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fcogafa
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A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 3:23 pm

Interesting article outlining UAE's intentions:

http://us7.campaign-archive2.com/?u=...0ab7149&id=8d27ffa1f6&e=4e2d4d1dd4


Clark told us that Emirates will simply park these 12-15 year old A380s in the desert.

“The A380, its future life, its RV is something everybody is challenging us on. When Emirates is done with it in 12-15 years, we’ll put them in the desert. We’ll cut them up,” he told us. “For me, we buy those airplanes for the life that’s prescribed for them in the business model. Once that’s over, it’s over, so we have no worries about getting rid of them. You have to worry about them if you are a lessor, they may have concerns. I think Emirates will run these out in 15 years and then do what they will have to be done.”
 
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GCT64
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 3:32 pm

Not taking any angle here but it wasn't clear to me from reading the whole article if when he says this:

"When Emirates is done with it in 12-15 years, we’ll put them in the desert."

Whether Clark is referring to new A380s (2014 deliveries) or the original 2008 deliveries (which will be 18-23 years old then, and parking them won't be surprising).

[Edited 2014-10-14 08:37:02]
 
fcogafa
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 3:38 pm

I think this line seems to infer the aircraft will be 12-15 years old:

Quoting GCT64 (Reply 1):
Clark told us that Emirates will simply park these 12-15 year old A380s in the desert.


Also this from the article:

Clark is unconcerned. His view, shaped by the Emirates policy of 12-15 year lives for the A380, Boeing 777 and other aircraft in its fleet, is a real eye-opener to an industry where assumed lives are 25-30 years.

[Edited 2014-10-14 08:40:29]
 
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7BOEING7
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 3:44 pm

Well that answers part of the question about when Emirates will retire their A380's (starting in 2020) and what will happen. I wonder which "desert" they will use. I also think we'll see their leased airplanes extend the lease a few years and the lessor will also "park" them.
 
OldAeroGuy
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:01 pm

I wonder how Amedeo feels about Mr. Clark's plan.
 
kl911
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:01 pm

Quoting 7BOEING7 (Reply 3):
I wonder which "desert" they will use

Well, they have plenty of desert around DXB..  
 
ikramerica
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:13 pm

I think it makes sense for the early builds. If EK has fully amortized the frames and can scrap them, why not do so rather than try to find homes for them with secondary carriers that might actually help regional competition undercut them?
 
Q
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:22 pm

How come all Boeing and McDouglas are over 30-40 years of flying? Now, new planes and service limit up to 12 years? What a waste of money! What's wrong with this? It should be ok up to 20-30 years.


Q
 
airbazar
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:22 pm

Quoting fcogafa (Thread starter):
Interesting article outlining UAE's intentions:

And this is news why?
What is the average fleet age for the likes of SQ, CX, etc. Why would EK be any different?

Quoting fcogafa (Reply 2):

Clark is unconcerned. His view, shaped by the Emirates policy of 12-15 year lives for the A380, Boeing 777 and other aircraft in its fleet, is a real eye-opener to an industry where assumed lives are 25-30 years.

Very few airlines have airplanes that are that old. Even 20 years is unusually old for most airlines. LH which is known for getting the most out of its frames only has about 10 widebody frames that are 20 years or older and they are all 744's which will be gone next year, IIRC.
 
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AirlineCritic
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:35 pm

I guess this means both 777s and 380s then.

How usable would the aircraft be after, say 15 years?

They have been used daily... I assume on a fairly tight schedule. (Although there are some destinations, like LHR, where they need to stay on ground for the day for scheduling reasons... is this still happening?)

After 15 years, they have been fully paid but are no longer as fuel efficient as new ones. I can understand how it would make more business sense for EK to use newer aircraft at that point, particularly when the aircraft's costs are so dominated by fuel in their very long-range network.

But would the aircraft really be more valuable as parts to EK than whole for someone else?

