84 Comments Add your own

• 1. ikkeman  |  May 26th, 2009 at 12:13

  

  I’m not sure, but isn’t the Cargo slump of a similar magnatude as the premium slump?
  Wouldn’t the lack of a cavernous cargo hold on the 380 be a bonus in such circumstances?? I’s optimised to fly pax, not additional belly cargo (use your 2nd hand 747’s for that), hence, as the cargo market contracts, the A380 is relatively unaffected.

  Besides, the A380 can be filled at the same seat pitch as any other bird, so why this behemoth must be hit harder by the premium slump I don’t see.

  I’m sure some of the readers will be delighted to educate me!

• 2. Dave  |  May 26th, 2009 at 13:34

  

  Wouldn’t the lack of a cavernous cargo hold on the 380 be a bonus in such circumstances??

  ____________________________________

  Not really, because if airlines cannot make money from high class fares, with freight in the gutter too, how else will they make money?

  Qantas’ move is an indication I think of the reality that the A380 perhaps arrived too late for the boom, or too early for the next one.

  Either way, Airbus cutting production may just save that program from total collapse.

  Emirates is the big worry here, what with 56 on order while sporting a 72% plunge in profits.

• 3. Skeptic  |  May 26th, 2009 at 14:31

  

  Finally someone in the aviation media has the intellectual honesty and intestinal fortitude to link the A380 business case with the premium pax plunge. More than any other aircraft, the A380 was touted, not as a cattle car with 800 seats, but as a flying luxury liner–a money making machine to offer unparalleled standards of airborne luxury to the witless willing to pay incredible sums of money for a few hours of being pampered. Well, reality has intervened and the crack pipe dream is over. How long until the boards of the companies that invested heavily in this aircraft realize that they can either fly it at a loss, or pack it to the gills with cattle class–assuming they have a route that can achieve breakeven loads? Of course, they will have to kiss off cargo revenue. Will any of the executives who made the decision to go with the big whalejet be held accountable? That was some mighty fine kool aid being served in the Airbus chalet during all those air shows!

• 4. Dougloid  |  May 26th, 2009 at 14:50

  

  Skeptic sez: Of course, they will have to kiss off cargo revenue. Will any of the executives who made the decision to go with the big whalejet be held accountable? That was some mighty fine kool aid being served in the Airbus chalet during all those air shows!

  The A380 never had any chops as a cargo hauler and the dichotomy has always been disposable load and the lack thereof. In between swigs of Koolaid (or, FlavorAid for the historically minded) the common wisdom was “Oh well, we, of course, will be hauling high end luxury goods that don’t weigh much, whereas you will have the scrap iron and waste paper business in the other direction with your tramp steamer 747s.”

  Listen. Cargo doesn’t complain if the plane sits on the ramp for half an hour. It doesn’t complain about the seating arrangements or angle for an upgrade to first class. Cargo doesn’t sexually harass the stewardesses or try to join the mile high club in the back row. Cargo doesn’t demand peanuts and it rarely needs a latrine. Cargo doesn’t need fancy seats, carpet, and in flight entertainment.

  Hauling freight is necessary in a way that hauling passengers is not. And it is therefore likely to be a paying proposition when hauling passengers is not. Can you reconfigure to haul cargo with high enough floor loadings to make it worth your while?

  That’s the operative question. With the 747 the answer is yes-people have been doing it a long time.

  All of which points you ineluctably to the stupidity of the notion of the wisdom of crowds-there ain’t any.

• 5. Jacobin777  |  May 26th, 2009 at 16:57

  

  I’ve flown on BA’s LHR-DXB-LHR route a couple of time already this year. Only ONE flight was full(pax returning from Easter Holidays). All of the other flights were 50%-75% empty. In fact, one of my BA flights (BA-109) had only 55 pax on board (25% load factor)….

  “”As we move into the new financial year, the outlook is not improving,” Chairman and CEO Ahmed bin Saeed Al Maktoum warned. “Although fuel prices are dropping, demand for business and first class traffic is still weak in many markets.” He said “development plans remain unchanged” and the year “will be one of satisfactory growth.”"

  http://www.atwonline.com/news/story.html?storyID=16692

  My aunt recently flew EK’s LHR-DXB-LHR route as well. She basically told me most people in the back almost had an entire row to themselves on the way to DXB and many had an extra seat to themselves on the way back.

  Interestingly, she flew EK’s DXB-KHI-DXB as well and told me loads were pretty good. That being said, I’ve flown that route a couple of dozen or so times and I’ve been on flights where there were no more than 10-15 pax on board.

  here is one photo which I recently took:

  http://img379.imageshack.us/img379/8830/img2957edited15elyd4.jpg

• 6. Erik Bloodaxe  |  May 26th, 2009 at 17:03

  

  Ikkeman,
  The A380 doesn’t have a cavernous cargo hold. Actually once you load up all the bags of the pax, there is very very little room left over for revenue cargo. Even less if the Airline took the optional Crew rest/galley complex in the “tunnel” area of the lower lobe.

  This is the bummer side of carrying so many pax. Of course they pack bags, and those bags have to go somewhere.

• 7. Vero Venia  |  May 26th, 2009 at 17:27

  

  5. Jacobin777 | May 26th, 2009 at 16:57 said, “My aunt recently flew EK’s LHR-DXB-LHR route as well. She basically told me most people in the back almost had an entire row to themselves on the way to DXB and many had an extra seat to themselves on the way back. (emphasis added)

  In that case, who needs to pay a business class seat when you can have the same comfort for the price of an eco seat?

• 8. Mike M  |  May 26th, 2009 at 17:30

  

  >>>>The A380 doesn’t have a cavernous cargo hold. Actually once you load up all the bags of the pax, there is very very little room left over for revenue cargo.

  Good God, do NOT tell that to the Airbus fanboi’s - they’ll be devastated that fat bitch of Toulouse cant do something a forty year old 747 can!

  Skeptic raises a great point here:

  >>>>How long until the boards of the companies that invested heavily in this aircraft realize that they can either fly it at a loss, or pack it to the gills with cattle class–assuming they have a route that can achieve breakeven loads?

  If as expected first class and business class traffic goes even lower than where it is now, some of the A380 customers may not even be fit enough to make it through this downturn.

  So much for Leahy’s 30-a-year pipe dream of A380 sales!

• 9. Erik Bloodaxe  |  May 26th, 2009 at 17:36

  

  Ikkeman, I realized I read your article incorrectly. Sorry.

  The issue you raise works for airlines that have a dedicated cargo branch, but if they don’t they are out of luck. The additional side of the equation is that non-cargo branch airlines make significant portions of their revenue from belly cargo. This is yet another reason why the A380 is nothing but a niche aircraft. Especially when one considers that the belly hold is not significantly larger than a 747, but carries a far greater number of pax.

  For airlines with a dedicated cargo branch, the only thing they really need to be concerned with is pax cargo, so it’s no big deal, but the decline in load factors KILLS them, and the A380 break even load factor is still higher than a fully loaded 747. We see this with EK, and how they pulled the A380 off the NYC run, and replaced it with a 777.

• 10. boeing investor  |  May 26th, 2009 at 18:34

  

  “Besides, the A380 can be filled at the same seat pitch as any other bird, so why this behemoth must be hit harder by the premium slump I don’t see.”

  Because most A380 operators barely make use of that vaunted “50%-more-than-the 747″ space and carry LESS than 475 people.

  All these “Suites” and First Class products by EK/SQ/QF cost hundreds of millions of dollars - fill up the front and the back can stay empty.

  Sadly, the reverse is NOT true and is also why many 747-400 operators have selected the more efficient 777-300ER as a replacement and not A380 or 747-8I.

• 11. Skeptic  |  May 26th, 2009 at 19:01

  

  ILFC has 10 A380s on order. Even during the halcyon times of 2005-2007, ILFC couldn’t lease these things out. I’ve read where Hazy can cancel in Jan 2010. It will be a real kick in the buttocks of the business case for this aircraft if he does.

• 12. Falcon  |  May 26th, 2009 at 19:19

  

  It is reassuring to see the first and business class collapse is limited to the A380 and thus most airlines will have no problems as they have not ordered it.

  Fortunately only 14 have been delivered and only to three airlines so for the most part this will be a non-issue.

