Airbus CEO Fabrice Brégier said at the Paris Air Show that the jetmaker is weighing whether to develop an even bigger A380neo with newer engines.
PARIS — The future of the largest airliner in the world, the Airbus A380 superjumbo jet, was a hot topic at the Paris Air Show this week.
Some observers question whether the slow-selling flagship airplane even has a secure future. Airbus gave no definitive answers in Paris, but did reveal it’s still considering whether to put new engines on the double-decker airplane and also whether to make it even bigger.
Airbus is weighing a stretch of the A380 fuselage, CEO Fabrice Brégier said in an interview at the Air Show. That could add as many as 100 additional seats to the current 525 or so in current configurations. But Brégier declined to specify when he might arrive at a firm decision on this so-called A380neo.
“We have not concluded on the technical possibilities, on the costs, the timetable and all that,” Brégier said. “We would launch it if we had a sound business case. We are a private group and we have to make decisions that make business sense.”
He also said Airbus has begun discussing launch aid for an A380neo with European governments.
Tim Clark, CEO of Gulf carrier Emirates, which is by far the most important A380 customer with 61 of the massive jets in service and another 79 on order, is pressuring Airbus to go ahead with the bigger jet.
“If Airbus built the neo, we would not only replace the whole (A380) fleet (with A380neos), we’d add incremental units,” Clark told journalists this week at the Air Show. “In my view, this airplane has to be built.”
In the run-up to the Air Show, when putting a new engine on the A380 was the only option being raised, analysts were divided on what Airbus will do.
Richard Aboulafia, aviation analyst with the Teal Group, suggested going forward with the A380neo would be throwing good money after bad.
“Well-run companies do not launch products for one customer,” Aboulafia said.
He pointed out that while Airbus and Boeing currently are having some problems bridging the sales gaps between their current models and the forthcoming replacements — the A330 and the A330neo, and the 777 and the 777X — the sales gap between an A380 and an A380neo would be “an unbridgeable chasm.”
John Strickland, a London-based airline industry analyst with JLS Consulting, said major airline chiefs apart from Clark had displayed “amazing reticence” about a new A380. Although demand for very large planes is likely to grow in time due to airport congestion, he said, “there’s no evidence of big traction there at the moment.”
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The A380 hasn’t had a new order in 18 months, since Clark added another 50 for Emirates.
On the other hand, Issaquah-based analyst Scott Hamilton of Leeham.net said Airbus could push a lot of the development cost of an A380neo onto engine maker Rolls-Royce, making its business case less daunting.
Analyst Adam Pilarski of consulting firm Avitas agreed. “I think it will happen,” he said.
At the Air Show, John Plueger, president of Air Lease Corp. (ALC), who is deeply connected with the big manufacturers, outlined the issues facing the plane and how an A380neo could provide a solution.
He said ALC wouldn’t buy an A380 unless it develops a bigger customer base. Plueger said he worries about the secondary market. Which airlines have a dense enough route network to take a 10- or 12-year-old A380 when it comes off its first lease?
He said Airbus is looking at “a small stretch” to the fuselage that would add both seats and cargo volume. Combined with new engines, this could make a “defining difference” that would improve the economics of the plane enough to spur more sales.
Plueger said he wouldn’t be surprised if Airbus makes a decision by the end of this year.
With the future of his flagship airplane in the balance, Brégier is moving on several fronts.
He said Airbus is still trying to define the details of a potential A380neo, including options both for new engines and for a fuselage stretch. But ahead of that decision, he said his team is already marketing to airlines a denser cabin layout that would give an airline 544 seats in four classes.
“This brings a lot of value before any modification to the aircraft,” Brégier said.
Adding seats adds revenue. This push toward higher density illuminates why a stretch is being considered. In the less densely packed A380 cabin layouts that are most common today, what airlines call the “seat mile costs” — a measure of operating costs versus revenue per seat that airlines use to determine the economics of flying an airliner — may be too high compared to planes like the 777X.
Brégier said the current A380, if fitted with the denser 544-seat layout,” offers better seat mile costs” than the 777X. In other words, with the more relaxed A380 cabin layouts airlines are currently using, that may not be the case.
Yet he insisted that the giant airliner will survive and eventually thrive.
“The A380 was perhaps launched 10 years too early,” he said. “We had a bad start … We had technical difficulties (building the early models) and then we were hit by the (global financial) crisis of 2008.”
“But if you look at the trend in this market … the trend is toward bigger aircraft,” Brégier said. “This aircraft works now wonderfully. We have customers making a lot of money when it is appropriately used.”
“We are confident its market will grow,” he added, and said he expects new customers to sign up this year.
For now though, sales are stalled and big questions hang over the program.
How much time does Airbus have to revive the A380? What will it cost to remake it as an A380neo? Can that investment make business sense for a niche market that Clark estimated at perhaps 500 airplanes. Will a secondary market emerge for used A380s?
Everyone in the aviation business understands that the roomy A380 is a fabulous plane for passengers. Interviewed at the Air Show, Aengus Kelly, CEO of leading airplane lessor Aercap, said “it’s the only airplane I’ve changed my travel schedule to fly on.”
But though he owns a large fleet of big widebody jets, there’s no way he’ll buy an A380 anytime soon. From his point of view, the big jet has much too small a market. As airport congestion grows in the future, Kelly said, “the A380 maybe will have its day … But that will be a ways off.”