Anyway, I think this is a sign of times. When fuel costs go up, eventually there comes a day when a small fuel burn advantage means that it is cost effective to buy a new frame instead. If anyone on this planet, EK will have run their numbers. Will the usable aircraft life perhaps even shorten from 15 years? As an example, if we are talking about 10-20% improvements when going from, say, 330 to 330NEO/350XWB, when does parking a plane become profitable?

I looked at a WSJ article for the cost breakdowns, and it said fuel is 29% and ownership is 16%. Lets assume the ownership costs are on a 15 year schedule, though I have no information on how the WSJ calculations were made. Or whether this was short-range or long-range airline.

Anyway, for any 10% improvement we would expect a 3% drop in overall cost. Shortening aircraft life by a year would increase yearly ownership costs by 1/15, or about 1% on a yearly basis. When does shortening aircraft life by a year make sense?
 
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TheRedBaron
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:36 pm

I think its genius of Mr. Clark, they will use the Aircraft and then scrape it, so only EK and premium carriers will have the BIG plane, basically avoiding watering down the A380 experience.... then again China might build a lot and use them to transport lots a and lots of people.... but I get his point, use them and dispose them so nobody can buy em for cheap....

TRB
 
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7BOEING7
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:37 pm

Quoting airbazar (Reply 8):
Very few airlines have airplanes that are that old.

EK themselves have early 772/773's that average about 16yrs, the youngest 11+ with several that are 18 years old.
 
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sassiciai
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 4:39 pm

Quoting Q (Reply 7):
How come all Boeing and McDouglas are over 30-40 years of flying

Are you sure about that? There are current A-net threads in which there are accounts of 737s and even 777s being reduced to spares suppliers after 8 to 12 years of age! (and if another thread can be believed, Air India is already cannibalising one of its B787s). So your "all" is a wee bit excessive.

Moreover, the "30 -40 years" is a slight exaggeration as well, or else it requires you to substantiate it a bit more, if you will!

Quoting Q (Reply 7):
What a waste of money!

Whose money, actually? Producer made some money, operator made some money, leasing company made some money, airport operators and ATC operators made some money.
(The debate on whether the producer made "enough" is for other threads!)
 
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:01 pm

I think they will change their minds in 15 years. And Clark probably will be long gone by then. 15 years is a long time.
 
kurtverbose
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:07 pm

Quoting sassiciai (Reply 12):
Are you sure about that?

Seems just another Boeing vs Airbus troll. Rediculous when Clark clearly mentions the 777 in the same policy.

Age of scraping is determined mainly by interest rates, technological advances, fuel costs, maintenance costs. Very high fuel costs combined with low interest rates are likely to see the average age of aircraft in service decrease when they can buy a newer more efficient one on quite good finance terms.
 
jonathan-l
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:15 pm

Quoting Q (Reply 7):
How come all Boeing and McDouglas are over 30-40 years of flying? Now, new planes and service limit up to 12 years? What a waste of money! What's wrong with this? It should be ok up to 20-30 years.

Let's not confuse an airline's business model with the actual limit of the airplane. If an airline wants to get rid of an airplane after 12-15 years, that has nothing to do with how long the aircraft is capable of going.
 
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7BOEING7
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:18 pm

Quoting TheRedBaron (Reply 10):
but I get his point, use them and dispose them so nobody can buy em for cheap....

I think it's more like he see's no market for them used related to his "lessor" comment.
 
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7BOEING7
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:21 pm

Quoting TVNWZ (Reply 13):
I think they will change their minds in 15 years.

We're talking a little over 5 years (+3 maybe) before the first ones reach 12-15 -- he might still be around.
 
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:25 pm

It seems Sir Tim put an end to the big discussion about the A380 in the other life. It is so logical, he bought them and made a fortune out of them and then they are out of service, nice one. But the article included a very importnat point, the growth of the populations world wide and the limited slots avilable, this will force some airlines in Asia in paticular to use the A380s, i wonder if this might be applicable to USA where close to 8 million passengers flew between SFO & LAX alone within one state, JFK to MIA is a busy air route. Thos routes will one day require an A380.

