Doric Prepares For Return Of 5 SQ A380s

N14AZ · Wed May 11, 2016 2:39 pm

Sorry, just in German language. The article says that Doric makes preparation for the return of up to 5 ex SQ A380s, leasing will expire in 2017:

"It is possible that SQ will not convert the option to extend the leasing contracts" says Doric's CEO.

As a precautionary measure, they already made a reservation for times in the paint facilities and checked the availablity of seats.

Source: http://www.aero.de/news-24073/Doric-...ich-auf-A380-Ruecklaeufer-vor.html

Stitch · Wed May 11, 2016 2:52 pm

SQ does have five outstanding orders with Airbus for the A380-800, so they may choose to return these leased frames and replace them with new builds.

euroflyer · Wed May 11, 2016 3:03 pm

Of which is 9V-SKA, first commercial A380 ever delivered.

parapente · Wed May 11, 2016 3:07 pm

Guess we will find out at Farnbrough. Certainly today's (tomorrows) A380 is massively better than the first few. (Wing twist/Weight rediction/3 RR PiP's/revised interior/ reliability.Perhaps more.

art · Wed May 11, 2016 3:08 pm

Quoting Stitch (Reply 1):
SQ does have five outstanding orders with Airbus for the A380-800, so they may choose to return these leased frames and replace them with new builds

If those 5 are very early production and SQ has contracted to take 5 more, why not replace the 5 on lease with more efficient later production aircraft. They'd be lighter and more aerodynamic, wouldn't they?

Is there any market for the early A380 frames? I'm thinking of the reworked wiring harnesses in particular, although I'm thinking that if the wiring of the first 25 is identical, what does it matter?

LAXintl · Wed May 11, 2016 3:12 pm

Will be interesting to see what happens to residual values and valuation for the model.
Personally I believe parties like lessors could end up upside down having planned for higher end of lease residual values than what the market actually delivers when it happens.

Suppose it also says much of about SIA also, that it believes they cant absorb additional A380 frames across their network.

On the upside, it could be these frames become interesting for IAG based on having the RR engine.

euroflyer · Wed May 11, 2016 3:15 pm

Quoting parapente (Reply 3):
Certainly today's (tomorrows) A380 is massively better than the first few.

Yes, that's more than certain. The early birds were clearly craft work

TheSonntag · Wed May 11, 2016 3:16 pm

The more interesting quotes are actually the following:

Reber stellt Interessenten schon mal "attraktive" Leasingkonditionen auch mit kurzen Laufzeiten unterhalb der üblichen 10 bis 12 Jahre in Aussicht. Die Neueinrichtung früher A380, bei denen die First Class im Hauptdeck installiert ist, sei kein allzu aufwändiges Unterfangen.

Reber is already presenting "attractive" Leasing conditions with short timeframes below the usual 10 to 12 years to interested parties. The refurbishment of those early birds, where the first class is in the main deck, is not that complicated.

Additionally, it is also saying Airbus will help the Leasing companies to place used Frames in asia, where they could be useful for shorter flights.

Heavierthanair · Wed May 11, 2016 3:22 pm

G'day

Quoting N14AZ (Thread starter):
Sorry, just in German language

same thing in English

http://www.bloomberg.com/news/articl...t-for-paint-shop-to-lure-new-users

Cheers

Peter

AngMoh · Wed May 11, 2016 11:57 pm

Quoting euroflyer (Reply 6):

Quoting parapente (Reply 3):
Certainly today's (tomorrows) A380 is massively better than the first few.

Yes, that's more than certain. The early birds were clearly craft work

The SQ CEO has stated in the past in an interview that they will not extend the leases of the first 5 aircraft as they have very much worse economics than the newer aircraft. I think he even made the statement that you can't run the first batch profitable due to the excess weight and other inefficiencies and the newer aircraft don't have these issues. So the 5 on order are purely replacements for the first 5 (again this was explicitly stated in the interview).

And before anyone says: see the whale loses money, the fact is that SQ does order replacements and they won't do that if the A380 is not the right aircraft.