  Fully understand the unfortunate three will fold within days as indicated by comparing their latest financials to their peers.

• 13. boeing investor  |  May 26th, 2009 at 19:31

  

  As usual, Falcons poor attempt at “tongue in cheek” resembles more “tongue in butt-cheek”.

  Considering Qantas is freezing First CLass and British Airways is standing down jets, both of which are 747-400’s, your quip here is as idiotic as Udvar Hazy claiming Boeing and Airbus HAVE to cut production by 35% in 2009.

  Leading me on nicely to the point by Mr/Ms Skeptic - in that those useless A380’s will be dropped for A350XWB’s which will not be delivered as quick as the A380’s.

  That time lag will allow ILFC to perhaps pursue customers who havent ordered 787s or A350s and can offer a good lease deal for interim lift when a rebound occurs.

• 14. Vero Venia  |  May 26th, 2009 at 21:10

  

  Off topic.

  It’s been a long time since we’ve heard anything from Mr Steven Udvar Hazy. Does anyone know how ILFC is doing?

• 15. Skeptic  |  May 26th, 2009 at 21:31

  

  ILFC? Last I heard they had received bids of around USD$5 billion for the business when they expected USD$7 billion. As you probably know, they are owned by AIG, which for all practical purposes is controlled by the U.S. government.

  Selling ILFC may not be the slam dunk many though it would be….

• 16. Vero Venia  |  May 26th, 2009 at 22:16

  

  Another off topic question.

  I lost track of A380 deliveries in 2009.
  What’s the plan and how many have been delivered so far?

• 17. Brett  |  May 26th, 2009 at 22:21

  

  Verio Venia - 1 A380 delivery this so far this year (Emirates).

  Target for 2009 is 14 deliveries, down from 18.

  13 left to reach that revised number.

• 18. Vero Venia  |  May 26th, 2009 at 22:29

  

  Thanks.
  There is still plenty of time to reach 14 deliveries this year.

• 19. Rob  |  May 27th, 2009 at 01:23

  

  Yet again this forum has to attack the Airbus product. Amazing, what a coincidence.

  Having flown SYD-LHR on the A380 5 times now there is no way I will fly on anything else until the 787 comes along simply because the experience is so much better. I fully expect the Boeing product to be equally as advanced when it comes along (i.e. I regard both Boeing and Airbus new products as clear advances over previous generations so I am *NOT* advocating Airbus over Boeing) and assuming that is the case will be looking to do as much of my flying on the new types as possible. To the extent that I will modify travel schedules to suit.

  I can’t talk about total loads but the business class section of the A380 has been pretty much full every time I’ve travelled, most recently was last month.

  In short - I see the 380 as the future of long haul that is in place because once you fly it there is no logical reason to want to fly on a 747. When the 787 comes along that will be another reason not to fly old jets (inc 777s). And sooner rather than later customer demand for quality will move airlines to the new product.

  As an example: I used to love flying JAL, their concept of service is beyond anything Western airlines deliver. But not even that level of service compares to the advantages the 380 offers. When they get their 787s I will be back, but not until then.

• 20. Jacobin777  |  May 27th, 2009 at 02:30

  

  Vero Venia states:

  “In that case, who needs to pay a business class seat when you can have the same comfort for the price of an eco seat?”

  That’s probably what happened with EK’s A380 DXB-JFK route. Now lets see what happens with the other 50+ A380’s they get.

• 21. Mike M  |  May 27th, 2009 at 03:39

  

  >>>I can’t talk about total loads but the business class section of the A380 has been pretty much full every time I’ve travelled, most recently was last month.

  Surprise surprise, you CANT talk about the loads.

  How much is “pretty much full” exactly? More than half the biz seats taken up or just a bit less? Or how about 101% occupancy?

  Please do tell us what that is exactly.

  Didnt you go in First Class - you know, the place where QF is actually suspending seating soon?

  Was that “pretty much full”? Nothing but an amateur perspective because the A380 is called into question - typical Airbusier.

• 22. Leelaw  |  May 27th, 2009 at 06:30

  

  SIA’s recent decision to deploy the 773ER on the remaining 744 LHR-SIN rotations instead of the A380 may well be the death knell for the A380 program. An operator must be able to feasibly deploy its “flagship” on its trunk routes in ALL economic conditions, even the very worst, otherwise its of dubious utility.

• 23. Vero Venia  |  May 27th, 2009 at 07:48

  

  19. Rob | May 27th, 2009 at 01:23 said, “In short - I see the 380 as the future of long haul that is in place because once you fly it there is no logical reason to want to fly on a 747.”

  In my opinion there is no more logical reason to want to fly on an A380 than to want to fly on a 747 or a 777 or a 787 or an A350. You don’t want to fly but you need to fly from A to B. Flying with hundreds of other people is not a leisure.

  Only time will tell what the future of long haul travel will be.

  Businesses are trying to save cash. Many of them try to encourage their staff to fly eco class. When premium eco class will be widely adopted I think businesses will pay travel only on premium eco class. Businesses have to cut travel cost.

• 24. boeing investor  |  May 27th, 2009 at 08:37

  

  “In short - I see the 380 as the future of long haul that is in place because once you fly it there is no logical reason to want to fly on a 747.”

  Of course, Rob forgets that you cant fly on an A380 to your destination if its not one of the 30/40 airports the A380 can fly into.

  Kinda limits your ability to fly unrestricted, which is what the 767, 777, 787, A330 and A350 allow you to do.

• 25. Vero Venia  |  May 27th, 2009 at 09:02

  

  22. Leelaw | May 27th, 2009 at 06:30 says, “An operator must be able to feasibly deploy its “flagship” on its trunk routes in ALL economic conditions, even the very worst, otherwise its of dubious utility.”

  In a blog post titled “My Dream Fleet” I tried to trigger a discussion about the strange conclusion I made after I made a simple simulation using my CASIO electronic calculator and colored strips of paper.
  My conclusion was that “you can introduce big aircraft on a route if and only if you have enough frequency” http://verovenia.wordpress.com/2009/05/18/dreamfleet/

  When you put a big aircraft on a route, you have to make sure the route can absorb traffic fluctuation economically. The only way to do this is by having many flights (frequency) with several smaller aircraft in addition to the big one.

  Unfortunately, there has not been many reactions to the article I posted.

• 26. ikkeman  |  May 27th, 2009 at 09:56

  

  Whow what an… heated response.

  My question remains: Why would the economic situation hit A380 operators harder than any other.

  10. boeing investor | May 26th, 2009 at 18:34

  You’re right: “Because most A380 operators barely make use of that vaunted “50%-more-than-the 747″ space and carry LESS than 475 people.”
  That’s a fact, and still the operators can offer premium and economy tickets at similar prices to 747/777 operators… what happens to the bottem line when they divide the cost of operating the 380 by, say… 25% more pax? wouldn’t the cost per pax go down a similar amount - at least double digit…
  Don’t you think the economypax is price-sensetive?

  “Sadly, the reverse is NOT true and is also why many 747-400 operators have selected the more efficient 777-300ER as a replacement and not A380 or 747-8I”
  As many have claimed here before, an I mostly agree, the 380 is no 747 replacement, like the 747 was no 707 replacement. A large portion of the 747 in use today are used for their range, not their capacity - the 777 provides the same range at significanly lower cost (than even the 748)

  and sorry, but I did smile reading Falcon’s post. self critisism dousn’t come naturally?

  21. Mike M | May 27th, 2009 at 03:39
  Where do you get off with such an agressive post? a case of “let’s flame anyone that doesn’t think my cow is holy??”
  The guy relates his experience and your immediate response is attack?
  Oh, and please provide the exact load factors of all the flights you’ve been on (including those at the magical 101%)

  22. Leelaw | May 27th, 2009 at 06:30
  But their also parking 747’s… isn”t this simply a case of adjust supply to demand. if even a 74 is to big for that route, Why try an 380. I don’t think SIA has parked any of it’s 380’s?

  23. Vero Venia | May 27th, 2009 at 07:48
  it may not be logical, but I cetainly have a predisposition for flying newer a/c. I rarely have to fly anywhere, most of my (airline) travel is leisure, and I do prefer a quiet cabin.

