Spin On This
During the Dubai Air Show late last year, John Leahy repeatedly emphasised various points about the Airbus A380 to his audience.
To his credit, a video showing an A380 at Heathrow Airport claimed that it could be turned around faster than a 747 was impressive to say the least. Of course the recent spate of highly embarrassing glitches on the A380 overshadows much of its achievements in bringing a few more inches of legroom to passengers in all cabin classes, as well as on-board showers if that sort of thing appeals to you.
Leahy went on to discuss how the A380 “increases revenue” without verifying this from any of the (then) three operators at the time - again, marketing comments aside, it was flattering to hear. Let us not forget that this is the same fellow who also claimed that the A380 would break even at “65% load factor” - of what composition that is in terms of passenger yields is anyone’s guess but despite the hype behind the worlds biggest flying passenger machine, often dubbed the “Whalejet”, the ominous silence about profitability comes to the fore.
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Singapore Airlines has during the last six months at least, struggled to fill the top end seats of the A380 services deployed to Heathrow. Emirates too, forced recently by the German Government to bump up its business fares to stop Lufthansa losing customers, has found that filling the first and business class on its A380’s a more difficult task than they imagined. Qantas too, only weeks after taking delivery of their third A380 last year announced they’d be changing their configuration to account for the weaker traffic in the high yield seating block, or even curtail services on various other routes on its operations - a costly exercise if ever there was one for something so new.
As we know, the model of high-fare reliance for legacy, full service airlines is dead.
Pretty much just like how the $25bn+ business case for the A380 has been dead since its birth (see Shoot The Dog - Part 3).
So the question is simple - which of the A380 operators can claim they’re making money with them?
Its all well and good writing puff-pieces packed full of PR spin about how customers are happy with performance, low cabin noise and the like, but that no operator thus far, in over two years of operation, talks about profit potential of the airplane further underscores the difficulties the A380 is having in actually being a money-spinner.
Volume through low yield fares doesn’t make for profitability. Ask Emirates.
So while the A380 program reels from financial, production and in-service challenges, the customer base, albeit small, faces the bigger challenge of actually making money.
Perhaps they will one day - as of now, consumer trends point to the back of the cabin, not the front. That’s why long range twin-jets like the A330, A350, 777 and 787 will always secure more orders than Toulouse’s not-quite-so-finest quadjet.
178 comments January 18th, 2010