TheRedBaron · Thu May 12, 2016 1:15 am

I bet the only way to make them profitable is to have reasonable lease fees and adding at least 100 to 130 extra seats.

Then agin..weirder things happen when the 380 is involved.

TRB

Revelation · Thu May 12, 2016 1:25 am

Quoting art (Reply 4):
If those 5 are very early production and SQ has contracted to take 5 more, why not replace the 5 on lease with more efficient later production aircraft. They'd be lighter and more aerodynamic, wouldn't they?

The only incentive could be very low lease rates, but that seems unlikely. It seems both sides will benefit from the opportunity to turn these frames over to a new airline.

Coal · Thu May 12, 2016 4:00 am

Quoting LAXintl (Reply 5):
Suppose it also says much of about SIA also, that it believes they cant absorb additional A380 frames across their network.

No it doesn't. If they planned properly years ago, and following their strategy of keeping the fleet young, then returning 5 old A380s and replacing them with 5 new ones doesn't say anything about their capacity of absorbing additional frames that they do not need.

mercure1 · Thu May 12, 2016 4:17 am

Quoting Coal (Reply 12):
No it doesn't. If they planned properly years ago, and following their strategy of keeping the fleet young, then returning 5 old A380s and replacing them with 5 new ones doesn't say anything about their capacity of absorbing additional frames that they do not need.

Actually it does say much.

In reality shows how SQ proper has not experienced any of that Asian miracle boom over the last decade so that it could absorb additional large widebody frames.

While peers like CX have grown tremendously, SQ has essentially been flat fleet size, and seen passengers carried even decline!

Compare fleet sizing in 2007 when 1st SQ A380 was delivered with 2015

CX - 115 / 146
SQ - 98 / 105

And pax carried 2007 / 2015

CX - 23.2mil / 34.1mil
SQ - 19.1mil / 18.7mil

Quite different trajectories ! Wow!

[Edited 2016-05-11 21:20:39]

sutrakhk · Thu May 12, 2016 4:40 am

Quoting mercure1 (Reply 13):
Actually it does say much.

In reality shows how SQ proper has not experienced any of that Asian miracle boom over the last decade so that it could absorb additional large widebody frames.

While peers like CX have grown tremendously, SQ has essentially been flat fleet size, and seen passengers carried even decline!

Compare fleet sizing in 2007 when 1st SQ A380 was delivered with 2015

CX - 115 / 146
SQ - 98 / 105

And pax carried 2007 / 2015

CX - 23.2mil / 34.1mil
SQ - 19.1mil / 18.7mil

Quite different trajectories !

For CX, are you including KA in 2015 figures?

AFAIK, CX have 120 passenger aircraft now

zeke · Thu May 12, 2016 4:48 am

Quoting mercure1 (Reply 13):
In reality shows how SQ proper has not experienced any of that Asian miracle boom over the last decade so that it could absorb additional large widebody frames.

Same can be said of Thai and Malaysian. If you look at the market share of SQ/MH/TG on the Europe-Asia/Pacific routes over the past 10 years you will see they have suffered the the greatest loss in market share to the ME3.

Also the yields in Asia Pacific are not as good as elsewhere, the IATA reported yields for 2015 in the US were $22.48 per passenger, in the EU $7.55 per passenger, middle east $7.19 per passenger, and Asia-Pacific $4.89 per passenger. This would tend to indicate that there is not enough competition in the US.

Quoting mercure1 (Reply 13):
While peers like CX have grown tremendously, SQ has essentially been flat fleet size, and seen passengers carried even decline!