• 27. Leelaw  |  May 27th, 2009 at 10:00

  

  “Unfortunately, there has not been many reactions to the article I posted.”

  I’m a bit surprised, the most fervent “Airbusiers” usually feel compelled to discredit and/or refute any suggestion that the business case for the WhaleBus[t] is anything other than rock solid, flawless, and robust. Of course the current economic/market conditions reveal the soft underbelly of the business case for the A380: i.e., what happens when you don’t have sustained annual traffic growth in the range of 5%, particularly at slot-restricted hub airports, and premium class passenger is flat and/or declining as well ?

• 28. Leelaw  |  May 27th, 2009 at 10:18

  

  “But their also parking 747’s… isn”t this simply a case of adjust supply to demand. if even a 74 is to big for that route, Why try an 380. I don’t think SIA has parked any of it’s 380’s?”

  SIA may not be parking them yet, but they’re seemingly scrambling a bit to find a means to feasibly deploy the new arrivals. BTW, I’m wondering how true Mr. Leahy’s long touted claim that A380 operators would be able to break-even at 60-65% load factors is proving to be in the current conditions?

• 29. boeing investor  |  May 27th, 2009 at 10:18

  

  “still the operators can offer premium and economy tickets at similar prices to 747/777 operators… what happens to the bottem line when they divide the cost of operating the 380 by, say… 25% more pax? wouldn’t the cost per pax go down a similar amount”

  No it wouldnt because you’re concentrating on load factor, not yield.

  All those “extra” low yield passengers have baggage, that increases fuel requirements and decreases volume for freight and adds costs. Simplistically put, the A380 has zero ability for premium pricing.

  No airline can charge a passenger more for the same journey as an A330/777 just because its an A380 they’ll be flying on. Customers will and do simply look elsewhere for a cheaper flight.

  While I dont have specific details to hand right now, I can almost vouch with certainty that price/flight times ranks far above preference for the type of airplane when people book flights, business or leisure.

• 30. Heathrow Guy  |  May 27th, 2009 at 10:25

  

  Mssrs Ikkeman/Leelaw:

  Singapore Airlines A380 flights into LHR have been okay on load factor but virtually hollow in Suites/Biz class.

  I’d say their A380’s with “steerage” pax are probably identical to when their 747-400’s were here.

  Even their 777 flights for the last few weeks has seen no more than a half dozen business class fliers arrive each day.

  Personally, with all the operational changes I have witnessed here, I would not be surprised to see Singapore switch one A380 flight for another 777 flight, maybe even a -200ER if things get any worse.

• 31. Aurora  |  May 27th, 2009 at 10:41

  

  Another great article, Saj.

  I just came across this NYT piece. It seems LH & AF/KLM still believes in the premium product–especially as a “marketing instrument”.

  Wishful thinking? Bravado? Head-in-sand? Or are they wisely positioning themselves for future growth?

  http://www.nytimes.com/2009/05/27/business/global/27first.html?pagewanted=1&ref=global-home

• 32. Vero Venia  |  May 27th, 2009 at 11:14

  

  http://iata.org/pressroom/pr/2009-05-27-01.htm

• 33. ikkeman  |  May 27th, 2009 at 14:25

  

  29. boeing investor | May 27th, 2009 at 10:18

  I claim the premium slump hits all airlines whether Bo or Ab (or both) operators.
  Secondly, the freight market is in sharp decline as well.
  Therefore any yield to be had must come from cattle-class load factor.

  the 380 competes against 330/777/747 at suboptimal seat counts. as yield must come from cattle class in the absence of cargo and premium - he who moves them the cheapest, moves the most. Thus the 380 does have a (at least one) leg to stand on.

• 34. Chris Wallace  |  May 27th, 2009 at 14:57

  

  Premium cabin traffic is cyclical just like any other form of traffic. When one market closes, a new market opens.

  The Tech Boom drove premium cabin traffic in the early part of this decade and the crash, 9/11 and SARS beat it down. Then the finance industry and home-mortgage-backed vacations drove premium cabin traffic in the latter part of this decade. Now the banking crisis and “Swine Flu” are beating it down again. But something will come early next decade and start building the traffic again.

  I do think that as Business Class has improved over the past decade the demand and desire for First Class has shrunk and we’ve seen airlines respond by creating smaller cabins. But there are certain routes and parts of the world (Asia) where it can work so I don’t believe it will disappear.

  The A388 is said to have a lower break-even factor then the 744, but I imagine the 77W has an even lower one. So as we are hitting bottom, the 77W is the preferred platform if you have them. BA and QF don’t at the moment, which is hurting them. BA will be getting them soon, so that should help. And Tim Clark is probably happy he has such a large fleet of them available.

  I suppose the A380 today is like the 747 back in the early 1970s. The 747 proved to be too large for many carriers when traffic fell due to the 1973 Oil Crisis and they had to park (or even divest themselves of) them. But traffic did rebound and while some airlines never took their 747s back, others did and added to their fleets.

  I don’t expect airlines to park A380s, but instead defer deliveries until conditions improve.

  But conditions will improve.

• 35. boeing investor  |  May 27th, 2009 at 15:09

  

  Ikkeman - “as yield must come from cattle class in the absence of cargo and premium - he who moves them the cheapest, moves the most.”

  This is summed up perfectly by Stitch:

  “The A388 is said to have a lower break-even factor then the 744, but I imagine the 77W has an even lower one. ”

  We must also remember that the A380’s added weight will rarely if ever be solely offset just by cattle class traffic on its own - the amount of dead weight it carries as well as fuel for those trips means there is a reason why the 747-8F, for example, killed off the market appeal of the A380F.

  Similarly, the 747-8I will have much lower trip costs than the A380 while still being able to offer far more space/volume for freight as well as total tonnage overall.

• 36. MPTA-098  |  May 27th, 2009 at 17:14

  

  Looks like some people are unaware that SQ’s two daily A388 flights and one daily 77W flight to LHR already carries more passengers than the three SQ 747-412 flights that used to fly the route.

  SQ-744×3: 36F, 150C, 939Y: With a total of 1125 seats.

  SQ-A388×2: 24R, 120C, 798Y
  SQ-77W: 8F, 42C, 228Y

  SQ-A388+SQ-77W: 32F/R, 162 C, 1026 Y: With a total of 1220 seats. 4 less seats in F/R, 12 more seats in C-class, and 87 more seats in Y-class.

  If SQ had deployed the A388 on three daily flights on the SIN-LHR route, a total of 1413 seats would have been available daily v.s 1125 seats for three SQ 744 flights, or a 25+ percent increase in capacity. Although F/R would have the same number of seats (36), you would have a 20 percent increase in C-class and a 27 percent increase in Y-class.

  Conclusion: Wanting SQ to increase capacity by 25 percent on the SIN-LHR route (while maintaining the frequency of flights), and at a time when (arguably) the world is facing the worst recession since the great depression, will be laughed at SQ hq, or any airline hq for that matter. It looks like the behaviour of the anti-A380 crowd gets ever more peculiar (and/or desperate) in their eagerness to “bury” the A380. It’s obvious that the vast majority of these people have never seen the insides of the hqs of the worlds top quality airlines, and have rather chosen to use all of their “talents” in “important” blogs such as this one.

  I don’t expect airlines to park A380s, but instead defer deliveries until conditions improve. But conditions will improve.

  Well said Chris. It seems like Randy agrees:

  On the likelihood of a rebound in demand: Once the market stabilizes and economic growth returns, we continue to see growth in travel. We’ve been through eight, nine or 10 of these. Air travel tends to be extraordinarily resilient, and heads back to (a) long-term forecast of 5.0 to 5.3 percent.

  http://seattle.bizjournals.com/seattle/stories/2009/05/25/story9.html?b=1243224000%5E1833263

  “We must also remember that the A380’s added weight will rarely if ever be solely offset just by cattle class traffic on its own - the amount of dead weight it carries as well as fuel for those trips means there is a reason why the 747-8F, for example, killed off the market appeal of the A380F.”

