LONDON: It is the end for the superjumbo, the aircraft hailed as the future of air travel that would challenge America’s dominance of the skies.
Just 12 years after the A380 jet first entered service, Airbus has pulled the plug on an aircraft considered the embodiment of European industrial co-operation.
The European aerospace group confirmed on Thursday that it would stop production of its 550-seat double-decker aircraft in 2021 after Emirates, the jet’s main customer, drastically cut its order as it struggled to fill the aircraft on some routes.
Only another 17 jets will roll off the production line — 14 for Emirates and three for Japan’s ANA — before it is closed.
Tom Enders, chief executive of Airbus, conceded that it was a “painful” decision “after all the effort, all the money, all the sweat” that had been poured into the programme. The company, he added, had to base its decisions on facts and “we simply don’t have enough backlog [of orders] to carry on”.
The Emirates’ decision may have proved the death knell for the A380 but the programme’s future has been in the balance for years. Launched in 2000 by Airbus to take on Boeing’s original jumbo jet — the 747 that brought long-haul air travel to the masses and first flew 50 years ago — the A380 was billed as a plane of the future.
Increased international air travel, coupled with airport congestion, would lead to demand for bigger planes that would fly passengers from hub to hub where they would disembark to connect with planes bound for smaller airports.
The commercial market reality, however, has proved to be rather different.
Although the A380 was originally built to replace the 747, the market for the jet was arguably already turning when it arrived. Passengers loved the extra space and comfort offered by the larger plane but airlines proved reluctant to commit to a four-engine aircraft that carried more than 500 passengers and needed to fly at full capacity to be efficient. Richard Aboulafia, an analyst at the Teal Group, who has been critical of the A380 over the years, said: “Airlines, like passengers, want to fly point-to-point, and as the system got bigger, more routes were enabled.
“The A380 was designed for a time long ago, when flying through Frankfurt, Narita, Heathrow, and other mega-hubs was seen as the future.”
Sales momentum for the plane never really took off. US airlines never bought the aircraft and carriers such as Air France-KLM and Qantas have reduced their orders.
Virgin Atlantic, an early buyer, cancelled before taking delivery of its first A380. Emirates became its staunchest defender.
At the same time as Airbus was pushing the A380, its rival Boeing was pursuing a different path with the 787 Dreamliner, a plane that could fly a similar range on only two engines and offered airlines greater flexibility in terms of routes.
Today, Boeing’s bet has paid off as the industry has shifted to using smaller, more fuel-efficient aircraft.
Edmund Greenslet of Airline Monitor said: “There is a definite trend towards smaller, more efficient aircraft. The world has moved beyond the four-engine aircraft. Technology today allows you to do the same in terms of range with two engines.”
Tellingly, while reducing its order for A380s, Emirates has opted for a mixture of Airbus’ smaller A350s and A330s models instead.
Analysts said there was no exact historical precedent for the demise of the A380.
The fate of Concorde, perhaps, comes the closest although the supersonic jets had their own very specific story to tell. They only ever found two customers, British Airways and Air France, and just 14 became production aircraft. But the A380 has also not been without cost. When Airbus first launched the programme, it said it would spend €10.5bn but development delays and cost overruns quickly mounted. In 2006, the estimate was about €18bn.
“With only 250 aircraft delivered, Airbus will have recovered only a very small proportion of that sum [of about €18bn],” said Sash Tusa of Agency Partners.
Europe’s governments also stepped in at launch. The UK government committed about £530m in so-called “repayable launch investment”. Airbus on Thursday said it would take an additional charge of €463m related to the A380 programme. It is also taking a charge of €436m on the troubled A400m transport programme.
Mr Enders said the company had now concluded contract amendments with the partner nations and hoped to secure final agreements later this year.
The company reported strong earnings for the full year, with revenues to the end of December 2018 up 8 per cent to €64bn, driven by strong commercial aircraft deliveries. Airbus said reported earnings before interest and tax rose to €5.04bn in 2018, up from €2.66bn in 2017. In the immediate future, profit growth is expected to be driven by sales of its A350 programme, which Airbus said it expected to break even this year.
Airbus may have stopped the clock on the A380 but 2019 will not just be remembered for this.
The company celebrates its 50th birthday this year and is in the middle of a top-level management and generational overhaul that will see Mr Enders and Harald Wilhelm, Airbus’ chief financial officer, depart in April. It also still faces investigations into alleged bribery and corruption. The controls to the flight deck will pass to Guillaume Faury, currently the head of Airbus commercial. Asked about the impact of the loss of Airbus’ flagship plane, Mr Faury insisted its legacy would live on.
“Without the A380 we would never have been able to develop the A350. I am convinced the A350 has the DNA of the A380 in a very modern, efficient engine. The A350 will lead the pack for Airbus.”
Emirates has become synonymous with Airbus’ superjumbo A380, fuelling the airline’s massive expansion over the past decade. With the A380s high fuel costs, Emirates was forced to operate some underperforming routes at a loss, unlike other competitors that could utilise more efficient aircraft such as the A350. Emirates last year had to ground some aircraft owing to weak demand last summer.
“Many routes are still doing fine,” said one insider. “But others were flying half empty — we needed more flexibility.”
Emirates’ A380 fleet will comprise 123 units, which it will continue to operate “well into the 2030s”.
But a more nimble fleet will also see A350s on long-haul routes and A330neos servicing regional destinations. Efficiencies have already been gained from Emirates’ expanding code-share tie-up with low-cost sister airline, flydubai, which focuses on the Middle East, central Asia and south Asia.