CX actually contracted by one airframe last year, historically CX used to double fleet size every 10 years, since 2012 the fleet size increased only 8%.

hkcanadaexpat · Thu May 12, 2016 5:56 am

Quoting mercure1 (Reply 13):
In reality shows how SQ proper has not experienced any of that Asian miracle boom over the last decade

To be honest, little of that has to do with SQ and a lot has to do with Singapore's geographic location. As Asia is concerned, Singapore is too far south and west to be a hub connecting people around. The only place it makes sense is on the Europe-Australasia route and the Indonesia-Anywhere route and then they hit a wall with the ME3 on anything to Europe. Hong Kong on the other hand is smack in the middle of the action. Chinese use HK to connect south, Japanese/Koreans to connect west/southwest, Indians to connect east/northeast and South East Asians to north/northeast. I wouldn't draw too many conclusions on CX being better than SQ, simply that CX has been drawn a better hand in terms of its geographic location to profit from Asia's economic boom.
A

col · Thu May 12, 2016 5:57 am

I was hoping that SQ kept the early 5 and expand the fleet. They could use them regionally to where I need to go

olle · Thu May 12, 2016 6:26 am

So now we see the reality of the last few years discussions of value after leases?

Can IAG be interested in these frames or will they try with the second batch production frames that are in better condition?

seahawk · Thu May 12, 2016 6:32 am

They will end up in Victorville.

bbiter · Thu May 12, 2016 11:05 am

Maybe IR can take these 5 frames.

Flaps · Thu May 12, 2016 11:21 am

I doubt that anyone is going to pick up these five frames unless maybe for government or vip use. These five examples are the dogs of the production run. Given that status it is also probably a little bit too soon to draw any conclusions on the value of the 380 fleet in general as they come off lease. I think that is going to have to wait until the more improved examples start coming off lease.

seahawk · Thu May 12, 2016 11:33 am

Just like the terrible teens for the 787, nobody will want to touch them used.

MIflyer12 · Thu May 12, 2016 11:53 am

Quoting Revelation (Reply 11):
The only incentive could be very low lease rates, but that seems unlikely. It seems both sides will benefit from the opportunity to turn these frames over to a new airline.

Why would Doric and/or Airbus want these at a new carrier at low lease rates instead of staying with SQ at comparably low lease rates? (There's a cost for reconfiguring, and costs for training and spares that have to be paid somehow.)

I'll join the crowd thinking it's indicative when a carrier the size of SQ can't absorb five incremental frames of the same type.

If the problem is that the old five are dogs, when did A380 manufacture improve to stop making dogs? How many frames total are flying with seriously compromised economics? What's the disposition of those other frames? Is SQ's return of these five just the tip of the spear?

na · Thu May 12, 2016 12:05 pm

Quoting MIflyer12 (Reply 23):
What's the disposition of those other frames? Is SQ's return of these five just the tip of the spear?

I remember an interview 2 or 3 years ago with an SQ manager saying the (newerß) A380s are more efficient on routes they can be filled when compared to the 77W.

The A380s in question are ln. 3, 5, 6, 8 and 10, built in 2006/2007. The first three are older than any other in airline service (EKs oldest is ln.7). Airbus was still "experimenting" when they built them.

I guess they would do best in high density configuration in Asia or on pilgrim travel.

N14AZ · Thu May 12, 2016 12:06 pm

Quoting MIflyer12 (Reply 23):
I'll join the crowd thinking it's indicative when a carrier the size of SQ can't absorb five incremental frames of the same type.

I think this is not the correct conclusion, because:

Quoting AngMoh (Reply 9):
The SQ CEO has stated in the past in an interview that they will not extend the leases of the first 5 aircraft as they have very much worse economics than the newer aircraft. I think he even made the statement that you can't run the first batch profitable due to the excess weight and other inefficiencies and the newer aircraft don't have these issues. So the 5 on order are purely replacements for the first 5 (again this was explicitly stated in the interview).

+

Quoting Coal (Reply 12):
No it doesn't. If they planned properly years ago, and following their strategy of keeping the fleet young, then returning 5 old A380s and replacing them with 5 new ones doesn't say anything about their capacity of absorbing additional frames that they do not need.

Quoting MIflyer12 (Reply 23):
How many frames total are flying with seriously compromised economics?

I think this is an exaggeration. If they had "seriously compromised economics" they would not be flying.

