With news that the first A380s have been sent to the scrapyard, you might imagine there is little or no second-hand market for the world’s largest commercial aircraft, the Airbus A380.
But surprisingly, there is a small second-hand market for the aircraft. However, the details of leases make getting an A380 more complicated than you may think.
What are the customers for second-hand A380s?
So far, there has only been a single customer acquiring a single secondhand Airbus A380 – Hi Fly.
The Portuguese wet lease airline has rented an ex-Singaporean Airlines A380. This aircraft comes complete with exclusive first class suites, an entire cabin of business class seats and a full complement of economy (specifically, 12 first, 60 business, 399 economy seats)
Such a large aircraft is very useful for other airlines looking for instant capacity (for example if one of their own aircraft is down for maintenance) or for charter routes. So far the aircraft has been very popular on transatlantic journeys (from London to New York) as well as deep into the Indian Ocean (Paris to Reunion).
Hi Fly has said that they are interested in another A380 sometime in the near future. As several first hand A380s have been retired by airlines since and Hi Fly has not snapped them up, clearly they’re not that keen. But perhaps it’s more to do with the contract for the aircraft than the planes themselves…
What are the contracts like for an Airbus A380?
Looking into the airframe leasing company Doric, we can see what the terms and conditions are applied to an A380 lease:
- Five years seems to be the length of an A380 second hand lease, with a first hand lease being around 10 years. Some airlines with 10-year-old A380s opted to actually buy new A380s as oppose to renewing existing A380s (there were some minor design changes that make the newer A380s more economical).
- The lease cost itself is still very hush-hush, but logic would presume that it is very cheap. A new A380 costs around $444 million USD, and we would expect a second hand lease to be significantly less. Because of the lack of demand for the type, it would be a buyers market and lessors would be renting them away for practically nothing.
Are there any downsides?
There are some hidden costs involved in a second hand lease.
Whilst Hi Fly has proven that they are able to walk in and pick up an A380 in its existing Singapore cabin configuration (which is brilliant for those not expecting to fly in a private suite), the majority of other airlines who might be interested in a second hand A380 will want to modify the interior (for example turning them into all economy).
And this is where it gets very expensive, perhaps more expensive than the A380 lease itself with estimations of costs ramping up to over $40 million USD. This is thanks to the original engining of the first few A380s that are complex and difficult to change.
If you want to dive into this topic in detail, we go over the possible markets for a second hand A380 in this article here.
What do you think about these lease conditions? Let us know in the comments!