Shoot The Dog (Part Three)
Now that 2009 is over, the A380 production (or delivery) target for this year comes into focus.
Quite frankly its irrelevant how many units are handed over - the airplane has suffered a string of high profile in-service setbacks (Google!) and the fragility of this behemoths viability in a large airplane marketplace that is disappearing each and every day shows that the decision to adjust production last year serves only to prolong the agonizing (and dwindling) backlog until new orders emerge - if at all.
(Shoot The Dog Part One, Shoot The Dog Part Two)
The latest A380 operator, Air France, is just another airline that joins the long list of embarrassing incidents that have plagued the big Airbus jet.
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“The trouble is that you can’t replace the aircraft with another one.
That’s the privilege of being big. Nobody can replace you.
Disembarking 400 or more passengers and luggage, arranging transportation to hotels, re-transporting them back to the airport, re-checking them in and then re-embarking the day after - that’s a nightmare,” says one European aerospace analyst.
To be fair, there is nothing out of the ordinary that is grounding A380 flights.
Indeed, the 787, when that enters service (perhaps by the end of this year), will suffer most peoples ridicule the moment the first example goes tech.
Around half of the A380’s customer base has deferred deliveries. With the premium traffic market floating rapidly down the river Styx, John Leahy’s oft-touted “break-even at 65%” load factors are almost cringe-worthy rhetoric completely at odds with the anaemic loads and weak yields the likes of Singapore Airlines and Emirates have - especially on the hub-to-hub routes such as London Heathrow, for which the big bird from Toulouse was designed.
“Even before the current economic crisis, the A380 was clearly over-sized and over-sold. Today, customers are practically falling over themselves to defer their orders,” says Arran Aerospace’s Founder and Chief Consultant , Doug McVitie.
Whatever the goal is for handing over A380’s this year, the reality is that it’ll change anyway (after all, what’s in a number?)
Part of this is down to continued design changes that Airbus is enacting to reduce the operating empty weight. These design alterations, coming in at a significant cost to a supply chain still reeling from huge start up costs and almost no positive cash flow through deliveries means that Airbus is unlikely, if ever, to reach beyond two dozen A380’s being delivered in any one year.
No new orders are on the horizon, costs associated with the late design changes, ongoing customer penalty payments, the diversion of resources away from the A350XWB alongside a review of the entire A380 program underscores what many people have said all along - that the project is on borrowed time.
Far be it for Airbus to cull its fat lady until she has sung her last, the program will continue in “limp mode”.
The 747-8 is probably the last widebody airplane family that will ever benefit from a new engine. The A380 probably won’t get a second lease of life, particularly as ILFC is all but poised to abandon its decade old order for the quad - because the demand for it just doesn’t exist in the numbers Airbus’ marketing department would have us believe. Its post-passenger life value as a converted freighter is non-existent, and no engine maker will sign up to re-engine a relic whose world fleet is akin to that of the MD11 in numbers.
The systemic move to composite airframes, as well as composites and new materials for engine technology will mean that each new generation of airplane will benefit from new engines on a new airframe, not older airframes. Economies of scale will bring technology costs down.
Without a freighter application, the prospects of A380 longevity seem even worse - although you could argue that the cargo market weakness seen today is probably a good enough reason not to produce a freighter with limited airport compatibility.
Most of the costs on the program have already been sunk, killing the unloved, obese and inflexible A380 isn’t an option Airbus will pursue. Like most dogs, it’s been born, have a good innings during passenger operations and when orders are complete, the line will die with a forward loss that makes the A400M shudder too.
Of course, if smart guys like Richard Aboulafia, Doug McVitie and Professor Liebstrom “get it”, it was all but inevitable that the most ardent of A380 factions would eventually concur in its monumental financial failure that EADS delivered in committing to the cash-sapping A380. Second only to calamity in the $40bn (and growing) pain experienced by the A400M.
62 comments January 6th, 2010
