I've just read an article that says for the A380 to be profitable and for Airbus to just break even, they need to sell at least 420 aircraft !

So my question is, will the A380 ever be as profitable as much as, for instance the 747 ??



[Edited 2012-08-09 14:17:38 by srbmod]

You're asking if anybody has a crystal ball that'll see 20+ years into the future? Going to be pretty difficult, at a guess. Another guess, and it can't be anymore than what in engineering terms is called a WAG*, is that the A380 will land more than those 420 orders, and thus become profitable.

Whether or not it'll be more profitable than the 747 is impossible to answer. First of all you'll have to tell us just how profitable the 747 programme has been, and that in itself is going to be a challenge. Unless you're the CFO of Boeing Commercial Aircraft, of course, but if you are that you'd be unlikely to divulge such information on a public forum.





*Wild Arsed Guess

"The whole A380 issues brings back a flight crew phrase "I ain't going if it ain't Boeing & I hate flying on the ScareBus"

I must admitt I don't think I will ever want to fly on the A380..."

Just thought I would remind you of your previous statements. So I guess this topic is just another round of 380 bashing which appears every week.

Anyway I will answer as a pax who has flown on the 380 (SQ/EK0 and also nearly 300 747's:

Yes the 380 will make money, the number of units to be sold to break even must be above 420 by now, but I am sure she will get there, it is just a superb aeroplane from a PAX point of view.

The 747 came from a different era, if you compare the 747-8i and 380, that should give you an idea. But hey, you probably don't want to hear this.

In a vaccum, no.

But if you look at technological advances, process improvements, capital expenditures, etc. that eventually benefit other new aircraft such as the A350 and beyond, there is a definite possibility that the A380 can be considered a profitable investment. The original 747 was considered an enormous investment that never seemed like it would make money. 40+ years after it was introduced, there are still new 747s being manufactured and delivered. Sure there were other improvments and expenses along the way, but the same basic design and structure continues to be used which is a huge cost savings for the future variants.

Quoting virgincrew (Thread starter): So my question is, will the A380 ever be as profitable as much as, for instance the 747?

I don't see the total market for the A380 to be as large as the 747, but then I don't know how much money Boeing has made from the 747 program and probably won't know how much money Airbus will make from the A380 program, so I can't make any declarative statement as to whether or not it will be as profitable. The A380 may deliver less planes, but if it makes significantly more profit per delivery, it may very well match or exceed Boeing's profits on the 747 program.

Quoting virgincrew (Thread starter): I've just read an article that says for the A380 to be profitable and for Airbus to just break even, they need to sell at least 420 aircraft !

As mentioned by Col above, this seems to be an old number. Airbus stated they will no longer officially discuss the break-even-point.

But let's say the current number is 700 airframes (just to mention a number). The total number of orders is 257 (80 airframes "already" delivered). So less than five years after EIS they already sold more than 30% of the number of airframes required to break even. Unfortunately, I don't have the crystal ball mentioned above by B777LRF but I could imagine there is a fair chance that they will achieve break even.

P.S.: with all due respect but didn't we have a very very similiar if not identical thread just some weeks ago?

The A380 was never ment to sell as many frames as the B747 has. The A380 was made for a different market.

Quoting N14AZ (Reply 5): P.S.: with all due respect but didn't we have a very very similar if not identical thread just some weeks ago?

I guess we have seen at least 35 of these threads over the years.  

Nobody knows the break-even number. And it is not important anyway since Airbus already took all the losses up-front. So every delivery now is good for Airbus and making money.  .

Quoting col (Reply 2): Just thought I would remind you of your previous statements. So I guess this topic is just another round of 380 bashing which appears every week.

I guess it is.

[Edited 2012-08-09 08:27:47]

This topic seems to come up every once and awhile. My standard answer is that it depends on the price that airlines pay for the aircraft obviously. There is probably a figure out there for their break even but it is a moving target. If they need to sell x number of aircraft to break even there must be time frame for the number of aircraft to be sold by. The number may be 420 but if they sell only 420 over say 30 years than is that going to break even for them? I don't know the answer to that as I don't have information regarding their financials and don't know how their back accounts are looking to bankroll this aircraft. The 747 on the other hand has obviously had a successful run and makes Boeing money so I don't see why the A380 won't make Airbus money.

Quoting virgincrew (Thread starter): So my question is, will the A380 ever be as profitable as much as, for instance the 747 ??