  All that “dead weight” is only producing some 4-5 percent greater fuel burn in comparison to the 747-400s (SQ), while carrying 96 more passengers, or 26 percent greater capacity and with more room per passenger in all three classes. But you meant the F-model, right? Interestingly, the A388 has the same number of F/R seats as the 744, which it’s replacing at SQ, while the seating capacity in C is 20 percent greater, and in Y it’s 27 percent greater on the A388. In a downturn like this one, those extra seats in Y will come in handy as the premium demand is plummeting.

• 37. Dougloid  |  May 27th, 2009 at 17:52

  

  Leelaw sez: But their also parking 747’s… isn”t this simply a case of adjust supply to demand. if even a 74 is to big for that route, Why try an 380. I don’t think SIA has parked any of it’s 380’s?”

  SIA may not be parking them yet, but they’re seemingly scrambling a bit to find a means to feasibly deploy the new arrivals.

  They’ll make fine chicken barns.

• 38. Vero Venia  |  May 27th, 2009 at 18:14

  

  Randy has balls, but they are not in crystal.

  The best estimate for the average growth in the next decade between (2010 and 2019) is 3.5% per annum.

  The average annual growth between 2000 and 2009 is only about 4.5%.

• 39. Leelaw  |  May 27th, 2009 at 18:33

  

  “I suppose the A380 today is like the 747 back in the early 1970s.”

  “Stitch,” as you are well aware, what I consider to be false historical parallels/comparisons of the early history of the A380 program to that of the 747 program are my pet peeve. You might want to compare how many 747s had been delivered to operators 100 months after program launch with what is currently the case with the A380 to establish whether there is any baseline relevance whatsoever to the comparison you’ve suggested.

• 40. boeing investor  |  May 27th, 2009 at 18:48

  

  “In a downturn like this one, those extra seats in Y will come in handy as the premium demand is plummeting.”

  Yes they do, but throw in the bags those customers have and the extra fuel costs - it all goes up, not down. Just because seat availability is there doesnt mean its filled. Just because economy class passengers fill seats it does not translate into filling one’s coffers.

  See the point made by poster Jacobin.

  Your assumptions on the SQ model rely too heavily on seats being filled when in reality the reverse is true. SQ’s figures just over a week ago are an exemplary piece of evidence of that reality.

  http://www.timesofoman.com/innercat.asp?detail=25124

  During the March quarter, SIA flew 3.9 million passengers, which is down almost 18 percent from 4.75 million at the same point in the previous year.

  http://www.fleetbuzz.com/forums//index.php?showtopic=22287 (Post #3)

  Break-even load factor approaches 77 per cent
  As a consequence of this conspiracy of events, the cushion that SIA has enjoyed between its actual and break-even load factor has vanished. During the March 2009 quarter, breakeven load factors exceeded actuals by around five ppts. Much will be needed to pull this equation back.

  Whichever way its sliced, the A380 does not have the lowest trip costs right now and no matter how many sardines you pack into it - it will not make money. I bet SQ’s sole 777-300ER flight to LHR, for example, makes it more money than does one A380-800 flight any any given day.

• 41. Vero Venia  |  May 27th, 2009 at 20:22

  

  New twins like the 787 and the A350 will have much better seat mile cost than the the latest quad like the 747-8i and the A380.

• 42. Erik Bloodaxe  |  May 27th, 2009 at 22:04

  

  I suppose the A380 today is like the 747 back in the early 1970s.”

  Ah, see there’s the problem with the A380 in a nutshell. Airbus conceived of and designed the plane for the late 1980s and early 90s market. This market no longer exists, just like the market of the 1970s no longer exists.

  In the early days of the 747 airlines bought it for the range, not capacity. It’s capacity was not the real issue, but more a result of needing to be large enough to make the range. This is not the case now-a-days. The A380 is a product designed for an era that has been superceded by the long range twins. ETOPs has made quads largely irrelevant in the market, not totally, there will still be some very niche needs for quads, but those will be quite small.

  When one considers that the A380 was already almost decade old when it was launched, and more than a decade old when it started to be built, it’s only due to Airbus’ enormous ego that it was ever carried out. It will be, forever, at best a niche aircraft.

• 43. Vero Venia  |  May 27th, 2009 at 22:18

  

  42. Erik Bloodaxe | May 27th, 2009 at 22:04 says, “In the early days of the 747 airlines bought it for the range, not capacity. It’s capacity was not the real issue, but more a result of needing to be large enough to make the range. This is not the case now-a-days.”

  Correct. Modern twins can do 747’s range more efficiently.
  See: http://boeingblogs.com/randy/archives/2009/02/first_flight_40.html#comment-49640

• 44. Rob  |  May 28th, 2009 at 00:19

  

  Aw, poor Mike M (response 29).

  Guess rading comprehension was’t your strong point in school.

  Can I comment on exact loads for all airlines everywhere - no, and neither can you. At least I’m honest enough to admit it rather than imagining my own perceptions are the only ones that count.

  For the specific flight I was on last month Business class was absloutely full Sydney - Singapore and there were 2 seats Singapore to London that appeared to be unoccupied. I wandered around the cabin checking because I have had problems booking flights on the QF A380 service as it’s generally listed as full.

  And yes, that means business class. I recognise your inherent jealousy but my boss expects me to be working the day after I land so happily springs for business travel. Not first. Although I have used points to upgrade once and that was simply awesome. As I undrstand it the first class QF are suspending is on 747s.

  Why?

  Because custoemrs who are willing to pay for first class are choosing the vastly superior A380 First class option.

  And again, I expect the 787 first class to be as far ahead of the current 747 First Class as the A380 is.

  So, hopefully that answers part of your snide comment.

  Amateur observation - yes it is. And so is yours. Unless you are claiming to be a professional airline yield analyst or something. And if you are, I’ll say right now I don’t believe you.

  Now let’s deal with the Airbusier claim. As stated I realise that reading comprehension isn’t your strong suit. That is probably lifting heavy objects in the loading dock or something. Good for you. Now, just to make it easy for you, go reread my post and refer my comments on the 787 and my expectations for that.

  In short, both the 77 and 380 either are or will be so far ahead of anything that has gone before that customer (you know those customer things, people like me with our “amateur” perspectives who use these planes that are purchased by airlines and pay for your supposedly “professional” opinion) choice will drive airlines to upgrade to the new aircraft. The QF reduction in 747-400 First Class is simply the first step in that process.

  Let me know if that’s too hard for you to understand Mike M.

• 45. Rob  |  May 28th, 2009 at 00:22

  

  Vero post 23.

  The logic is pretty straight forward.

  I travel for business.

  I have the choice of 747-400 or A380 services.

  The A380 is new, clean, exceptionally quiet, has lie flat seating, has wider seats.

  I look at these things and I logically choose to go with the superior A380 product for the same cost.

• 46. Rob  |  May 28th, 2009 at 00:26

  

  Boeing Investor post 24:

  You are correct, equally at present my flights are on the main routes covered by the A380 (preedominantly SYD-LHR) so when given the option I arrange my itinerary around A380 flights wherever possible.

  If this reflects a wider trend then more airports will become A380 capable reflecting customer choice, this will relieve some congestion in terms of slots and nearby residents will be happier as the A380 is quieter for them as well.

  And just so I can’t legitimately be accused of being an Airbus fanboy, I expect those same advantages will apply to the 787 as well which will prompt more and more airlines to upgrade to the new jets as customer choice drives load factors higher on them compared to teh older aircraft.

• 47. Rob  |  May 28th, 2009 at 00:34

  

  As to the remaining comments my observations (as a passenger) on current QF 747 customer loads are that these aircraft are less full than the A380.

  Note that this is based on observations of 2 flights only.

  So it would appear that many people are doing the same as me - when we have to fly for work we fly the new cleaner, more comfortable, much quieter A380 instead of the 747-400 where we can.

  Ultimately this is what will drive the shift to A380 and 787 aircraft - much as the airline industry has learned it would still seem that there are some who live in teh old days and fail to understand that teh customer ultimately makes the decisions by spending their money where they want.

  Smart companies analyse that and give customers what they want.

  Luckinly Mike M and Co are not in charge of business decisions or you’d be broke.