Revelation · Thu May 12, 2016 12:31 pm

Quoting MIflyer12 (Reply 23):

Why would Doric and/or Airbus want these at a new carrier at low lease rates instead of staying with SQ at comparably low lease rates? (There's a cost for reconfiguring, and costs for training and spares that have to be paid somehow.)

I'm sure D and A want them to stay at SQ but SQ has the option of taking new frames, and the sale of new frames helps the overall value of the fleet stay high.

In my mind, D will have to find a new operator that wants to enter the A380 class of airplane but doesn't have the financial strength of SQ so will be willing to pay a higher lease rate. Not sure who that is right now, but I'm sure they're working on it.

Quoting MIflyer12 (Reply 23):
I'll join the crowd thinking it's indicative when a carrier the size of SQ can't absorb five incremental frames of the same type.

SQ at 19 frames is the 2nd largest operator of the type so the 'increment' is 25% of the worlds 2nd largest fleet.

That information may or may not support your use of the word 'indicative', depending on what you are trying to indicate.

mercure1 · Thu May 12, 2016 12:45 pm

Quoting hkcanadaexpat (Reply 16):
To be honest, little of that has to do with SQ and a lot has to do with Singapore's geographic location.

Not at all. Geography has not stopped Singapore market from growing very substantially. Just SQ mainline has not been part of that growth.

SIN passenger volume.

2007 - 36,701,556
2015 - 55,448,964

http://en.wikipedia.org/wiki/Singapore_Changi_Airport

diverdave · Thu May 12, 2016 1:02 pm

Quoting AngMoh (Reply 9):
as they have very much worse economics than the newer aircraft. I think he even made the statement that you can't run the first batch profitable due to the excess weight and other in

Is there any available data to quantify as to how much worse the economics are on these frames? I just have no idea if it's a few points on fuel burn, or if it's materially worse than that.

Thank you,
David

AirbusA6 · Thu May 12, 2016 1:15 pm

Quoting mercure1 (Reply 13):
CX - 115 / 146
SQ - 98 / 105

And pax carried 2007 / 2015

CX - 23.2mil / 34.1mil
SQ - 19.1mil / 18.7mil

Do the SQ figures include Scoot?

DTWPurserBoy · Thu May 12, 2016 1:19 pm

SQ has a long history of keeping airplanes for 7-10 years and then flipping them to avoid high maintenance costs. I would not be at all surprised to see SQ take delivery of new frames to replace these older models.

N14AZ · Thu May 12, 2016 1:40 pm

Quoting DTWPurserBoy (Reply 30):
I would not be at all surprised to see SQ take delivery of new frames to replace these older models.

I wouldn't be suprised either..... considering SQ's CEO already said so in the past.

Quoting seahawk (Reply 19):
They will end up in Victorville.

That's one scenario as well, of course:

Case 1: SQ extends Leasing (unlikely given the CEO comments, maybe only possible if Doric makes a "irresistable" offer)
Case 2: SQ returns the A380's and Doric finds a new operator for them
Case 3: SQ returns the A380's and Doric doesn't find a new operator for them => Victorville*)

-------
*) I guess you use the word "Victorville" in symbolic way (like El Dorado or Sodom and Gomorrah), could be one of these storage airports in Spain or France as well

There is one issue that has not yet been discussed, correct me if I am wrong: when will the five new A380's ordered by SQ in 2012 be delivered? As per Wikipedia it's 2017 but I guess this is outdated. So far there was no sign (convoy) of one of these additional A380's. So I guess it will be even 2018 until they have all five new A380's. And if they don't want to downsize they would have to extend leasing at least for some of the old birds and at least some years, correct?

mercure1 · Thu May 12, 2016 1:52 pm

Quoting AirbusA6 (Reply 29):
Do the SQ figures include Scoot?

No, and not cargo either.

Source is SIA annual report.