I think more than anything it will come down to production rate. At their current production rate, it will take 13 more years until they hit 420 frames. With current production rate, it will take them ~7 years just to clear out the backlog. Also the 420 number may be low because AFAIK that number is from Airbus in 2006 and I believe that they expected to make significantly more deliveries by now than they actually have. Depending on what their actual interest rates are/were, the break even number could now be significantly higher.

The A380 is a good plane but it is unlikely that they'll hit break even on it, if ever, at the current production rates. Now, discounting sunk costs, they are obviously making a profit on the planes they deliver (or they would simply not make them), but it will take a long time to make up the R&D costs, if ever.

[Edited 2012-08-09 08:37:48]

These threads come up every so often and I can't help but wonder why it matters to anyone at this point. Airbus decided to build a VLA that would be the largest pax aircraft available, they followed through with it, and it will be available to airlines for a long time to come.
The only concern for Airbus at this point is whether or not they continue receiving enough orders to keep the line open beyond the next 7 or 8 years. As long as they can keep the line running it no longer matters whether they break even on the project as a whole.

I'd also suggest you look into the company history at Airbus. In the mid-nineties when they started working on the A3XX they had never delivered more than 160 or so aircraft per year. They're now up to 500+ deliveries per year and have become a global giant on the level that Boeing and McDonnell Douglas were in the 90's. While there are plenty of other factors it's impossible to discount the A380's role in that success. They never would have reached that level of success by conceding the VLA market to Boeing.

Bottom line is that Airbus is a larger and better company than they were before they created the A380, regardless of whether the A380 project as a whole breaks even or not.

Quoting max550 (Reply 10): Bottom line is that Airbus is a larger and better company than they were before they created the A380, regardless of whether the A380 project as a whole breaks even or not.

While true, that doesn't mean they wouldn't of been an even larger and better company if they had instead invested in other planes instead.

That old chestnut again: "If it aint Boeing I aint going" . When I was 7 years old I used to think that anything that rhymes is obviously full of wisdom, but then I grew up. Maybe some of you should also consider doing that. I find it strange that so many armchair experts that are supposedly interested in aviation would choose only to fly on one type of plane and not want to experience all the interesting varieties of aircraft that are out there. Come on, live a little, don't turn into a grumpy old man already that doesn't want to experience anything new. If they were that dangerous I don't think that have the airlines in the world would be flying them. Yeah - maybe the A380 will be profitible one day, that depends on how many they sell and if any more expensive problems come up, the world economy, the price of fuel, airport expansion.... a lot of factors.

Quoting spink (Reply 11): While true, that doesn't mean they wouldn't of been an even larger and better company if they had instead invested in other planes instead.

No doubt, they still could have been larger and better through other investments, but I truly believe the A380 was their best bet at the time. I don't think any other (realistic) project would have garnered the same kind of publicity the A380 got over its 15-20 years of development.

Quoting spink (Reply 11): While true, that doesn't mean they wouldn't of been an even larger and better company if they had instead invested in other planes instead.

At the time they started serious work on the A3XX program, there was nothing else for them to invest in. The A320 program handled the sub-200 seat market and the A330 and A340 programs covered the 200-300 seat market. The only area they didn't have a plane was the 300+ seat market, which was owned exclusively by the 747-400.

To those that say Airbus should have developed a large twin to compete with the 777, the A3XX and 777 programs were both designed around the same time. And Boeing developing the 777 was in no small part due to the threat of the A330-300, A340-300 and MD-11 programs to the 747-400 on shorter-range missions.

Quoting Mortyman (Reply 6): The A380 was never ment to sell as many frames as the B747 has. The A380 was made for a different market.

Untrue. The original production plans for the A380 envisioned a rate of 48 aircraft/year. Assuming a production lifetime of 30 years for the A380, this would work out to 1440 aircraft -- nearly as many as the 747 has sold over its 40+ years of service. In 2001, Airbus predicted a VLA market of 1138 frames (this does include the 747) from 2001 to 2020 -- and it's reasonable to assume they expected the lion's share of that market by offering the newer product in the market segment. And it is virtually certain that Airbus expected to pick up many orders from airlines retiring 747's -- we're not talking about "a different market."

Quoting col (Reply 2): Yes the 380 will make money, the number of units to be sold to break even must be above 420 by now, but I am sure she will get there, it is just a superb aeroplane from a PAX point of view.

