A380: Exit stage right. Planning the end of the A380

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The A380. So big it needs three air bridges, wider aprons, reinforced concrete stands and a six mile separation from aircraft following it.

Only one of three possible models were ever developed. The giant freight version, which was ordered by FedEx was cancelled, and to this day it still has massively over-engineered wings for that and the -900 stretch that simply never happened.

Despite tweaking and modifying the wings for a possible A380Neo version, nobody was interested in providing uprated engines – simply not enough market to recoup the costs.

Emirates sneered at the changes and were already suffering over capacity and a price war in the Gulf by late 2017. They walked away, and eventually after much arguing with Airbus cut their order, swapped it for A350’s and A330neos, and the A380 was declared dead.

It has seating for 800 in a single class, but the average seat layout is around 430 in 4 class. Its economics have proven to be inadequate for several airlines – especially those who chose the GE/PW Engine Alliance engines,  which have been lees than entirely reliable – so much so that AirFrance cited it indirectly as one of the causes  for their decision to retire the aircraft prematurely.

Designed for a hub-to-hub operation, the giant aircraft works well for those who have severe airport slot constraints, like Heathrow and JFK for example.

British Airways would happily have purchased more – they even looked for used ones, but the cost of new was too high and the cost of refurbishment of used ones to BA standards close to £45m per aircraft, made it unviable. They leased more 777-300ER’s instead.

The last new customer was ANA, and they only took the three aircraft they have, because Airbus had them over the proverbial barrel when it came to a deal to save Skymark.

So lets take a look at the recent abandonment of the A380 which now extends to no less than 4 of its major airline customers.

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First to go was Malaysia Airlines. With six aircraft that were almost entirely used on the Kuala Lumpur to Heathrow twice daily flights (two each end and two in transit/maintenance), turned into an economic liability of the first magnitude. When the twin disasters of a shot down 772 and then a 772 mysteriously vanishing with everyone on board happened within a year, the airline was hurtling towards collapse.

Brave efforts to sell off the A380’s or sub-lease them (Turkish Airlines came close), failed and they were eventually hived off into a separate entity operating Haj pilgrimage flights to Mecca although they are technically still registered to the airline. Malaysian swapped to the A350-900.

Thai was next thinking about ditching theirs, but politics in the country, military coups, a change of King to one who made his horse a Field Marshall in the army, required the prestige of operating the aircraft to remain sacrosanct,  and plans to abandon them were set aside quite quickly.

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Things went quiet for a while, then the A350’s started to appear in inventories and the staggering economies of the new aircraft made the A380’s position look weak.

An A380 costs around $29,000 US an hour to fly, of which around $17,500 is fuel. the general analysts guideline is that an 80% full A380 capable of 500 passengers would need to be charging an average of around $750 each way on a trans-Atlantic flight from a major European hub like Paris or London, to say LAX, to break even. The realities are that the average (eco/eco+/Premium/Business/First mix) fare is more like $520.

Qatar was the first to start complaining. It ordered and took delivery of ten aircraft and has already scheduled the entire fleet for departure by 2024. Qatar is hard nosed about costs and efficiencies and with the new 777-9 carrying just as many passengers at vastly less cost, along with the A359’s and A35K’s, the A380 simply doesn’t make economic sense.

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Qatar’s first A380 A7-APA

Qatar’s oldest A380 is just over 6 years, and its youngest under 2 years. Yet it plans to withdraw all of them by 2024. One problem is that as fewer are kept in service, it becomes harder to schedule servicing on their routes, so when two a day are flying to Heathrow for instance, that requires 2.5 aircraft per day to maintain the schedule. It doesn’t take long before its not viable – one service issue and its a scramble to find a replacement aircraft. It easier to get rid of them all than struggle.

On top of that if they can be disposed of before they need a second D-check, which is basically a bare-metal inspection and refurbishment, plus a full repaint, due at six year intervals, the airlines can save themselves a staggering amount of money. Some $30 million US per aircraft with a light refurbishment – over ten that’s $300m. And Qatar don’t do light refurbishments.

 Next to go was Lufthansa. The same realities abound. The costs of repainting and D Checks are available to the airline as it’s already repainted D-AIMB in January 2019.d-aimb-lufthansa-airbus-a380-841_PlanespottersNet_919780_956236430b.jpg

With 14 aircraft, Lufthansa has one of the most expansive European service hubs for the aircraft – indeed BA have even used Lufthansa Technik to service theirs (they use the same Rolls Royce engines).

On top of that Lufthansa has a huge hangar operation at Frankfurt and outside of Dubai, the only purpose built A380 terminal arm at Frankfurt capable of managing  four aircraft plus a 744 and two 748i’s.