2007
https://www.singaporeair.com/saar5/pdf/Investor-Relations/Annual-Report/annualreport0708.pdf

SQ - 98 aircraft
SQC - 14
MI - 14

2015
https://www.singaporeair.com/saar5/pdf/Investor-Relations/Annual-Report/annualreport1415.pdf

SQ - 105
SQC - 8
MI - 27
TZ - 6
TR - 24

LAXintl · Thu May 12, 2016 2:27 pm

Quoting Coal (Reply 12):
No it doesn't. If they planned properly years ago, and following their strategy of keeping the fleet young, then returning 5 old A380s and replacing them with 5 new ones doesn't say anything about their capacity of absorbing additional frames that they do not need.

LOL

So you are saying SIA corporate planned that SQ would never grow? Essentially remain flat in the middle of most rapidly growing economic region globally for a decade?

Non-sense.

What has happened is the market around SQ has grown immensely, just SQ has not been able to capitalize and capture that growth. SIA has had to instead use other vehicles to keep competitive - Silk Air, Scoot, Tigerair.

aerokiwi · Thu May 12, 2016 3:03 pm

Quoting mercure1 (Reply 27):
Just SQ mainline has not been part of that growth.

Ah so you refined it a little to just be "mainline".

Quoting mercure1 (Reply 32):
No, and not cargo either.

If you're not including Scoot and SilkAir, and for that matter, Cathay Dragon, then you're not really comparing like with like. And isn't ASKs a better comparison again rather than fleet numbers?

Quoting DTWPurserBoy (Reply 30):
SQ has a long history of keeping airplanes for 7-10 years and then flipping them to avoid high maintenance costs. I would not be at all surprised to see SQ take delivery of new frames to replace these older models.

Yeah this isn't a surprise. I'm not sure what point is trying to be scored here with the "SQ is stagnating" crowd.

DTWPurserBoy · Thu May 12, 2016 8:50 pm

In a few years there is going to be such a glut of used A380, B77W, A330/200/300 and B777ER's. Some might find new homes but I am betting a lot will be returned to the lessors and then to the scrappers for parts. Reduce the available inventory and prices tend to go up.

mercure1 · Thu May 12, 2016 9:16 pm

Quoting aerokiwi (Reply 34):
Ah so you refined it a little to just be "mainline".

SQ is only SQ mainline. SQ is a single airline.

Quoting aerokiwi (Reply 34):
If you're not including Scoot and SilkAir, and for that matter, Cathay Dragon, then you're not really comparing like with like. And isn't ASKs a better comparison again rather than fleet numbers?

Silk, Scoot and Tigerair are different airlines are not part of SQ. SIA yes, but not SQ. The 3 other airlines have all grown immensely while SQ has not over the last decade.

Sure compare ASK (million).

SQ
2007 - 113,919
2015 - 120,008

Again SQ essentially flat 8-years later. Not even 1 pct growth annually.

Planesmart · Thu May 12, 2016 10:34 pm

Quoting MIflyer12 (Reply 23):
Why would Doric and/or Airbus want these at a new carrier at low lease rates instead of staying with SQ at comparably low lease rates? (There's a cost for reconfiguring, and costs for training and spares that have to be paid somehow.)

Depends whether Doric funded the lease based on a completely fitted out aircraft, or whether SQ separately funded the interior.

If the former, it's usual practice, for the lease to incorporate a final balloon payment to pro rata pay for the cost of the interior, just as for airframe and engine maintenance. The days of returning a leased aircraft with every component worn out or nearly time expired, without financial consequence, has long gone.

In respect to the interior, if applicable, there will be a side agreement which documents a formula for calculating the payment, a process for arbitration, who can arbitrate, etc.

Stitch · Thu May 12, 2016 10:47 pm

Quoting Planesmart (Reply 37):
Depends whether Doric funded the lease based on a completely fitted out aircraft, or whether SQ separately funded the interior.

If the former, it's usual practice, for the lease to incorporate a final balloon payment to pro rata pay for the cost of the interior, just as for airframe and engine maintenance.