Extrapolating future profitability based on the quality of the on-board experience is a non sequitur. I find the 717 to offer a very pleasant customer experience, and yet Boeing likely lost a large sum on the program. The A380 will make money if enough airlines come to the conclusion that the A380 will be a profitable proposition for their fleets and place orders.

Quoting N14AZ (Reply 5): As mentioned by Col above, this seems to be an old number. Airbus stated they will no longer officially discuss the break-even-point.

Whether or not the A380 makes it to break-even, it is unlikely to ever achieve a commercially acceptable return on invested capital.

I've mentioned this before and it bears repeating. Boeing initially thought the total production of 747s would be something on the order of 500 to 600 airplanes. They didn't expect the airplane to do as well as it has done. Could the A380 suprise its developers as well. Time will tell. The airplane appears to have great passenger appeal and that's a huge plus for an airline that's considering buying the plane. There's no doubt in my mind that Airbus will work to improve the airplane and it wouldn't come as a surprise that newer versions, perhaps beyond the anticipated A380-900, will be created and offered to airlines. At this point it's fair to say it's just too soon to try to determine whether the airplane will be profitable.

I think it will, and I think it will sell 500+ frames or more in time.

Similar questions were probably asked in the early 70s about the 747, at the time there were a number of US carriers who had bought it and were probably thinking we made a mistake,and with the fuel crisis and economic gloom then, who would have thought come the late 70s orders would be back to what they were on launch. It's worth remembering that the 747 gained a lot of new customers from 1975 onwards....ME, RJ, IR, IA, KU, SV, CX, NZ, NH, TG, MS, CV, PK, PR, GA, CI, CA, UT of the top of my head and that's before we mention the 2nd or 3rd wave of orders from some of the launch customers.

I think as airports get more congested, more green taxes applied and stuff, the A380 will represent the most cost effective way of moving people about. As the world population grows, the demand will continue to grow in time, and places like LHR, LAX, JFK or AMS etc get more congested what is the answer? Most Western populations will not put up with a large airport becoming even larger on their doorstep, less of a problem in the Far East, they tend to just do regardless, so if you can't make the airports bigger or increase the number of flights, what else can you do......make the planes bigger. That's a slightly simplistic way of putting it I know, but you will hopefully see the point I'm making IMO.

I can seriously still see people like CX taking it on, either NH or JL, TK, 9W, maybe Asiana, maybe even KLM who knows. I'm sure there are several carriers out there who will in the next decade take on the A380, that today we wouldn't even conceive them doing it, in the same way that in 1972 say, we wouldn't have associated Thai or Cathay or ANA with the 747 another 10 years further on. Who knows if Iran for example comes in from the Cold, Vietnam becomes the hottest spot to visit in SE Asia or KLM take it on (what are they going to replace their 744s with?)....exciting times I think.

Quoting virgincrew (Thread starter):

Can you provide this link you speak of ??

Quoting n729pa (Reply 17): I think it will, and I think it will sell 500+ frames or more in time.

It's also worth noting that by the time the 747 had been in-service for 5 years (about where the A380 is now) Boeing had 252 orders for it. So to judge the A380 already is a bit premature.

Quoting n729pa (Reply 17): Similar questions were probably asked in the early 70s about the 747, at the time there were a number of US carriers who had bought it and were probably thinking we made a mistake,and with the fuel crisis and economic gloom then, who would have thought come the late 70s orders would be back to what they were on launch. It's worth remembering that the 747 gained a lot of new customers from 1975 onwards....ME, RJ, IR, IA, KU, SV, CX, NZ, NH, TG, MS, CV, PK, PR, GA, CI, CA, UT of the top of my head and that's before we mention the 2nd or 3rd wave of orders from some of the launch customers.

One thing that is important to remember about the 747, when it was released, was that not only was it a significantly larger plane but it also was a significant increase in range which likely contributed to its sales.

Quoting n729pa (Reply 17): hat in 1972 say, we wouldn't have associated Thai or Cathay or ANA with the 747 another 10 years further on

Well spoken. Or that a Russian airline others than SU would order some brand new 747s

Quoting n729pa (Reply 17): ASIANA

Just for the records, they already placed a firm order for 6 aiframes.

Back in the '70's Boeing had a break even of 400 for the 747. Seems pretty similar to the 380? Boeing looked to be falling short when the fuel crisis hit. 40 years later its a great success and I see no reason for the 380 to do the same. China will probably take some high density internal routes and use the 380. Emirates have been the first airline to see the potential and I think we will see many others following their lead. British airways could use 50 easily in the next decade.