• 48. Leelaw  |  May 28th, 2009 at 06:29

  

  The “Great Satan” hit the nail on the head when he recently declared the “WhaleBus[t] to be “largely irrelevant.” Way back in July 1974, approximately 100 months after the program was launched, when the airline industry was only a fraction of its current size, Boeing had delivered 238 747s. That’s one more delivery than the combined order backlog (186) and unexercised options (52) currently tallied for the “WhaleBus[t]” program. Fast forward to May 2009, approximately 100 months after the launch of the A380 program, Airbus has struggled to deliver a mere 14 aircraft to customers, not necessarily a bad thing in the current environment. How many more months will it take to get to 238 deliveries, not to mention the (now stale) 420 units said to be necessary to reach financial break-even? Perhaps the more relevant question is how much longer will it be before the “WhaleBus[t]” sideshow finally falls of its own financial weight?

• 49. Leelaw  |  May 28th, 2009 at 06:49

  

  Sorry, my math really isn’t fuzzy, total unexercised options currently tallied for the A380 is actually 51 aircraft.

• 50. Vero Venia  |  May 28th, 2009 at 07:10

  

  45. Rob | May 28th, 2009 at 00:22 said, “I travel for business.

  I have the choice of 747-400 or A380 services.

  The A380 is new, clean, exceptionally quiet, has lie flat seating, has wider seats.

  I look at these things and I logically choose to go with the superior A380 product for the same cost.”

  Good.

  That’s your very personal choice. Now, airlines’ reality is a little different from your concern. They must make money out of the aircraft they purchase. The question is not always about passengers’ preference like yours. It is about making profit from airlines’ “production” means.

  Since you are insisting on personal choice, I’ll do the same. I have been dreaming to own a good and quiet car like a Lexus. The last model I wish to own is a Lexus L600h. The economic reality allows me to drive only an 18 years old Peugeot 205 diesel. The most interesting part of the story is that my Peugeot 205 satisfies me fully in term of the functionality I ask from a car, that is transporting me from A to B.

  So, your personal choice is one thing, airlines’ economic reality is another. The question is of course if an airline can be sure that a big aircraft like the 747-8i or a very big aircraft like the A380 can guarantee a profit for the airline.

  The A380 or the 747-8i are good aircraft per se. But are they a good economic mean for making profit? There are very-very few cases for which the answer is “Yes”.

• 51. Vero Venia  |  May 28th, 2009 at 07:15

  

  36. MPTA-098 | May 27th, 2009 at 17:14 said,
  Looks like some people are unaware that SQ’s two daily A388 flights and one daily 77W flight to LHR already carries more passengers than the three SQ 747-412 flights that used to fly the route.

  Three daily flights are not enough to put such a big aircraft. In my very simple “simulation” using my pocket calculator and colored paper strips, I found out that you need about FIVE flights to allow only ONE 450 seater.

• 52. ikkeman  |  May 28th, 2009 at 09:22

  

  35. boeing investor | May 27th, 2009 at 15:09

  I’m sorry but you’re being silly - are you suggesting that cattle class is not profitable?
  Since first class is empty and business class sees low demand these days, adding y-pax will improve yields (empty seats don’t pay and the (average) price of any class ticket is at least the cost for those (filled) seats)

  51. Vero Venia | May 28th, 2009 at 07:15
  Huh, are you suggesting any route is unprofitable for 450+ a/c unless it’s serviced by a minimum of 5 flights a day?
  If so, what was that link again where you detail your estimation?

  48. Leelaw | May 28th, 2009 at 06:29
  Was the airline industry just a fraction of it’s size? in number of aircraft that is, not pax/miles flown.
  It was smaller, I’m sure - but the 747 was a much larger improvement over it’s predesessors than the 380 can be (law of diminishing returns).
  Also, the ability to buy combo, or quickly change an 747 from pax to freight must have helped a lot. If the seats can’t be filled (yet), fill the floor.
  The suspended animation of the 38F if Boeing’s Biggest Success for Decades - that includes the 787.

• 53. Vero Venia  |  May 28th, 2009 at 10:01

  

  52. ikkeman | May 28th, 2009 at 09:22 asked, “Huh, are you suggesting any route is unprofitable for 450+ a/c unless it’s serviced by a minimum of 5 flights a day?”

  Yes sir.

  If you do not want to take too much risk and keep a maximum flexibility in order to keep the concerned route profitable even when there is a downturn like the one in which we are living today, you need high frequency before you can put a big or a very big aircraft.

  I can’t link you to my pocket calculator and my colored paper strips. But you can do it yourself. It takes you about six hours of “simulation” trying different configurations of aircraft on the route.
  Perhaps clever people can do the same using Excel, but I love doing things the “old” way. It’s more visual and more intuitive.

  If you want to do it, imagine a route with a big enough traffic (don’t forget your competitors). Then you allocate your aircraft to the route. Now, introduce variation to your passenger flow (V=U +/- u). You also have to consider that passenger flow V is seasonal. Cut colored paper strips (your fleet) and put seat count on each. I put Red for 460 seater, Blue for 274 and 325 seaters and finally Green for 230 and 274 seaters.
  Run your simulation and draw your own conclusion. Don’t forget the notion of “spill” during the simulation.

  Frankly, I was shocked the first time I have to make that conclusion. I ran again the simulation and came to the same conclusion.

  I admit that there may be specific conditions that push you to put big or very big aircraft on your route. But I think, if you take into account the risk correctly then you come to the same conclusion as mine.

  That’s the reason why I understand today why Boeing estimated about one hundred 747-8i to sell. The market of 450+ seater is small and a significant chunk of that market has been taken by the A380. Don’t expect to see many A380 and 747-8i sales in the coming years.

  http://verovenia.wordpress.com/2009/05/18/dreamfleet/

• 54. MPTA-098  |  May 28th, 2009 at 11:25

  

  Vero Venia: “Three daily flights are not enough to put such a big aircraft. In my very simple “simulation” using my pocket calculator and colored paper strips, I found out that you need about FIVE flights to allow only ONE 450 seater.”

  With all due respect, you’re not making a living out of doing such analysis, are you?

  Your seriously flawed moddeling does not take into account that long-range international services differ form domestic services in that of time-zones. Departures from Asia to Europe, for example, are primarily concentrated in the late evening, in order to arrive in Europe early in the morning. To dispatch a flight from Singapore at 3 or 4 AM is not feasible at LHR. Because of this overlooked fact, you have a bunch of departures within a very narrow time window on these routes.

  Boeing investor: “Whichever way its sliced, the A380 does not have the lowest trip costs right now and no matter how many sardines you pack into it - it will not make money. I bet SQ’s sole 777-300ER flight to LHR, for example, makes it more money than does one A380-800 flight any any given day.”

  Actually, due to the “collapse” in lower deck cargo demand, SQ’s 77Ws additional cargo revenue potential has currently no, or little value over that of the A380. And since the CASM of the A380 trumps that of the 77W, you’d better present the current load factors in Y for SQ’s 77W and A388 flights respectively on the LHR route. If not, your “bet” that the 77W makes more money on the route is nothing but an uninformed opinion.

• 55. Falcon  |  May 28th, 2009 at 14:24

  

  “Way back in July 1974, approximately 100 months after the program was launched, when the airline industry was only a fraction of its current size, Boeing had delivered 238 747s.” Leelaw

  So what?

• 56. Leelaw  |  May 28th, 2009 at 14:38

  

  @ Ikkeman

  Of the 238 747 deliveries through July 31, 1974 I cited in my earlier reply, two were 747-200Fs, three were 747-200Cs, and no 747-200Ms had been delivered yet. Isn’t that essentially immaterial to the total? IMO, it’s futile to seek parallels/comparisons with the “early” history of 747 program in order to rationalize the financial black hole and marketing failure that is the WhaleBus[t], because upon close scrutiny they all prove to be essentially meaningless.

• 57. boeing investor  |  May 28th, 2009 at 14:42

  

  MPTA-098

  “your “bet” that the 77W makes more money on the route is nothing but an uninformed opinion.”

  Rather akin to your modelling in favor of the A380 on the LHR run too. But I digress.

  Ikkeman

  “I’m sorry but you’re being silly - are you suggesting that cattle class is not profitable?
  Since first class is empty and business class sees low demand these days, adding y-pax will improve yields ”

  I didnt suggest it wasnt profitable - rather, its not as profitable.