Quoting kl911 (Reply 5):
Well, they have plenty of desert around DXB..

There is no desert around DXB , as all the city is reseved for future plans and reservations, maybe they have to look to Russia or USA to park them overthere
 
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:34 pm

Quoting UAEflyer (Reply 18):
i wonder if this might be applicable to USA where close to 8 million passengers flew between SFO & LAX alone within one state, JFK to MIA is a busy air route. Thos routes will one day require an A380.

The A380 was designed as a long haul high pax count a/c, to meet that goal it carries a lot of bulk, if regional traffic ever grows to the extent that it needs an A380 size a/c it will have to be a new frame with much less bulk.
No different than when Boeing made the "special" versions of the 747 for the Japan market.
This may more relate to the son or daughter of the A380 
 
avek00
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:36 pm

Not surprising -- since the dawn of the jet age, airlines typically refreshed their longhaul fleets approximately every 12-15 years, while keeping shorthaul birds around much, much longer.

The economic shocks of 9/11 and the GFC threw off that formula for many airlines, but with fuel now far and away the single biggest cost to commercial aviation, airlines will resume their historical habits.
 
94717
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:40 pm

This desicion is not his to make.

After 12 years the lease companies has paid off the frames and made a calculated profit. with 3 years additional lease the lease companies are happy, or more then happy it seems.

Now the desert or new home for the frames will be desired of the value for parts compared to the profit that can be made by selling or lease the frame.

Quit simple.

But a new variable has been added to the game. High cost of fuel and each new generation of engines (15 years?) ads 15-20% more efficiency.

For long houl this kills of the old generation airplanes faster. There was an discussion why the 744 frames being out of service quit early this should be connected to this fact.
 
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cougar15
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:46 pm

Quoting airbazar (Reply 8):
Even 20 years is unusually old for most airlines. LH which is known for getting the most out of its frames only has about 10 widebody frames that are 20 years or older and they are all 744's which will be gone next year, IIRC.

What? definetly not, they just got refitted and many will certainly soldier on for years to come with LH. Bear in mind, they are fully depreciated & owned , therewith offsetting the fuel dissadvantage. And they are keept to a meticilous Standard by their MX ! By the way, same goes for the BA 744´s, they to are now getting upgraded & will be around for Ages!
And most Frames for both are early ´90s build! EK may park their 388´s in ther Dessert, but rest assured the owners/Leasing Co´s (and I think that is all Sir Clark is saying....) will do their darndest to place them elsewhere!
 
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 5:56 pm

This reiterates the view that A380s will have little use as cargo aircraft, IMO.
 
BiggerJetsPlz
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 6:11 pm

Quoting Q (Reply 7):
How come all Boeing and McDouglas are over 30-40 years of flying? Now, new planes and service limit up to 12 years? What a waste of money! What's wrong with this? It should be ok up to 20-30 years.

If you're the CEO of Airbus/Boeing, and you need to continuously build shareholder wealth (which is all companies care about anymore unfortunately), then what's the first thing you can do to drastically increase cash flow?

1.) Start selling new planes to the carriers who used to buy used, using cheap credit
2.) Get old planes out of the system at 15 years instead of 30

Right there you've doubled the amount of frames you can build, even with no growth accounted for.

Now I wonder, why do they still build these airframes to last 150,000 hours/30 years? You'd think the next cost cutting measure would be to build the frames thinner and cheaper so they only are designed to last 15 years.

But this makes me thing there must be a great opportunity for a new type long haul LCC to move in on scrap value widebodies at 15 years old, get 10 good years out of them, and operate with the advantage of extremely low capital cost for the fleet (especially if oil gets cheaper like it is right now)
 
oosnowrat
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 6:39 pm

Quoting sassiciai (Reply 12):

Delta's DC-9s were 30+ years old when they stopped flying this year. Alaska's 737-200s were pushing 30 years when they were retired. Old passenger planes aren't unheard of.
 