Quoting max550 (Reply 19): It's also worth noting that by the time the 747 had been in-service for 5 years (about where the A380 is now) Boeing had 252 orders for it. So to judge the A380 already is a bit premature.

Well said!   

Quoting max550 (Reply 19): It's also worth noting that by the time the 747 had been in-service for 5 years (about where the A380 is now) Boeing had 252 orders for it. So to judge the A380 already is a bit premature.

But as a percentage of the total airliner market that was a lot more, and a much greater proportion of those ordered had been delivered. In any case, I'm quite sure that not only is Airbus way behind where they expected to be in terms of production, they are way behind where they expected to be in terms of orders. The projections Airbus released when they launched the A380 would have them making at least 50 per year by now; they are not close to that (and production rate has a very big effect on cost per unit, and . And quality has nothing to do with profitability; look how many quality car companies have gone out of business (Packard, for example.) I cannot see how with present rates of orders and deliveries that the A380 can ever be profitable. It is being carried by the success of the A320 and A330; and as long as Airbus does have successful lines and makes an overall profit there is no real problem with that. The question will be how long they can keep the line open and how many improvements they can afford to make on it. I do think the A380 will get the lion's share of VLA pax orders for the foreseeable future, but the question is how big that market will be. So far it has been very disappointing, and if the economics of the 787, 777, and A350 continue to be improved it is unlikely that Airbus will be able to afford to keep the A380 apace with them. It HAS to offer significantly better CASM than anything else or there is no business case for an airline to buy it. And if it cannot sell enough to be profitable Airbus will have a very hard time justifying putting more money into it. It doesn't matter how much passengers may love it; they loved the Concorde as well, but that did not save it.

Airbus's only goal at this point is to make the A380 cash-flow positive as each aircraft is delivered. Whether it will ever return it's investment money, let alone pay a reasonable rate of return to investors is a different story, but if they can get it cash-flow positive, they can just keep making them and making customers happy.

With the A380, Airbus killed the monopoly Boeing hat in the VLA area. It was at this point Airbus finally became a full-scale manufacturer.

So while the sheer numbers are probably a bit smaller, the airplane itself is a success.

There are many ways of defining successful.

Quoting SEPilot (Reply 24): In any case, I'm quite sure that not only is Airbus way behind where they expected to be in terms of production, they are way behind where they expected to be in terms of orders

One inevitably goes with the other of course.

Quoting SEPilot (Reply 24): The projections Airbus released when they launched the A380 would have them making at least 50 per year by now

They predicted they would sell 750 in 20 years which is c. 38 per year (that is what the business case was based on). The line is maxed at about 45 per year.
They have never mentioned "at least 50 per year". Ever.

Quoting SEPilot (Reply 24): It is being carried by the success of the A320 and A330

It certainly has been up to now.
But that is surely no different to any other airliner programme at this early stage.
Where do you think the money to develop the 787 has come from, if it hasn't come from the 777 and 737?   

Quoting SEPilot (Reply 24): and if the economics of the 787, 777, and A350 continue to be improved it is unlikely that Airbus will be able to afford to keep the A380 apace with them

Not sure about that. A re-engine (even only to A350 standard),a simple stretch, and MTOW hikes will all be very straightforward on the A380 compared to most other programmes. The latter 2 for certain have been built in to the airframe from the outset. The XWB's look like they were designed to be fitted to the A380, so similar are they..

Rgds

Quoting SEPilot (Reply 24): It is being carried by the success of the A320 and A330

That's precisely it, you see? The A320 and A330 are carrying Airbus 15 to 20 years after EIS. Ten or 15 years from now it will be the A380's turn to shine in the books while we're busy discussing whether or not the A370 and A390 are financial turkeys as claimed by the latest pot-stirrer.

There was a post earlier called, Future of The A380? that should help! You might have to search for it.

Quoting TheSonntag (Reply 26): With the A380, Airbus killed the monopoly Boeing hat in the VLA area. It was at this point Airbus finally became a full-scale manufacturer.

Airbus became a full-scale manufacturer with the A330/A340. By the time they launched the A380 sales of the 747 had slowed to a trickle; the A340 and 777 were taking the bulk of long haul orders. Boeing's arrogance in the 90's had much more to do with Airbus emerging as the #1 manufacturer than the A380 did.