  Load factors will go up, not yield if all a carrier does is add econ passengers in place of First or Business. The costs for moving more econ customers is higher than a handful of First class people and their revenue is offset by added fuel costs etc.

  Simple math -

  10F, 35Biz and 150Econ.

  0F, 12Biz and 220Econ.

  Very simplified, but which one will make more money? (route/pricing specifics not necessarily required for such a basic model)

• 58. Leelaw  |  May 28th, 2009 at 15:10

  

  “So what?”

  The comparison is intended to show that the 747 program was a commercially viable enterprise 100 months after its launch, while the WhaleBus[t] program 8 1/2 years after its “industrial launch” an essentially moribund project still in search of compelling business case for its manufacturer. But I’m never gonna convince a dye-in-the-wool Airbusier like you, am I?

• 59. MPTA-098  |  May 28th, 2009 at 16:19

  

  boeing investor: “Rather akin to your modelling in favor of the A380 on the LHR run too. But I digress.”

  Wrong, you bet the 77W is doing better on this route without presenteng a shred of evidence. It’s not “modelling” to state that the A388 is beating the 77W on CASM. SQ’s A388s have an average fuel burn of around 47-49 percent more per trip than SQ’s 77Ws, while carrying 50 percent more seats in F/R, 43 percent more seats in C, and 75 percent more seats in Y. For the sake of argument, and assuming equal (percentage) load factors in F/R and C, it’s clear that the A388 has a lower break-even factor in Y than the 77W.

  Again, failing to come up with some sort of documentation supporting your “bet” that the 77W supposedly makes more money on the LHR route, is still nothing but an uninformed opinion.

• 60. Dougloid  |  May 28th, 2009 at 16:22

  

  Leelaw sez “So what?”

  Air commerce is like a lot of other things. You’ve got to balance “one big daddy” against a broad based, flexible model of marrying demand and supply. Like the notion of distributive power in the electricity business.

  Depending on who you are and where you are in time and space, these polar opposite models can be useful, but we’re starting to see the advantages of Deming flexibility and adaptability as compared to Taylorist rigidness of structure and ‘one best way’.

  Of course Taylorism was good in its time, but what it did not do was recognize and value the individual-something we now see is of signal importance. Taylorism was the best system in the days of the tin Lizzie, but it’s an idea whose time has come and gone.

  And therein lies the difference between the view from Seattle and the view from Toulouse. One is rooted in the past and one looks to the future.

  Look at it another way. Moving lots of stuff (cargo, people, it doesn’t matter) at one time in big shipments has its advantages if you’ve got all the demand you need and all the time in the world. But if demand is spotty or uncertain, you don’t need a Kenworth when a Ford pickup will do as well. What Boeing’s said is that, all things being equal, a fleet of Ford pickups going anywhere you want when the customer asks is better than a single Kenworth.

  So. Lemme have a ‘nother swig of Koolaid, ‘Law. All this infernal palaver is making me thirsty.

• 61. Falcon  |  May 28th, 2009 at 16:27

  

  Leelaw,

  So I guess the C-17 wasn’t on commercial terms for McDonnell Douglas then?

  Where have I said the A380 has a compelling business case? What I find interesting is how many people show such a hatred for the A380 that they use different yardsticks for it, can’t look at it as just another program. Then of course if they get questioned they must claim Airbusier

  Using the same yardstick my outside view says there were valid business reasons to launch the A380 but it never had a large upside. The delays killed it. Now it is a matter of what is the best option from here on. Will continuing bring better net result than shutting down production? I don’t have the answer and I doubt you do.

  If being prepared to use the same yardstick for everything I evaluate makes me an Airbusier then I’m proud to wear that tiltle. Sadly, I don’t think it us how it should be measured.

• 62. boeing investor  |  May 28th, 2009 at 17:27

  

  “SQ’s A388s have an average fuel burn of around 47-49 percent more per trip than SQ’s 77Ws, while carrying 50 percent more seats in F/R, 43 percent more seats in C, and 75 percent more seats in Y. ”

  Equally, you failed to provide any meaningful numbers to refute my bet either.

  Yours too is nothing but an uninformed opinion with nothing to substantiate your claims. Just because the A380 has more seats etc etc, it does not mean they’re full.

  I’m surprised commentor “Heathrow Guy” hasnt come into the fray - seems he has some insight into SQ’s LHR services.

• 63. MPTA-098  |  May 28th, 2009 at 18:25

  

  “Yours too is nothing but an uninformed opinion with nothing to substantiate your claims. Just because the A380 has more seats etc etc, it does not mean they’re full.”

  Again, mine is an informed opinion which is based on fact: A380 CASM is lower than 77W CASM because SQ’s A380s proportionally need less passengers in Y than SQ’s 77Ws to break-even (assuming same proportional load factors in F/R and C, and not the least; little, or no demand for additional lower deck cargo revenue). It looks like SQ’s A380s are doing “ok” in Y in the LHR route. For SQ’s 77W to “make more money” [or loose less money :-)] in this economic environment, it needs a higher relative load factor in Y than the A388. Simple as that.

• 64. mike j  |  May 28th, 2009 at 19:16

  

  I think if the airlines simply take out (remove) 1/3 of all the seats they’ll get better fuel economy (because a lighter load) AND passengers might feel happier being less cramped.

  I’m not sure where the revenue vs fuel economy equation becomes optimum, but at the same time IF so many planes are half empty already why keep flying the extra weight around ?

  At the same time, I think every airliner ought to be convertable (at least partially) to cargo anytime the airline feels the need.

• 65. Vero Venia  |  May 28th, 2009 at 20:07

  

  54. MPTA-098 | May 28th, 2009 at 11:25 said, “Your seriously flawed moddeling does not take into account that long-range international services differ form domestic services in that of time-zones. Departures from Asia to Europe, for example, are primarily concentrated in the late evening, in order to arrive in Europe early in the morning. To dispatch a flight from Singapore at 3 or 4 AM is not feasible at LHR. Because of this overlooked fact, you have a bunch of departures within a very narrow time window on these routes.”

  That is exactly why there won’t be many A380 and 747-8I sales in the coming years. VLA market is a small niche market.

  What you forget, the destination for a traveler is not LHR but LONDON. There are many airport around London.

  Another thing you forgot, is the fact that the most dense routes are below 4,000 nm.
  Surprise? Oh yes it is very surprising but that’s the reality.

• 66. Vero Venia  |  May 28th, 2009 at 20:14

  

  Please let me remind you a very hard fact about the VLA.
  Launched in December 2000, the A380 has garnered only 200 orders in 2009 (in almost nine years).
  Launched in 2006, the 747-8i has today 27 orders.

  What can you expect in the coming years?

  Don’t forget that many A380 and 747-8i were ordered before the launch of the A350-1000XWB. The A350-1000XWB, as specified today, is much better for long haul than the A380, 777-300ER or the 747-8i.

• 67. Aurora  |  May 28th, 2009 at 22:10

  

  Vero Venia: “Another thing you forgot, is the fact that the most dense routes are below 4,000 nm.
  Surprise? Oh yes it is very surprising but that’s the reality.”

  Never knew that, Vero. Not that I want to dispute you, but do you have a source for this and other route info? That would make it tough to sell Whalejets & 748Is.

• 68. boeing investor  |  May 28th, 2009 at 22:20

  

  “CASM is lower than 77W CASM because SQ’s A380s proportionally need less passengers in Y than SQ’s 77Ws to break-even”

  If the A380 had just econ pax and the 77W had just econ pax, any mathematician will tell you that the A380 is not the cheaper option. Period.

  Your uninformed opinion has and relies upon too many variables which you are skewing to falsely justify than a heavier airplane that uses more fuel for the same number of pax from Singapore to Heathrow somehow costs less to operate than a 777-300ER.

• 69. Vero Venia  |  May 28th, 2009 at 23:09

  

  67. Aurora | May 28th, 2009 at 22:10 said, “Never knew that, Vero. Not that I want to dispute you, but do you have a source for this and other route info? That would make it tough to sell Whalejets & 748Is.”

  Very long routes above 6,000 nm are “usually” relatively thin routes. If you wish to know more you have to get access to databases like the one offered by OAG. http://www.oag.com/oagcorporate/

  I agree with you that it will be very tough to sell A380 and 747-8i.
  The issue when you are trying to sell those aircraft is more about “risk management” than simple frequency vs capacity debate.
  Today, some airlines learn the hard way that big and very big aircraft are inherently risky (in financial terms).