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lightsaber
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 6:49 pm

This is the natural attitude of low interest rates and high oil prices.
Let's see what EK does as when these plans hit 12 years old, I fully expect interest rates to be approaching historical norms.

Quoting airbazar (Reply 8):
What is the average fleet age for the likes of SQ, CX, etc. Why would EK be any different?

Agreed. But even SQ and CX keep certain planes around when economically wise. Not today, but they have extended the lives of planes. Less than 20 years mind you, but more than the original (relatively short) plans.

Quoting airbazar (Reply 8):
LH which is known for getting the most out of its frames only has about 10 widebody frames that are 20 years or older and they are all 744's which will be gone next year, IIRC.

Agreed. Widebodies have improved too much to be kept that long.

Lightsaber
 
redflyer
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 6:50 pm

Quoting TheRedBaron (Reply 10):
I think its genius of Mr. Clark, they will use the Aircraft and then scrape it, so only EK and premium carriers will have the BIG plane, basically avoiding watering down the A380 experience

Why would they scrap a valuable asset? An asset is an asset, especially if it's still serviceable, and it makes more sense to sell it and make more money off of it rather than scrap it. Maybe they'll part them out if they can't sell them, but to imply that they will deliberately scrap them on the assumption it will create more value for existing fleets doesn't make sense. Especially since Airbus will sell the A380 to anyone willing to buy one, including a carrier that will cram 850 passengers into one. And that will definitely "water down the A380 experience".

Quoting 7BOEING7 (Reply 16):
I think it's more like he see's no market for them used related to his "lessor" comment.

  

Quoting UAEflyer (Reply 18):
i wonder if this might be applicable to USA where close to 8 million passengers flew between SFO & LAX alone within one state, JFK to MIA is a busy air route. Thos routes will one day require an A380.

There are multiple airports serving the San Francisco bay area and the Los Angeles metro area. It's not just SFO for San Francisco and LAX for Los Angeles. But if all airports in both markets get to the saturation point then I think the regional jets will be up-gauged to 737/A320's and the single aisles up-gauged to the twin aisle wide bodies long before anyone will think of putting a beast like an A380 on the route.
 
r2rho
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 7:06 pm

Quoting BiggerJetsPlz (Reply 24):

Now I wonder, why do they still build these airframes to last 150,000 hours/30 years? You'd think the next cost cutting measure would be to build the frames thinner and cheaper so they only are designed to last 15 years.

I would not completely rule that out as a possibility for future (all-new) aircraft designs. Cheaper to build, less durable, but renewed on a more frequent basis with the latest technologies. Who knows...
 
JHwk
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 7:08 pm

Well, now that it is out in the open there might be a bit of a challenge getting financing in the future. If residual value is scrap then the Doric loans aren't really any better (risk adjusted) than treasuries.
 
BiggerJetsPlz
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 7:16 pm

Quoting r2rho (Reply 28):
I would not completely rule that out as a possibility for future (all-new) aircraft designs. Cheaper to build, less durable, but renewed on a more frequent basis with the latest technologies. Who knows...

You would think, but if anything the 787 is built to last longer. I think they have a limit of over 200,000 hours, due to the composite material. That would be good for 40 "Lufthansa" or 50 "Delta" years.
 
pliersinsight
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 8:04 pm

Quoting r2rho (Reply 28):
Quoting BiggerJetsPlz (Reply 24):

Now I wonder, why do they still build these airframes to last 150,000 hours/30 years? You'd think the next cost cutting measure would be to build the frames thinner and cheaper so they only are designed to last 15 years.

I would not completely rule that out as a possibility for future (all-new) aircraft designs. Cheaper to build, less durable, but renewed on a more frequent basis with the latest technologies. Who knows...

We also have a long history in place of what happens to metals over long periods of time from what we have learned from events like Aloha 243. The same cannot be said for new materials, with some composite aircraft having a life limit. Seeing for how long and far new materials will go might be a bean counter's wildest fantasy or worst nightmare.
 
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KarelXWB
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 8:09 pm

Quoting fcogafa (Thread starter):
Clark told us that Emirates will simply park these 12-15 year old A380s in the desert.