Quoting astuteman (Reply 27): They predicted they would sell 750 in 20 years which is c. 38 per year (that is what the business case was based on). The line is maxed at about 45 per year. They have never mentioned "at least 50 per year". Ever.

My recollection is that they predicted more than that, and I do recall the figure of 50 per year. I could be mistaken, however; I do not have any sources handy.

Quoting astuteman (Reply 27): Not sure about that. A re-engine (even only to A350 standard),a simple stretch, and MTOW hikes will all be very straightforward on the A380 compared to most other programmes. The latter 2 for certain have been built in to the airframe from the outset. The XWB's look like they were designed to be fitted to the A380, so similar are they..

These improvements can only be justified if they result in more sales, and if they can be sold at a price that will bring at least an operating profit (which will have to include the costs to do them.) The money spent so far on the A380 is long gone, and I agree that it is relatively irrelevant whether or not they achieve a decent ROI; that ship has sailed. But going forward they really need to have a sound business case in order to pour more development money into it.

Quoting WingedMigrator (Reply 28): That's precisely it, you see? The A320 and A330 are carrying Airbus 15 to 20 years after EIS. Ten or 15 years from now it will be the A380's turn to shine in the books while we're busy discussing whether or not the A370 and A390 are financial turkeys as claimed by the latest pot-stirrer.

The A320 and A330 became runaway sales successes fairly quickly, because they were excellent planes and better than anything else available, and they were the planes that the airlines wanted. The A380 is by all accounts an excellent plane, better than anything else available that is selling very slowly because it is too much airplane for most carriers, and unless this changes I cannot see how it is going to be carrying Airbus 5 to 10 years from now. The A320NEO and the A350 are going to be the ones doing that.

Quoting SEPilot (Reply 30): But going forward they really need to have a sound business case in order to pour more development money into it.

They had a sound business case when they launched the A380 with a break-even on 250 copies. That the production had some very major setbacks was of course not foreseen. Especially the CATIA-software mismatch between the several Airbus sites has cost them dearly.

Quoting SEPilot (Reply 30): The A380 is by all accounts an excellent plane, better than anything else available that is selling very slowly because it is too much airplane for most carriers, and unless this changes I cannot see how it is going to be carrying Airbus 5 to 10 years from now.

It is mostly selling slow because the production rate is too low. At current production rates the delivery time now stands at 7 years. Remember when the B787 sales dried up or the slow start for the A350-1000? Right, when the delivery times were at 6 years or more.

That not all airlines will be ordering A380 because of the size of the airplane is clear. But if the production had gone smoothly and without major delays, I am sure she would already have sold quite a few more copies then today. And today, only 5 years after EIS, they have reached the original break-even point of the original business case.  .

[Edited 2012-08-09 14:23:59]

I think a lot of the A380's future is dependent of what the market wants. Right now the market calls for the A380 but if the "trend" of smaller twin jets continues then it's anybody's guess. Consider both the A380 and the 748i are selling like pulling teeth so maybe the VLA pipeline is growing shorter on the passenger end and staying stagnant on the freighter end.

Another factor to consider is the resale value. Since all 380's are still flying for their first owners the resale value will be interesting. I think it would be hard to re sell the A380 since you can get a 747 for much cheaper, with the sacrifice of capacity and lower efficiency. So it depends on what more important to the buyer

Quoting rotating14 (Reply 32): I think a lot of the A380's future is dependent of what the market wants. Right now the market calls for the A380 but if the "trend" of smaller twin jets continues then it's anybody's guess. Consider both the A380 and the 748i are selling like pulling teeth so maybe the VLA pipeline is growing shorter on the passenger end and staying stagnant on the freighter end.

This is exactly my point, and you have made it better than I did. When the A380 was launched Airbus was predicting a rosy future for it, but Boeing (who talked to the same customers) said that there was no business case for a new VLA (which could have been self-serving as they had the only VLA at the time, but it could also have been the truth), and certainly no case for two new ones. It is certainly true, as EPA001 says, that had the A380 development and production gone according to schedule that it is likely that a lot more would have been sold, and perhaps break even already achieved. But the longer it takes to work out the production snafus the more it is going to cost to build each one, and the poorer the case will be for putting more money into it.

Quoting virgincrew (Thread starter): So my question is, will the A380 ever be as profitable as much as, for instance the 747 ??

