Last year BA walked away from a deal with Airbus for A380’s that, as Willy Walsh claimed at the time was simply too expensive.
More details have now emerged, that the deal was for a combination of new and refurbished A380’s that would have doubled the current BA fleet to 24.
So why didn’t it happen, and more to the point what does it mean for the used A380 market which is going to grow substantially over the next 5 years?
The A380 was made for airlines like British Airways. Based at a super-congested hub, and mostly flying to equally as congested hub airports, that’s what the A380 was designed for and in BA’s case it works, and it works really well.
The 777-9 was on offer from Boeing with an almost identical passenger capacity – BA could have changed the configuration of the A380 to carry more but that doesn’t fit its product offering.
So with a preference for the A380, Airbus were asked for a set of proposals for 12.
While the exact unit cost isn’t discussed, Alex Cruz CEO of BA said yesterday, “it wasn’t even close” to what Boeing were offering the 777-9 at.
The issue was refitting the interiors to BA standard on the used aircraft, no matter which airline previously had the aircraft. The simple fact was that the average cost was around $40 million per aircraft, some as low as $30 million, some as high as $50 million. The lease cost and charges plus the running costs on older aircraft, coupled to the cost of the new aircraft, simply didn’t make financial sense against the 777-9.
So BA walked away.
The question is what does this mean for Qatar, Emirates, Lufthansa and AirFrance A380’s, due to be retired in the coming 5 years and onwards?
The answer is already lying about in pieces in Lourdes, France, where 2 ex-Singapore A380’s are already being broken up. Unless airlines like HiFly are prepared to keep existing interiors as they did with the Singapore Airlines A380, for which there is a very small market, the same fate as used A340-600’s awaits. They’ll come off lease from their original owners/users and be scrapped.
The last A380’s could well be out of service by 2030-35.