• 70. Chris Wallace  |  May 28th, 2009 at 23:56

  

  As much as a fan and supporter of the A380 program as I am, thanks to the benefit of 20-20 hindsight the program would not have been overwhelmingly successful even if it had been on time and on budget.

  The 777-300ER was just too damn good.

  And what I mean by that is all the 747-400 airframes Airbus expected to be replaced with A380-800s were instead replaced by 777-300ERs. Part of this was because the 777-300ER matched the 747-400’s range. Part of it was the 777-300ER is more economical to operate. And part of it is the significantly more voluminous cargo holds.

  I know many claim that airlines only ship luggage and atmosphere in their holds, but the fact is the A380-800 was designed to offer about as much space after passenger bags as the 747-400 does while the 777-300ER offers a dozen or more extra positions beyond that.

  In 2000, Airbus believed they would sell 1000 A388s and Boeing believed they would sell a couple hundred 777-Xs (77L/77W/77F).

  But in 2010, it looks like it is the 777-X that will reach 1000 (well, maybe 750) while the A380 is struggling to stay north of 200.

  And Airbus didn’t announce the EIS delays until the middle of the largest airline ordering boom in at least recent history so it really cannot be considered the sole and root cause of the A380’s sales trend. And if airlines were clamoring for a VLA, they could have had the 747-400 during that time, but they didn’t buy it or the A380.

  I admit to being skeptical of the original 250-frame “break-even” point. I firmly believe the A380 will never recover it’s costs, much less make a profit, but I am also firmly on record as saying that doesn’t matter and bringing it up serves no purpose other then to make pedantic snipes, IMO. Airbus didn’t have anything else to spend the money on and they had no private shareholders to return that equity to in the form of dividends or such (the shareholders were the governments and they already were receiving a dividend in the form of all the taxes and RLI interest payments and royalties Airbus was making).

  As for customer preference, it stands to reason that SQ, EK and QF have substituted the A380 on their most popular departures, which would have formally been run with 747-400s. So I expect it’s not so much a case of passengers specifically booking the A380 as passengers continuing to book the departure that best suits them and that departure just happening to be operated with an A380 instead of a 747.

  I have flown the A380 in First Class and I do like it far more then the 747, but then I also like the 777 in First Class far more then the 747. I don’t like the nose - it’s cramped with 12 seats.

  But if the choice was a 747 at a convenient time or an A380/777 at an inconvenient time, I’d take the 747.

  And in the interests of full disclosure, I drive a Lexus L600h.

• 71. Falcon  |  May 29th, 2009 at 00:30

  

  BI wrote “If the A380 had just econ pax and the 77W had just econ pax, any mathematician will tell you that the A380 is not the cheaper option. Period.”

  Do you define cheaper as trip cost or cost per seat? If by trip cost then sure but a 737 or A320 would be even cheaper.
  If you got it right and mean cost per seat the just for fun I showed your comments to my friends at the leasing company. Granted they have neither A380 nor 77W in their portfolio but I trust what they said way above you and to be nice they said you’re wrong. Simply put, if what you claim was true, most of the A380 orders would never have happened and every single one would have been canceled by now.

  We are all familiar with your SOP so I expect you to through some “stupid” and similar FOD but nothing substantial.

• 72. Dougloid  |  May 29th, 2009 at 05:04

  

  Falcon sez “So I guess the C-17 wasn’t on commercial terms for McDonnell Douglas then? ”

  No, it wasn’t, and I was there. First major difference. Uncle Sugar paid for the development starting back in the mid seventies and progressing until it seemed that the C5, although an admirable s**t hauler had its limitations, most importantly that of the runway length that it required. Parenthetically, Lockheed made many efforts to derail the C-17 with C5 vaporware variants.

  Here’s what Uncle said to Douglas: “Here’s what I want. I want an airlifter that’ll put an all up, ready to fight M1 Abrams tank and crew onto a 5,000 foot unimproved strip, and will do it with three crew members. I want to drive it out onto the battlefield. And I want it to do a lot of other stuff as well but that there is the primary mission. Here’s the checkbook, make it happen. Oh, and by the way, I am also paying for a brand new building to make it in and all new tooling which will be mine.”

  When you’ve ridden the handcar down through the belly under the floor as I have, and seen what’s there for floor beams, you know exactly what it was built for.

  There was no speculation about potential markets although everyone realized that if the deliverables were good enough, a lot of them would be built and sold to a lot of people, because people would soon figure out if you have that much in the way of heavylift capacity and short field-high and hot capability, you’ll think of all sorts of interesting and useful tasks for it.

  The aircraft was designed around the mission rubric. Commercial productions are a little bit different. There, you actually have to go out and sign people up and sell them on the utility of your product. And even then they have money problems down the road which makes the whole notion of firm orders kind of tenuous even in the best of times.

  Boeing Investor sez “Just because the A380 has more seats etc etc, it does not mean they’re full.”

  That’s the entire point of this whole discussion, which some people seem to ignore. If you build it, they may not come.

• 73. boeing investor  |  May 29th, 2009 at 05:43

  

  “We are all familiar with your SOP so I expect you to through some “stupid” and similar FOD but nothing substantial.”

  Had it not been for your needless ignorance, I’d have happily clarified my point to you. Since your fence-sitting goad attitude has kicked in, you can forget it. No its not a “cop out” - I’ve been more than respectful on this discussion and your salvo here was unwarranted frankly.

  “Boeing Investor sez “Just because the A380 has more seats etc etc, it does not mean they’re full.”

  That’s the entire point of this whole discussion, which some people seem to ignore. If you build it, they may not come.”

  This is why MPTA-098’s argument holds zero credibility on whether the SQ A380 makes more money than 77W on SIN-LHR flights.

• 74. Vero Venia  |  May 29th, 2009 at 07:47

  

  70. Chris Wallace | May 28th, 2009 at 23:56 says, “And in the interests of full disclosure, I drive a Lexus L600h.”

  Is it as good as I imagine? I mean is it quiet and comfortable?

• 75. Vero Venia  |  May 29th, 2009 at 08:09

  

  70. Chris Wallace | May 28th, 2009 at 23:56 said, “The 777-300ER was just too damn good. “

  The 777-300ER is good, but it is not as good as it should be. There is much room for improvement for the 777-300ER.

  I would qualify 777-300ER’s virtual monopoly in the 300-400 market as an “anomaly” in recent aviation history. The 777-300ER does not have any serious contender and that is why it is where it is today. It is even more surprising that the first possible contender will enter into service only in 2015 or 2016.

  I think the luck of the 777-300ER is due to Airbus’s appreciation mistake concerning the progress of technology. I still remember about this very interesting article http://www.flightglobal.com/articles/2003/01/21/160569/airbus-calls-for-lrops-unity.html

  Boeing bet on the progress in engine technology (automatic relight, engine monitoring system etc) and built their product strategy around efficient twins. In my humble opinion, the A350XWB launch is a kind of endorsement of Boeing’s strategy.

  You can hardly deny that twins now fly most long range routes. http://www.boeing.com/commercial/aeromagazine/articles/qtr_2_07/article_02_6.html

• 76. ikkeman  |  May 29th, 2009 at 08:52

  

  57. boeing investor | May 28th, 2009 at 14:42
  all other things being equal, and with the demand to fill any of the higher class seats, and with demand to fill the empty space in the belly those “high profit” pax leave - yes, you’re right… now show me
  a: that the 77W is in any way equal to the 380
  b: that the demand exist (in near or mid term) to fill any of the expensive seats
  c: see b for cargo
  d: you fail to take into account the difference in CASM.

  CASM of the 380 is greater simply because it burns less fuel per floorspace. anyway profit you make from the 777 you can make from the 380 while offering your pax more space - or offer them the same space and carry more of them, increasing profit.
  Ofcourse this assumes the demand exeeds the 777 sulpplied ASM by some 25%.

  68. boeing investor | May 28th, 2009 at 22:20
  are you a mathematisian - at least you’re not a real reader, are you - he was talking Cost per Available Seat Mile - That’s cost divided by (number of seats multiplied by range). Yes the 380 is more expensive to fly, but the question is one of Return On Investment.