I am confident in thinking that Singapore's First and Business Class product is patented so Doric would have to pull it out if they place the plane with a new owner and I would expect they would be compensated for that cost by SQ (as you noted).

lightsaber · Thu May 12, 2016 11:33 pm

Quoting mercure1 (Reply 13):
And pax carried 2007 / 2015

CX - 23.2mil / 34.1mil
SQ - 19.1mil / 18.7mil

In 2007 I'll admit I thought SQ was on the steeper growth path. The region has gone more economy... Cest la vie. The regional LCCs have impacted SQ more than the ME3 IMHO.

Quoting seahawk (Reply 22):
Just like the terrible teens for the 787, nobody will want to touch them used.

I agree. The overhaul costs will be extreme. The whole wiring maintenance plan for the A389 fails on early build, the planned method to install replacement harnesses won't work!

Quoting DTWPurserBoy (Reply 35):
In a few years there is going to be such a glut of used A380, B77W, A330/200/300 and B777ER's

DL will feast.

Seriously, this throws a hand grenade into the spare parts markets . Due to the impressive efficiency and maintenance advantages of the 787, A350, A330NEO, and 779... The expels remaining will be lower utilization taking advantage of discount parts.

Lightsaber

infinit · Fri May 13, 2016 5:30 am

SQ will give it back because they are less fuel-efficient and also because of SQ's strategy of keeping thei fleet young.

It is evident from the posts year that many of you guys dont know this about SQ. From as far back as their high-growth period circa the 80s and 90s, SQ surprised the industry when they got rid of their widebodies before they turned 10 years old. They have always been doing that

N14AZ · Fri May 13, 2016 7:57 am

Quoting infinit (Reply 40):
SQ will give it back because they are less fuel-efficient and also because of SQ's strategy of keeping thei fleet young.

It is evident from the posts year that many of you guys dont know this about SQ. From as far back as their high-growth period circa the 80s and 90s, SQ surprised the industry when they got rid of their widebodies before they turned 10 years old. They have always been doing that

After reading your contribution I was wondering how they will deal with the A380's #06 to #10...

The first five A380s were delivered from October 2007 until June 2008 as follows:
MSN 003 - 9V-SKA: 2007-10
MSN 005 - 9V-SKB: 2008-01
MSN 006 - 9V-SKC: 2008-03
MSN 008 - 9V-SKD: 2008-04
MSN 010 - 9V-SKE: 2008-06

The next five A380s were delivered within one year after that, from September 2008 until September 2009 as follows:
MSN 012 - SQ - 9V-SKF: 2008-09
MSN 021 - SQ - 9V-SKH: 2009-05
MSN 019 - SQ - 9V-SKG: 2009-06
MSN 034 - SQ - 9V-SKI: 2009-07
MSN 045 - SQ - 9V-SKJ: 2009-09

So will they deal with their A380s's # 6 to #10 the same way as the first five A380s? If yes, we would see a follow-up-order soon. Or, will they only replace the very first five A380s due to the "nature" of their manufacturing and "surprise the industry" by keeping the rest of their A380s for longer than 10 years?

infinit · Fri May 13, 2016 9:05 am

Quoting N14AZ (Reply 41):

As I assume they still have the same fleet management strategy, I would expect #6 to #10 to leave the fleet soon and either:

1. Be replaced by newer 380s
2. Be replaced by smaller aircraft

Ncfc99 · Fri May 13, 2016 10:10 am

Quoting N14AZ (Reply 41):

Quoting infinit (Reply 42):

IIRC, the quick replacement of frames at SQ historically was, in part, due to depreciation rules. These rules have since changed making it viable for SQ to keep frames longer, up to 15 years IIRC. I can see frames 6-10 staying around longer if that is the case, if they have the standard wiring harnesses. Can anyone confirm the rule changes regarding depreciation?