Let's not forget that the 747 was, for the longest time of its history, an aircraft without a competitor. Any manufacturer that's worth its money will turn that into a larger profit. An often-overlooked benefit of the A380, from Airbus's point of view, is that it robs Boeing of its former VLA monopoly. Before the A380, Boeing could price its narrow-bodies more aggressively by cross-financing them with the large profits from the VLA segment. I do believe that Airbus overestimated this benefit, but it's still there.

Quoting rotating14 (Reply 32): I think it would be hard to re sell the A380 since you can get a 747 for much cheaper, with the sacrifice of capacity and lower efficiency.

A 2011 delivery A380-800 is worth around $200 million and SQ's first A380-800 is worth about $170 million. If LH wanted to flip their two 747-8s right now, they could reasonably expect to get about $163 million.

Long term, neither VLA's values are expected to shine, but the A380-800 should consistently have more value than a 747-8 of the same era.

As for the 747-400, it's long-term prospects are a bit worse than the 747-8. A 2002 delivery is worth a bit more than $40 million and early frames can be had for a bit more than $10 million.

Quoting SEPilot (Reply 30): The A320 and A330 became runaway sales successes fairly quickly

That is not only a vague statement, but it is flat out wrong. Today the A320 delivers at a rate of ~400 frames a year, but the first 400 took SIX YEARS to deliver. The A330 delivers at ~85 frames a year, but the first 85 took SIX YEARS to deliver.

If I understand correclty, your argument is that the A380 is not a runaway sales success five years after EIS and therefore it will never be a cash cow like the A320 or A330. The flaw in that argument is that five years after EIS, neither the A320 nor the A330 were anywhere close to the success they enjoy today, 10 to 15 years later.

Wait 10 to 15 years, and the A380 will surprise you.

The A380 is a fine plane and will still be in production beyond 2020. However, the business case for the 748 is weak and getting weaker. I see the 748 going out of production before the end of this decade - sort of like the MD-90, which did not make it out of the 1990s.

The diffused international hubs and alliances will probably nix any VLA sales to North American-based airlines. Therefore, I see the A380 sales coming short of the 1,000 mark.

Mathematically impossible. Even after they redesign the wing spars.

Quoting SEPilot (Reply 30): My recollection is that they predicted more than that, and I do recall the figure of 50 per year. I could be mistaken, however; I do not have any sources handy.

The predicted the VLA market to be bigger. They did not predict to have 100% of it.

Quoting SEPilot (Reply 30): But going forward they really need to have a sound business case in order to pour more development money into it.

Of course, but how many sales do you think are needed to justify a re-engine program? Even the -900 model is unlikely to require many units.

Quoting SEPilot (Reply 30): I cannot see how it is going to be carrying Airbus 5 to 10 years from now. The A320NEO and the A350 are going to be the ones doing that.

It is not required to carry them.

Quoting EPA001 (Reply 31): They had a sound business case when they launched the A380 with a break-even on 250 copies. That the production had some very major setbacks was of course not foreseen.

  

Quoting rotating14 (Reply 32): I think a lot of the A380's future is dependent of what the market wants. Right now the market calls for the A380 but if the "trend" of smaller twin jets continues then it's anybody's guess.

The market is calling for both. It will continue calling for both. The number of planes are not equal but it isn't important. Only if the demand is enough to justify production matters. I expect demand for VLA to increase is actual units even if market share expressed as percentage of long haul planes decrease.

Quoting SEPilot (Reply 33): When the A380 was launched Airbus was predicting a rosy future for it, but Boeing (who talked to the same customers) said that there was no business case for a new VLA

It is interesting how Boeing's market forecast for VLA decreased until they decided to do the 747-8.

Quoting rara (Reply 34): Let's not forget that the 747 was, for the longest time of its history, an aircraft without a competitor.

DC-10 and L-1011 and even 707 provided competition in the beginning. Then 767, A340 an A330 took over. They did not provide competition in every situation but they covered a high percentage of routes flown by 747.

Quoting WingedMigrator (Reply 36): The flaw in that argument is that five years after EIS, neither the A320 nor the A330 were anywhere close to the success they enjoy today, 10 to 15 years later.

