Louis Gallois admission that Airbus’ flagship A380 will experience another period of languishing sales comes as no surprise.
What is surprising is that Gallois is “absolutely convinced” it would be a “success” ignoring the fact that despite being on the market for a decade, it has more than doubled in cost to produce yet cannot sell in any large enough numbers despite the heavy discounting to entice buyers in the first place.
Despite the biggest order boom in aviation history between 2005-2007, the A380 failed match the huge orders seen for the A330, A350, 777 and 787 and now has even less prospect of garnering future business as frequency growth takes charge.
(Shoot The Dog Part One, Shoot The Dog Part Two, Shoot The Dog Part Three, Shoot The Dog Part Four)
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“They [airline orders] will probably only become significant towards the end of 2011 or early 2012,” laments Gallois, notwithstanding the fact the delivery target this year of 20 units will not be achieved with Korean Air’s first example being delayed into the first half of 2011.
So already, the A380 target this year has been missed – and it will likely be revised down further in the wake of the recent Toulouse work stoppages.
The production system, supply chain and factory work being done literally by hand hasn’t aided Airbus goals to produce more A380′s, but with airlines tripping over themselves to defer the loss-making jet, Airbus will be pleased that prolonging the delivery agony gives it time to find new business.
Less than one unit per month this year has been delivered – while that is revenue into the kitty, it does nothing to offset the billions of dollars of losses accrued on sales that had been “won” during the last decade.
In the wake of volcanic ash disruption, murmurs from within British Airways are emanating from two camps – one favouring a further deferral to the A380′s it has on order with another orchestrating a move to slash the orders and cancel the rest to combat the financial plight the carrier is stuck in. An announcement could be made as early as this month when the airline reports its year end earnings.
Obviously a cancellation, or even deferral would be yet another massive blow to the already beleaguered A380 program – and the longer it takes for Airbus to overcome the production and in-service reliability issues, the older and more inefficient the design and engines become in contrast to more hot selling jets like the A350XWB and 787.
Between now and 2012, the A380′s woes will continue – the question is whether this industrial failure blights the prospects of the A350XWB, itself struggling to meet the mid-2013 service entry deadline.