Bongodog1964 · Fri May 13, 2016 11:42 am

Quoting infinit (Reply 40):
It is evident from the posts year that many of you guys dont know this about SQ. From as far back as their high-growth period circa the 80s and 90s, SQ surprised the industry when they got rid of their widebodies before they turned 10 years old. They have always been doing that

Operating aircraft for the 1st part of their life is highly attractive whilst there are buyers for them as they exit the fleet. The problem comes when no such operator can be found.
In that scenario either the leasing company takes a big hit when they are left with a 10 year old plane with a book value far exceeding its worth, or the operator has paid huge leasing fees due to the recognition that the airframe will be of little value at the end of the lease.

In the case of the A380, its a big aircraft which reduces the number of operators to a mere handful.

There is also the fact that many airlines which would once have been considered ideal candidates to take 7- 10 year old frames are now not only buying new, but are close to the front of the line to take them.

Vietnam airlines is a prime example.

Polot · Fri May 13, 2016 1:02 pm

It is not unheard of for SQ to keep planes longer than 10 years nowadays. The 772/773As are all at or quickly approaching 15 years old, and the oldest 77Ws are getting close to 10.

They are getting rid of A330s young, but they were also ordered on short term leases in the first place because of A380 and 789 delays. I expect the next 5 A380s to stick around for several more years before SQ decides how to replace them.

With SQ's current size and the world wide demand for new aircraft it is just not feasible for SQ to roll over their fleet in 10 years anymore.

Planesmart · Sat May 14, 2016 6:09 am

Quoting Ncfc99 (Reply 43):
IIRC, the quick replacement of frames at SQ historically was, in part, due to depreciation rules. These rules have since changed making it viable for SQ to keep frames longer, up to 15 years IIRC. I can see frames 6-10 staying around longer if that is the case, if they have the standard wiring harnesses. Can anyone confirm the rule changes regarding depreciation?

For SQ, historically, the rapid turnover of aircraft was due to two factors - capital investment incentives and depreciation, and the fact back in the mists of time, SQ was very, very profitable, and accelerated depreciation was a tool to defer / smooth profits and tax.

Post GFC, the financial landscape is rather different.

If SQ replace the five early build A380's with new, the five later builds could remain to 14-15 years, subject to agreement on price. If they don't replace the early builds with more A380's, the remaining five are unlikely to remain either.

Don't rule out a super sharp lease extension, with Doric footing the bill for new engines to the very latest specs, an allowance for interior refurbishment, and even a lease holiday.

An existing leasee extending leases, especially a model with a limited used market, is in a very powerful position.

mjoelnir · Sat May 14, 2016 10:16 am

Quoting Stitch (Reply 38):
I am confident in thinking that Singapore's First and Business Class product is patented so Doric would have to pull it out if they place the plane with a new owner and I would expect they would be compensated for that cost by SQ (as you noted).

The question is not about if the seats are patented, but who owns them. A patent restricts production, protects from copying. If SQ does not want anybody to use their seats, they have to shred them after use.

mjoelnir · Sat May 14, 2016 10:21 am

Quoting Ncfc99 (Reply 43):
IIRC, the quick replacement of frames at SQ historically was, in part, due to depreciation rules. These rules have since changed making it viable for SQ to keep frames longer, up to 15 years IIRC. I can see frames 6-10 staying around longer if that is the case, if they have the standard wiring harnesses. Can anyone confirm the rule changes regarding depreciation?

Depreciation is a factor when you own the bird, not when you lease it. In this case the only question is how long does the leasing contract run and do you want to extend it.

ZKCIF · Sat May 14, 2016 12:21 pm

Quoting N14AZ (Reply 41):
The next five A380s were delivered within one year after that, from September 2008 until September 2009 as follows:
MSN 012 - SQ - 9V-SKF: 2008-09
MSN 021 - SQ - 9V-SKH: 2009-05
MSN 019 - SQ - 9V-SKG: 2009-06
MSN 034 - SQ - 9V-SKI: 2009-07
MSN 045 - SQ - 9V-SKJ: 2009-09

I would say that we should have to distinguish between SKF, SKH, SKG and SKI, SKJ because the former are essentially hand-assembled, heavier and unique while frames with MSNs 27+ are more standard and less heavy. Thus I'm sure F,G,H don't have the economics which SKI and SKJ do have

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