While Lufthansa hasn’t said it will get rid of the whole fleet yet, the decision seems entirely academic. With the 748i’s also restricted by the airline to a 10 year lifespan, Lufthansa’s exit from the four engined world looks to be over by 2025. The 744’s are expected to have gone by 2023, and the A346 fleet should be gone by 2022.

The exit plan looks to be 4-4-2-2-2 – the airline didn’t take delivery of any in 2013, and the first four are just shy of ten years old already, the newest is just under 5 years old. The entire fleet has already been split into two, with 7 operating from Munich’s new T2.

(As an aside the first 748i should depart in April 2022).

With Lufthansa handing back half its fleet for part exchange on A350’s, the rest inevitably doomed to go much the same way, Air France was next on the list.

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With ten aircraft, the oldest of which is just over 10.5 years, 6 of them are leased – five of them from Dr Peters Group who must be wishing they’d never heard of the A380. They were the owners of the first Singapore Airlines aircraft that have been broken up.

Air France plans on ending the leases as quickly as is viable and phasing the rest out by the end of summer season 2022. The speed of the decision over a couple of months, was a little shocking, but again the airline is faced with heavy bills, they all need refurbishing if they’re to be kept, and Air France has had enough of the technical issues. The GE/PW Engine Alliance jet engines have been especially troublesome. The new A350 going into service and 787’s have proven vastly more economical.

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The only European operators will soon be just British Airways and HiFly. BA has 12, HiFly the only second hand A380 anyone has so far actually taken up.

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Even the future of that seems mildly dubious. Despite company protestations to the contrary, the HiFly A380 has been chronically under used in 2020, now that the peak Dreamliner engine issue has passed. It’s also had technical issues and one where it hit a pier in an airport not really designed for A380 operations.

Etihad is another of the smaller A380 operators – again with ten aircraft, they’ve stayed quiet on where they see the future of the fleet.

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Possibly the worlds most ironic livery – destroyed by global warming from Co2 emissions the Coral Reefs may well be gone before 2050. Part of the cause will be high altitude Co2 emissions from aircraft like this.

ANA has only just taken delivery of three – and it it needs all of them to operate just one route to Hawaii and back.

Qantas has had mixed feelings about the A380, but there’s been no suggestion – yet – that that they see its future as being especially short term. Their oldest is 11.5 years and the youngest 8.4 – if there was any time to be looking at disposal its right now.

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Certainly the funkiest livery on an A380, the giant turtle livery

They also own theirs, so they have the financial benefit of having a written off capital expense and only have to pay for running costs and maintenance. When you own such a huge asset its hard to want to get rid of it. It’s like owning a gas guzzling V12 Jaguar XJS – its not worth anything but you only have to put the petrol in, and service it now and again. If you’re not paying leasing or loan costs every month for it, its a lot more affordable.

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That’s the same thing BA have, and a reason they buy so much. Look how long they kept their 744’s for, and they intend on pushing the 772’s to 30 years. 

Singapore Airlines also operates a larger fleet, but has even replaced its earliest with new aircraft. It’s in no hurry to rid itself of the 19 it has and it’s already returned 5, though its looking very much like four of the returnees will be broken up (2 already have been).

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Already broken up at Toulouse

Korean Air operates another ten A380’s, but again, they have a younger fleet ranging from 5.5 to 8.7 years. Again, as owners, they’re less inclined the to rid themselves of aircraft that are still useful.

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So finally we come to Emirates….

What can be said? As a devotee it was their demands and commercial pressures in the Middle East, greatly aggravated by the politics of the region and the ridiculous blockade of Qatar, they eventually succumbed to the inevitable and gave up on the A380.

They’ll be the last customer to take delivery of the last A380, some time in 2021. They outlined their exit plan fairly recently, but fear not, for they seem intent on keeping a large number operating well into the mid 2030’s.

Emirates were the only airline to fully embrace the A380 and for them it has worked, but the cracks are showing. Their commitment is so vast that with 112 operational and 6 more due in the immediate 12 months ahead, it’s not all been easy.

With few alternatives, having culled their smaller aircraft, the A380’s often have to work at low occupancy on discounted fares. Slowly as the competition has improved and self inflicted wounds, along with a little bit of arrogance, have shown up the issues, they’ve realised they need a more flexible fleet.

Just think what Doric will do with all those returned leases in the next few years, and there are other leasing companies  probably crying into their lunch at the prospect of loosing money hand over fist, as one after the other is broken up.

Its a hard, harsh lesson the A380. A good idea whose time has never really quite arrived. For that I blame the 2009 global economic and financial meltdown, it kicked the world in a different direction. Climate change and the economics of climate change and fuel costs have gone places nobody expected when the A380 was conceived.

It’s going to be long goodbye for some, and a sad and rapid end for others.

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Emirates latest A380, April 2019
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