• 77. Vero Venia  |  May 29th, 2009 at 09:24

  

  76. ikkeman | May 29th, 2009 at 08:52 said, “Yes the 380 is more expensive to fly, but the question is one of Return On Investment.”

  Today, some airlines learn the hard way that investment in big and very big aircraft is inherently risky.

• 78. Leelaw  |  May 29th, 2009 at 11:19

  

  “What I find interesting is how many people show such a hatred for the A380 that they use different yardsticks for it, can’t look at it as just another program.”

  I don’t hate the A380 per se, I think her wings are among the most magnificent things ever manufactured by man. I’ve been a passenger on her three times now, and have thoroughly enjoyed the ride, save for some drunken Aussies on my first trip who were way too loud in a very quiet cabin… However, as a student of the history of this industry, what I do dislike, indeed find repugnant, are the false historical parallels/revisionist history employed by some to blithely rationalize away the industrial, financial, and marketing failure that is the “WhaleBus[t]” program. I also find it annoying that those who raise legitimate questions about various aspects relating to the A380 program are immediately labeled as “bashers” by the die-hard (often fatuous) A380 aficionados.

• 79. Aurora  |  May 29th, 2009 at 14:02

  

  As if we needed more validation that long haul and premium were suffering. A perspective from Asia:

  http://www.flightglobal.com/articles/2009/05/29/327123/asian-carriers-most-adversely-affected-by-downturn-aapa.html

  “Business traffic and long-haul leisure traffic will take longer to recover, he says, adding that “people don’t make impulse buys for long-haul trips.”

  Herdman declines to say when the recovery in long-haul travel will begin because it depends on when the North American and European economies recover.”

  Again, it comes down to filling the planes.

• 80. Dougloid  |  May 29th, 2009 at 15:06

  

  ikkeman sez “b: that the demand exist (in near or mid term) to fill any of the expensive seats
  c: see b for cargo
  d: you fail to take into account the difference in CASM.

  CASM of the 380 is greater simply because it burns less fuel per floorspace. anyway profit you make from the 777 you can make from the 380 while offering your pax more space - or offer them the same space and carry more of them, increasing profit.
  Ofcourse this assumes the demand exeeds the 777 sulpplied ASM by some 25%.”

  Youse guys are always talking about CASM as if it’s some sort of magic mantra that expunges all the other bad stuff.

  I personally think you do it because it sort of sounds like “orgasm”-that wet and creamy feeling you get when Il duce John Leahy opens his mouth for yet another pronunciamento or when Barbara Kracht sets the record straight with yet another Papal Bull Against the moon-now THERE’S a name, huh?

  All humor aside-which I doubt any airbus fanboys will appreciate- let’s dissect a little.

  Cost per available aircraft seat mile is a squishy concept and it really comes down to what you put in and what you leave out. If we take it as steady state cruise fuel burn divided by the available number of seats, that’s one index. But it’s inadequate as an apples to apples index of comparison because it assumes that all seats are full. On the other hand, if we take steady state cruise fuel burn divided by available seats and all those seats are really full of people and baggage, all of a sudden your steady state cruise fuel burn goes to pot.

  Here’s how that figure varies from the real world. Hypothecate a Cessna 172 with three passengers and a pilot en route from Des Moines to Omaha. Then run the same route with an A380 with three people on board.

  The cost per available seat mile doesn’t vary, but the reality is that in the one case, the vehicle is not properly married to the available carriage. So which is really more efficient?

  It depends on casm, of course, but that is ONLY a starting point for the discussion, rather than a destination or the ultimate arbiter. One of the more significant indices of efficiency is whether you actually have the aircraft you were promised to run your route.

  Real world comparative efficiencies takes into account a lot more than a synthetic efficiency index that leaves out more than it includes.

  Now. Trouble me no more about casm.

• 81. MPTA-098  |  May 29th, 2009 at 18:39

  

  Vero Venia: “That is exactly why there won’t be many A380 and 747-8I sales in the coming years. VLA market is a small niche market.”

  On the contrary, the bean counters at the blue chip Asian/Australasian airlines (and their European competitors) want to maximise profit and i.e. will consequently maximise CASM and fly one A388 ( later on the A389) instead of managing two departures within an hour in the late evening on smaller aircraft such as 77Ws and/or A35Xs; at a time of the day when “frequencies” truly are irrelevant!

  Vero Venia: “What you forget, the destination for a traveler is not LHR but LONDON. There are many airport around London.”

  Come on, you’re making this up, aren’t you? Why, for example, are the major american airlines clamouring to get into Heathrow due to the open skies treaty? Blue chip airlines are NOT going to land at STN, and LGW is seemingly not that sought after by the blue chips either.

  Vero Venia: “Another thing you forgot, is the fact that the most dense routes are below 4,000 nm.
  Surprise? Oh yes it is very surprising but that’s the reality.”

  On the major routes from SEA and NEA to the major european hub airports, significantly you’re on average more than 1,000 nm short (”great circle”), and that’s the reality.

  http://gc.kls2.com/cgi-bin/gc?PATH=bkk-fra%0D%0Asin-lhr%0D%0Ahkg-lhr%0D%0Ahnd-cdg%0D%0A&RANGE=&PATH-COLOR=red&PATH-UNITS=nm&PATH-MINIMUM=&SPEED-GROUND=&SPEED-UNITS=kts&RANGE-STYLE=best&RANGE-COLOR=navy&MAP-STYLE=

  boeing investor: “This is why MPTA-098’s argument holds zero credibility on whether the SQ A380 makes more money than 77W on SIN-LHR flights.”

  This is a classic straw man fallacy. I’ve never said that in the current economic environment, the A380 makes more money than the 77W for SQ on the LHR route. What I’ve indicated is that since traffic in cattle class seems to be holding, I can’t see why the 77W should be doing better than the A388 considering (i) the lower CASM — ably explained by ikkeman — and (ii) that the 77W is currently producing little, or no additional revenue on the lower cargo decks.

• 82. Dougloid  |  May 29th, 2009 at 20:01

  

  MPTA sez: “This is a classic straw man fallacy. I’ve never said that in the current economic environment, the A380 makes more money than the 77W for SQ on the LHR route. What I’ve indicated is that since traffic in cattle class seems to be holding, I can’t see why the 77W should be doing better than the A388 considering (i) the lower CASM — ably explained by ikkeman — and (ii) that the 77W is currently producing little, or no additional revenue on the lower cargo decks.”

  Your argument sounds like “they’re just as bad as we are, ergo, we’re better.”

  Sorry. I’m having a WTF moment over this.

• 83. ikkeman  |  May 29th, 2009 at 22:11

  

  80. Dougloid | May 29th, 2009 at 15:06

  I did state in the same post as you reference:
  ” Of course this assumes the demand exceeds the 777 supplied ASM by some 25%.”

  Yes, when you fill the 777 and 380 with the same number of people, the 777 will make more money. But when the extra luxury/space/comfort (in the 380, just cause it’s newer, not cause it’s Ab) allows you to steal additional traffic from your competitors, and you fill the 777 and 380 with the same load factor, the 380 will win.

  Let me make one thing clear: I strongly doubt that the 380 will be a financial winner for the bus company. I don’t believe it’s an economists darling - but it is beautiful to behold, a superb engineering marvel and simply to expensive to stop.

  82. Dougloid | May 29th, 2009 at 20:01
  The reverse is true to…

• 84. Vero Venia  |  May 29th, 2009 at 22:35

  

  81. MPTA-098 | May 29th, 2009 at 18:39 says,c “On the contrary, the bean counters at the blue chip Asian/Australasian airlines (and their European competitors) want to maximise profit and i.e. will consequently maximise CASM and fly one A388 ( later on the A389) instead of managing two departures within an hour in the late evening on smaller aircraft such as 77Ws and/or A35Xs; at a time of the day when “frequencies” truly are irrelevant!”

  Nope. Those bean counters will find out soon that a packed A350-1000XWB is much more profitable than the A380.

  Let’s wait and see. In only four years we will have the answer. If A380 orders takes off, to 350 orders in 2013, I would be willing to admit I am wrong. No problem.

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