The Airbus A380 is the world’s largest commercial airliner, with a 550+ passenger capacity. It’s an engineering marvel, but development delays and demand misjudgments have plagued the project since inception. Furthermore, two recent safe landing violations have thrown the aircraft in a bad light. All this casts doubt over the future of A380 production.
A380 orders affecting Airbus’ success?
Airbus’ market stock value has more than doubled since 2013. Airbus SE went from $10.05 a share Jan. 2013 to $25.70 a share December 2017. This general market confidence is based on a great stable of products, ongoing demand and a good corporate reputation. Their stalwarts, such as the the A320 family, the A330 and the A350 continue to delight with airlines lining up to order more. This year, Qatar Airways alone have ordered 50 A321neos. And not to be out done, Delta have got 100 units of the same on the belt, with possibly a 100 more to follow.
However as is so often the case in these success stories, there is always the outlier. And it’s the A380 who’s the black sheep of the Airbus family.
A surprising announcement from Airbus
In 2015, after delivering 27 units of the A380 aircraft that year, Airbus announced for the first time that the program was in the black. Their benchmark on this massive machine is 20 units a year, but this doesn’t include the some $20+ billion dollars it has cost them to bring the design and development this far. And bearing in mind, they’ve been making it since 2005. That means the project had been losing money for ten years. But okay, we’re here now – onward and upward.
Except, this heady achievement in A380 growth was short lived. This year, they’re making 12 A380s, next year that figure is down to eight. Which begs the question – why are they even still making it? There are two answers to this, one generous, one not so much so. Let’s get the controversial one out of the way now so we can end on a good note.
Airbus commercial aircraft chief, Fabrice Bregier, loves this plane. And some claim he’s trapped in the gambler’s fallacy. He knows how much is sunk in this project, and he’s willing to sink more in the hope of turning it around. He’s using the old, “Money attracts money,” philosophy, looking towards Emirates to attract A380 growth. If Emirates buys and operates the aircraft, more airlines will follow. Also, the second hand models will hold their value and encourage new sales.
But even if Emirates’ success with the aircraft doesn’t reanimate it, the order alone is life saving. Deliveries are scheduled to begin in 2020, meaning production could stretch to 2030. The 20 plane deal (could be 16 more soon), worth $16 billion, will save thousands of jobs at Airbus.
And the more generous argument for A380 growth
This might be the best thing that can happen for A380 production and perhaps air travel too. With passenger traffic numbers doubling every 15 years, and airports sizes and landing spots not, the A380 could be the best solution for sustainable growth. So will they cancel the superjumbo? We certainly hope not. Do we really want to give up on a plane that might be the only thing saving us from travel chaos?