  

The idea behind the A380 was pretty basic; build a state of the art airplane that can carry loads of people, more economical and comfortable than anything out there. Any carrier worth its salt, would buy a bunch and everything is going to be just peachy.....
No one anticipated the costly delays this project would incur. Nor did most of people anticipated the 2008 financial meltdown. Just when the US started to see a glimmer of light at their end of the tunnel, Europe - not to be outdone, thought it should have its own crisis.
Not exactly the ideal business climate to sell 400 mil. planes.
The way I look at this business ....
If the people flying it are making money, they will buy more, if they don't, they wont. Their competitors are watching keenly this development and will make their decisions.
I imagine the A380 to be a remarkable flying machine and I wish it well but the world economical climate must be substantially healthier and optimistic before we will see buyers entering the market....

The repairs and rework of the main wings on the A380 is going to add a few more aircraft to the break even point. It also may scare away a few more sales to new operators.
I personally fell the A380 will not have the market appeal of the 747 as it is designed for mainly long haul routes and it has competition that the 747 did not, even though the 747 fell on lean times in the 1970s.   

Quoting Stitch (Reply 14): At the time they started serious work on the A3XX program, there was nothing else for them to invest in. The A320 program handled the sub-200 seat market and the A330 and A340 programs covered the 200-300 seat market. The only area they didn't have a plane was the 300+ seat market, which was owned exclusively by the 747-400. To those that say Airbus should have developed a large twin to compete with the 777, the A3XX and 777 programs were both designed around the same time. And Boeing developing the 777 was in no small part due to the threat of the A330-300, A340-300 and MD-11 programs to the 747-400 on shorter-range missions.

I would say that the A330NG was CLEARLY, with the benefit of hindsight, something they should have invested in. They just misread the market. They didn't foresee the 747-400 sales ending before their EIS and the 748i not making much headway.

They ceded the long range twin market to the 777. Bummer.

Boeing's analysis of not investing in the 747 enhancements has shown to be pretty much on the money, but they flinched and built the 747-8.

Quoting thegeek (Reply 42): They didn't foresee the 747-400 sales ending before their EIS and the 748i not making much headway.

I think the A380-800 was one of the reasons why the 747-400 sales ended and the 747-8 not making much headway.

I think the 777-300ER had a lot to do with it too. If there was no A380-800, the former plane would still have ended the 747-400 in the pax market IMO.

Quoting thegeek (Reply 44): I think the 777-300ER had a lot to do with it too. If there was no A380-800, the former plane would still have ended the 747-400 in the pax market IMO.

Between the 777-300ER and A340-600, I do agree the 747-400 was only going to sell on capacity if there was no A380-800.

Quoting Tdan (Reply 3): But if you look at technological advances, process improvements, capital expenditures, etc. that eventually benefit other new aircraft such as the A350 and beyond, there is a definite possibility that the A380 can be considered a profitable investment.

"Profitable investment" in your example is in hindsight only. That is not what the underlying investment benefit was when the project was originally sold. And in that regard, every program benefits future ones. Just look up the best example of a total failure for a large airplane program, the Bristol Brabazon. Only two were built in an ambitious program that was sold as the future of air travel before the program was shut down. Yet its legacy can be seen in even modern jet aircraft. But I'm sure the Brits weren't sold on it because of its eventual benefit to other new aircraft.

Quoting Tdan (Reply 3): The original 747 was considered an enormous investment that never seemed like it would make money. 40+ years after it was introduced, there are still new 747s being manufactured and delivered. Sure there were other improvments and expenses along the way, but the same basic design and structure continues to be used which is a huge cost savings for the future variants.

The only difference is, of course, that the 747 was in a class all its own. It had range AND CASM in its favor by a wide margin. The A380, doesn't have monopoly on range, and its CASM is only barely better than the next best thing available, and that advantage is tenuous at best.

Quoting Stitch (Reply 4): The A380 may deliver less planes, but if it makes significantly more profit per delivery, it may very well match or exceed Boeing's profits on the 747 program.

The only way it will do that is if its CASM remains significantly ahead of its nearest competitor (748) or any other model (787/350). Barring those scenarios, it won't stand a chance for recognizing a pricing premium, which means it won't recognize a profit, let alone "more profit per delivery".

Quoting N14AZ (Reply 5): Airbus stated they will no longer officially discuss the break-even-point.

I've found in the business world that the only time something will no longer be officially discussed is when nothing positive can be spun from it.

Quoting max550 (Reply 13): No doubt, they still could have been larger and better through other investments, but I truly believe the A380 was their best bet at the time. I don't think any other (realistic) project would have garnered the same kind of publicity the A380 got over its 15-20 years of development.

To me, that highlights the underlying motivation for the program - to be the biggest at bat. In general, that is not a bad thing to do in business...unless there is no business case for it.

