel, would burn over 13,000 kg of fuel every hour. An empty A-380 with no fuel, passengers or cargo on board, still weighed in excess of 300,000 kg.
By contrast, arch-rival Boeing’s B-787 Dreamliner had a maximum weight (full of passengers and freight) of around 239,000 kg, with its two engines burning about 5,000 kg an hour. The contrast was obvious — in a world of high fuel prices, the Airbus ‘Uber plane’ was just too heavy and thirsty.
For an new type to have a life of just 13 years from inaugural flight to first complete grounding is unprecedented. No doubt the pandemic played a huge part in this outcome.
An exercise in hubris
The A-380 has proved to be an expensive learning experience for Airbus Industrie. By late 2019 Airbus had finally established itself as the major player, holding a greater market share than Boeing for the first time in their decades long rivalry.
However, Boeing’s future forecasts have turned out to be more accurate than those of Airbus, with the B-787 proving to be the modern aircraft of choice for airlines. The 1,400 orders for the B-787 against 890 for its Airbus counterpart, the twin-engine A-350, is a fact that speaks for itself. The list price of the B-787 is significantly less than its Airbus rival, but production is sold out for many years. This may allow the A-350 to claw back some share of the market, depending on how the industry fares post-pandemic.
How Airbus will account for the huge development cost of the A-380 (estimated at over USD 16 billion) remains to be seen. It is obvious that the 240-odd firm orders will barely pay the costs of producing the aircraft. The research and development expense will have to be absorbed by profits on other aircraft types in the stable. With both production and sales in disarray with the pandemic though, this may take decades to achieve.
This writer, who flew the aircraft for many years, hopes that the A-380 will continue to delight passengers for a long while. But it will almost definitely be the last ‘mega project’ that takes to the skies. The jet airliner changed the world in ways no one could foresee just a few decades ago. The COVID-19 pandemic, which at the time of writing shows little signs of abating, will change the world and the travel industry in ways we cannot foresee too. Whether this will leave the Uber-plane with a viable future, must remain an open question.