BA will begin to move 380s to proper long term storage
Airline is considering scrapping some
This does not look to me like a reliable source for BA's fleet plans.
Reporting its Second Quarter results on 31st July, IAG said that it expected it to take until at least 2023 for passenger demand to recover to 2019 levels. IAG said that it was planning for capacity to “…increase through quarter 3 and quarter 4, to -74 per cent and -46 per cent versus 2019 respectively, but plans are highly uncertain and subject to easing lockdowns and travel restrictions”.
Under "right sizing the business for the future" IAG stated that for BA:
• 4 A380s to be temporarily grounded
• 6 B777s to be temporarily grounded
• 18 narrow body aircraft to be temporarily grounded
• 13 Airbus narrow bodies to be retired early
• 747 fleet exited through early retirements
• A318 fleet exited
IAG did not say when the temporary groundings will come to an end. Given the uncertainty, this is not surprising. However, I’m pretty sure I’ve seen an IAG statement saying that aircraft may be temporarily grounded for “up to two years” (I’ve searched, but can’t find that statement now).
Recovery for the industry has been slow, and perhaps slower than hoped for. The BA winter schedule may be smaller than planned, and this may mean that grounded aircraft will return to service at a slower rate than anticipated.
IAG shares are traded on the London Stock Exchange and the ‘Spanish Stock Exchanges’ (the stock exchanges of Madrid, Barcelona, Bilbao and Valencia). IAG is obliged to follow strict protocols around what it says about financial performance.
Reporting its results, IAG highlighted an exceptional impairment expense of €731 related to fleet assets (€729 million) and other assets (€2 million) together with an associated inventory impairment expense of €71 million. It also reported expenses relating to contractual end of lease payments in respect of surplus aircraft of €6 million.
IAG said the fleet impairment relates to 55 aircraft, their associated engines and rotable inventories that have been stood down permanently and 6 further aircraft which have been impaired down to their recoverable value at June 30, 2020, which includes:
32 Boeing 747
15 Airbus A340
4 Airbus A330-200
2 Boeing 777-200
4 Airbus A320
4 Embraer E170
So, at the end of July BA had clearly not taken the decision to retire the A380s. If at some time BA does decide to retire A380s, I would expect there to be significant further exceptional costs, and therefore a formal public announcement will be required. The IAG third quarter results are due soon and there may be an update.
I’d be surprised if since the end of July BA has decided to retire A380s. There is no rush to make that decision.
BA may now be planning to return the A380s to service at a slower rate than first anticipated. This is not the same as deciding to retire them.
For what it is worth, I think that the A380s will return to service, but at a slow rate.