Same goes for his 777s. So why is this thread focusing on the A380?
 
fcogafa
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 8:21 pm

Probably because Clark was specifically referring to the A380s in the quote in the first post.
 
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7BOEING7
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 8:26 pm

Quoting KarelXWB (Reply 32):
Same goes for his 777s. So why is this thread focusing on the A380?

Because in other threads people were talking about the "after life" of the A380 ( LLC, freighter conversion, Delta Airlines, etc).Now we may have a better idea about what may actually happen. No such discussion has taken place about the 777 because it's just an ordinary airplane that will go to 2nd tier customers, may be converted to freight and will be scrapped. It's not an airplane that creates controversy so to speak. And as pointed out above there are several 18 year old 777's in EK's fleet.
 
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KarelXWB
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 8:39 pm

Quoting 7BOEING7 (Reply 34):
Because in other threads people were talking about the "after life" of the A380 ( LLC, freighter conversion, Delta Airlines, etc).Now we may have a better idea about what may actually happen.

In those threads I have always stated that EK A380s will be scraped after retirement. Therefore the words of Mr. Clark are hardly a surprise to me. And it makes perfectly sense: the airframe is fully paid for after 12 years and the parts can be used as spare.

Quoting 7BOEING7 (Reply 34):
after life

Well at least we can finally put an end to the endless speculation about the A380's after life  Smile

[Edited 2014-10-14 14:22:15]
 
ikramerica
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 8:46 pm

Quoting KarelXWB (Reply 32):
Same goes for his 777s. So why is this thread focusing on the A380?

Because there is an aftermarket for some 777s, already established. Not that the 772s have much of a life beyond cargo conversion, and we shall see if the 77W does as more A350s are flying.
 
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KarelXWB
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 9:06 pm

Quoting olle (Reply 21):
After 12 years the lease companies has paid off the frames and made a calculated profit. with 3 years additional lease the lease companies are happy, or more then happy it seems.

Now the desert or new home for the frames will be desired of the value for parts compared to the profit that can be made by selling or lease the frame.

Quit simple.

   And let's be honest here, who cares about fully paid airframes being put into the desert?

Alternatively one could turn the airframe into a restaurant   

Quoting olle (Reply 21):
each new generation of engines (15 years?) ads 15-20% more efficiency.

Make that 5-10%.

[Edited 2014-10-14 14:23:17]
 
MIflyer12
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 9:21 pm

Quoting UAEflyer (Reply 18):
i wonder if this might be applicable to USA where close to 8 million passengers flew between SFO & LAX alone within one state

Not a bit. There were over 50 scheduled commercial aircraft passenger ops today on LAX-SFO, operated by five carriers, and the biggest aircraft was a 737-900.
 
lhcvg
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 9:31 pm

Quoting UAEflyer (Reply 18):
i wonder if this might be applicable to USA where close to 8 million passengers flew between SFO & LAX alone within one state, JFK to MIA is a busy air route. Thos routes will one day require an A380.

What you'll see is something akin to ORD-LGA, where (at least historically) there have been timetables where you have, say, two Mad Dogs leaving within 10-15 mins of each other. The 380 is just so much plane when frequency and flexibility (seasonality, time of day, etc.) count so big as in the U.S..
 
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VCEflyboy
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 9:41 pm

It comes down to Math101. If an airplane manufacturer builds a plane that lasts 30 years, they will sell X planes.
If they make an airplane that lasts 10 years, they will sell thrice as many airplanes.

It is like when you buy a laptop or a mobile phone. When you buy it, it is top-of-the-line latest technology. Six months later it is an old obsolete piece of crap. That is how Apple and Samsung are making money.

A+B have realized that, and the ME3 have created a new generation of consumers that expects the biggest, best and newest of everything. Legacy airlines have to adapt to this new reality.
 
