Despite only introducing the A380 to its fleet over ten years ago, Air France is retiring its A380s. And this early retirement is apparently costing Air France-KLM a total of around €370m ($399m). In its newly released financial statement for 2019 Air France announce it took a €126m ($136m) impairment charge for withdrawing the aircraft from its fleet.
The cost of retirement
Last year, Air France announced that it would begin phasing out its Airbus A380s. The airline stated that all 10 of the aircraft in its fleet would be retired by 2022, just 13 years after it was first introduced in 2009.
Now, the cost of retiring the aircraft early is becoming clear. Of the €126 million it paid last year, it has accredited €52 million to the accelerated depreciation of the aircraft. The rest of the charge, €74 million, applies to operational aspects of the A380 including retrofit programs, spares and penalties on contract.
What will Air France operate instead?
Currently, the airline operates 10 A380 although it only owns one of these outright. In 2018 the airline announced it would return five aircraft to their lessors. Then, it announced in November 2019 it would officially retire all A380 aircraft from its fleet. The first Air France A380 retired in January.
Initially, the airline had ordered 12 aircraft but only took delivery of 10. In 2016 it changed its order so the final two aircraft became A350s. In fact, Air France took delivery of another A350 earlier this month. It plans to operate the A3550s on several of the new routes it recently announced for the summer 2020 season.
Despite many expecting the airline to use French-manufacturer Airbus aircraft. The airline has some good things to say about Airbus’ rival, Boeing. Apparently, the decision to ax the A380 came because the operational cost was too high in comparison to the Boeing 777-300ERs. The four-engine, double-decker just doesn’t match up to the sleeker, more efficient twin-jet aircraft.
Of the Boeing 777-300ER, Air France CEO has said it is “the backbone of its long-haul routes”. Additionally, the 777-300 is the same type rating as the Boeing 787 which Air France also operates in its fleet.
In a December statement, the airline outlined its fleet plans once the A380 has retired completely. It said that by “2023, the Air France long-haul fleet will consist of 116 aircraft split amongst only four families: Airbus A330s and A350s, and Boeing 787s and 777s”.
The end of the A380
Air France is definitely not the only airline to begin phasing out its A380s. Unfortunately, the aircraft is just not sustainable when compared to modern technology. It was so unsuccessful; Airbus made a loss despite so many people loving the aircraft.
But just as Air France is willing to take a financial hit in order to upgrade its fleet, so are others. Qantas, after taking delivery of several of the aircraft then canceled the order for the remaining eight and announced it would retire the aircraft over the coming years.
The airline with the most A380s, Emirates, has also announced it will begin to retire the aircraft. Easier said than done for Emirates as it operates almost 150 of them. The cost would be colossal for them so the phase-out is going to be much slower. Initially, the airline will reduce the number to just under 100 by the mid-2020s. But it is thought that the airline will still operate the A380 until the mid-2030s. So, if you love the A380s, you won’t have to say goodbye to them just yet.