Quoting Stitch (Reply 14): At the time they started serious work on the A3XX program, there was nothing else for them to invest in.

Gee, I don't know...There's a lot of things I could have thought of doing if I had $10 billion of money (the original projected cost of the program) lying around in my corporate coffers or investors' pockets to spend.

Quoting max550 (Reply 19): It's also worth noting that by the time the 747 had been in-service for 5 years (about where the A380 is now) Boeing had 252 orders for it. So to judge the A380 already is a bit premature.

As has been pointed out, the 747 was launched in an era where 252 orders for ANY model was significant. Air traffic was 1/4 the size of what it is today.

Quoting spink (Reply 20): One thing that is important to remember about the 747, when it was released, was that not only was it a significantly larger plane but it also was a significant increase in range which likely contributed to its sales.

And that goes to the issue of what does the A380 offer that is "significantly" more or better? In this age of airline cost containment (range is a moot issue now) it is only marginally better than the next best thing out there, and it won't hold that title much longer.

Quoting SEPilot (Reply 24): I'm quite sure that not only is Airbus way behind where they expected to be in terms of production, they are way behind where they expected to be in terms of orders.

They are. I posted a link a few years ago wherein Airbus expected to recognize 400 orders just in APAC alone within the first 10 years. They have barely achieved half that amount in 12 years globally.

Quoting TheSonntag (Reply 26): With the A380, Airbus killed the monopoly Boeing hat in the VLA area. It was at this point Airbus finally became a full-scale manufacturer. So while the sheer numbers are probably a bit smaller, the airplane itself is a success. There are many ways of defining successful.

Probably the most common-sense and accurate post thus far in all these threads on the A380. They apparently felt they had to address this one segment; otherwise, they wouldn't be a "complete" global competitor without it. Never mind that the segment they were looking at was already withering away because of technological advances and market shifts that were being addressed by smaller planes.

Quoting astuteman (Reply 27): They predicted they would sell 750 in 20 years which is c. 38 per year (that is what the business case was based on).

Interesting comment since you just claimed in another post a few weeks ago that no manufacturer "predicts" a business case in such a short period of time.  

Quoting WingedMigrator (Reply 36): Wait 10 to 15 years, and the A380 will surprise you.

It won't surprise me when Airbus uses the space of the current production line for another model.

Quoting FLALEFTY (Reply 37): I see the 748 going out of production before the end of this decade - sort of like the MD-90, which did not make it out of the 1990s.

Even if it does, it will have been a more successful (read less of a financial drain) model.

Quoting FLALEFTY (Reply 37): The A380 is a fine plane and will still be in production beyond 2020.

and with their manufacturing process, those will be only those a/c already on the books today..

Quoting Stitch (Reply 43): and the 747-8 not making much headway.

The 8F wi needed, the 'I" is just a spoiler.

From a company business perspective, compare the 747-8I fab start to delivery and the A380 fab start (yes before convoy) to delivery... the A380 through put is abysmal... the production plan does not support the rhetoric and barely supports the customer. Anyone looking to buy now will find all the cream routes taken by the time of delivery. this plane may wait decades and never be more than a niche market.

The 747 had very hard times back in the 70's. As we all know it was the military division that kept the civilian side of Boeing going. Airbus are working hard to increase production but have had problems so they've been constrained. I expect to see success here soon and a production increase will lead to an order increase. If a current 380 airline orders then I think you'll see a rush by others not to be left behind.

Quoting SEPilot (Reply 30): I could be mistaken

Indeed

Quoting SEPilot (Reply 30): These improvements can only be justified if they result in more sales

Which is true for any improvement. The A380 has already been improved, and so have its power plants.

Quoting SEPilot (Reply 30): The A320 and A330 became runaway sales successes fairly quickly

They absolutely didn't

Quoting WingedMigrator (Reply 36): The flaw in that argument is that five years after EIS, neither the A320 nor the A330 were anywhere close to the success they enjoy today, 10 to 15 years later.

Correct

Quoting redflyer (Reply 46): Interesting comment since you just claimed in another post a few weeks ago that no manufacturer "predicts" a business case in such a short period of time

I claimed no airliner manufacturer predicts a business case over 20 years? I find that surprising, and don't recall saying it.
Please link and prove me wrong, or retract.
I certainly recall saying that a business case for an airliner wouldn't necessarily require break-even after TEN years.

Rgds