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PW100
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 10:01 pm

Quoting Q (Reply 7):
How come all Boeing and McDouglas are over 30-40 years of flying? Now, new planes and service limit up to 12 years? What a waste of money! What's wrong with this? It should be ok up to 20-30 years
Quoting lightsaber (Reply 26):
This is the natural attitude of low interest rates and high oil prices.

Agree.

Look at it this way. The cost of a new A380 is around $200 - 250M.
Now how much fuel cost will the plane see in 12 years of use? Say it flies for around 4500 hrs a year. Over 12 years that is around 55000 hrs. It consumes roughly 11000 kg of fuel per hour. Over 12 years that is 600 million kg of fuel. So if 1 kg fuel cost $1, that is 600 million dollars over the 12 year life of the plane. If you can get a new plane using 10% less fuel (after 12 years), you are saving 60 million dollars over the life span of the plane.

Every four years, a long haul plane burns it own cost in fuel (at 1 dollar per kg).
Doesn’t matter if it’s an A380, or 330 or 777. Exchanging it for a 10% more fuel efficient plane becomes attractive at 12 – 15 years. The higher the fuel price, the faster it becomes attractive to replace. Especially with low interest rates. The times of 30+ years of widebody airframe life is coming to an end. And I think that will also applie for 787 and 350.

When fuel was 30 cents per kg, it did not really matter and, you can fly that plane for 25 -30 years. But at fuel prices approaching or even exceeding one dollar per kg, it does matter. Especially if the cost of financing is historically low. This is why 744s are being parked left and right. Of course the effect is most felt at high utilization and long range planes. The odd 744BCF freighter that operates 800 hrs per year might soldier on for quite some time, as it fuel cost relative to capital cost is much lower, thanks to the lower utilization.

Quoting ikramerica (Reply 36):
Because there is an aftermarket for some 777s, already established. Not that the 772s have much of a life beyond cargo conversion, and we shall see if the 77W does as more A350s are flying

Agree. Wonder how the 777 aftermarket will look like in 5 years from now, when 25+ 787s and A350 are entering the market EACH MONTH, with the 777X just around the corner . . .


PW100
 
fcogafa
Topic Author
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 10:02 pm

That would be a big risk for manufacturers if that were true as the replacement aircraft may not necessarily be acquired from the same company

[Edited 2014-10-14 15:46:20]
 
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bikerthai
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 10:05 pm

Quoting VCEflyboy (Reply 40):
If they make an airplane that lasts 10 years, they will sell thrice as many airplanes.

Alas, unless they revolutionize aircraft manufacturing production line, both Boeing and Airbus will have trouble meeting existing demand let alone having all the major Airline replacing their planes every 15 years.


bt
 
Planesmart
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 10:33 pm

If you want to become an airline powerhouse, you can compete on price, quality, network, frequency, etc, and by operating a young, modern fleet.

If the ME3 can pay a lease based on a 12 year end of life, and the leasor and syndicate members can make a reasonable return, the bar has been raised.

Commercial aircraft life today is less about how engineered parts stand up to hours and cycles, and more about how long the software will be supported.

Do manufacturers want to support old software for 20 plus years, or build new aircraft? Do manufacturers want to keep paying product liability insurance for 20 plus years, or sell new aircraft?

We can make incandescent and energy saving lightbulbs that will last for a millenium. We can make cars that will last 50 years or more. But unless the Green movement can change our thinking, change taxes (like depreciating aircraft and vehicles over a minimum of say 20 years), accept mass unemployment as industries scale down production, then the economic life of commercial airliners is going to shorten.

First term leases on new aircraft are already generally a maximum of 12 years, some with rights of renewal for shorter periods at lower cost.

First term loans on new aircraft are already in single figure years, so if to be retained, the airline arranges replacement funding for subsequent years.

You will also see more strategic disposal, where the operator replaces with new, and wants to ensure the replaced aircraft are not available to a competitor or start-up, either whole or as parts. Or if sold, there are restraints on where they can / can't be operated.

The times they are a changin...
 
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VCEflyboy
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 11:03 pm

This is a great post! I am totally with you.
 
strfyr51
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 11:24 pm

Quoting fcogafa (Reply 2):
Clark is unconcerned. His view, shaped by the Emirates policy of 12-15 year lives for the A380, Boeing 777 and other aircraft in its fleet, is a real eye-opener to an industry where assumed lives are 25-30 years.

Clark is doing what SQ had done for Years. Fly the airplane until it's first major Overhaul which is now between 10-15 years and retire them. What I'll Bet is that Emirates does NOT want those airplanes ever coming back to compete against them
because then They'd be at a cost disadvantage as an overhaul is far and away cheaper than a New airplane Even if it's refurbished with new seats and bins..
 
Gemuser
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 11:26 pm

Quoting planesmart (Reply 44):
Or if sold, there are restraints on where they can / can't be operated.

If they do that they will run into trouble with Trade Practices (anti-trust) laws in at least Australia, the EU & USA. As a result I do see an increase in parting out but not sale with restrictions.

Gemuser
 
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notaxonrotax
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RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 11:29 pm

I for one would find a it a big shame to see A380's of 15 years old to be parked indefinitely.
Wonder what SQ will do with their very first ones?

Quoting kl911 (Reply 5):
Well, they have plenty of desert around DXB..

There sure is.

Quoting UAEflyer (Reply 18):
There is no desert around DXB

I think you'll find that he means "in the area", you know: airplane distance wise.
Not "commuting in your car" distances.

Quoting Q (Reply 7):
How come all Boeing and McDouglas are over 30-40 years of flying

Sure, why don't you just forget about the A300's and A310's still flying around?
And the oldest A320's?

Quoting TheRedBaron (Reply 10):
then scrape
Quoting KarelXWB (Reply 35):
EK A380s will be scraped

What is it with all the "scraping"?

No Tax On Rotax
 
Ruscoe
Posts: 1752
Joined: Sun Aug 22, 1999 5:41 pm

RE: A380s Will Be Parked In The Desert - Clark

Tue Oct 14, 2014 11:57 pm

Quoting UAEflyer (Reply 18):
the growth of the populations world wide and the limited slots avilable, this will force some airlines in Asia in paticular to use the A380s



but isn't this what the 787/350 are all about. Opening up smaller airports to long haul, thus alleviating the "slot" problem

Quoting 7BOEING7 (Reply 16):
I think it's more like he see's no market for them used related to his "lessor" comment.



yes he is sending a clear message to lessors that a) he won't be dumping old 380's on the market and therefore reducing their low residual value even further and b) he's admitting the 380's have a low value anyway otherwise he would take the residual value

Quoting KarelXWB (Reply 32):
Same goes for his 777s. So why is this thread focusing on the A380?


the 380 and 777 are a different kettle of fish when it comes to residual values. The 777 RV is established, and they are in demand, so should continue, the 380 is unknown and looking worse every day.

Quoting planesmart (Reply 44):
the ME3 can pay a lease based on a 12 year end of life, and the leasor and syndicate members can make a reasonable return, the bar has been raised.


I find it very difficult to believe the lessors aren't acutely concerned about the RV on the 380. It is the icing on the cake.
Also if the lessor can pay off the loan and make a profit, better than you can get from bonds or other investments, then why doesn't EK buy the aircraft themselves rather than lease (the payments should be less), and RV doesn't matter if you plan to park them in the desert anyway. I doubt many will be parted because there is not a large pool of old 380's to use those parts. I think most will be scrap value.

Also how many of EK's 380's are owned and how many leased. He can only park the ones he owns, the lessors will have to park the ones he returns.

If he owned most of his 380's he would be wise to hold them a few years after final payout, to really make them a cash cow, until the cost of extra fuel, maintenance etc, exceeded the repayments on a new aircraft. It might even pay EK to buy the 380's at the contractural RV, and continue with them in service. Only EK would know the numbers.

IMO what all this means is that the 380 is likely to have a market RV (not necessarily a contractural RV), which is a little more than scrap value. ( a little more because there will be some demand for old 2nd hand 380's)

Ruscoe

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