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Revelation
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IATA: A380 Stagnation

Fri Jun 03, 2016 1:28 pm

Some reports from the IATA conference in Dublin regarding the A380.

http://aviationweek.com/commercial-a...irates-airbus-talks-a380neo-lapsed says:

Quote:

Talks between Airbus and Emirates about the proposed A380neo have “lapsed," Emirates Airline President Tim Clark said.

“The A380neo would be nice to have, but I cannot force Toulouse to do anything,” Clark told reporters here at the IATA annual general assembly in Dublin. The end of these talks means what at one point looked like a pressing project for Airbus to rescue the A380 will now be put off for the foreseeable future.

So A380neo is stagnant with no uptake in sight.

http://aviationweek.com/iata-agm-201...t-plans-include-a380-phaseout-2018 talks about MAS's fleet plans and reports:

Quote:

However, all of the A380s will leave the fleet by June 2018.

MAB attempted to sell two of its six A380s in 2015, but did not find buyers and so elected to retain the aircraft until the A350s arrive. Mueller said the airline probably will remarket the A380s in about a year. MAB has in-house capability to reconfigure the A380s to meet customer requirements.

The A380s are too large for optimal efficiency on the London route, Mueller noted. However, they are the only aircraft remaining in MAB’s fleet that can operate such a flight.
http://www.reuters.com/article/airli...-iata-qatarairways-a-idUSFWN18V03P says:

Quote:
Qatar Airways is not interested in buying any more A380 super jumbo jets, nor is it interested in a possible stretched version of the larger version of the A350 plane, its CEO said on Friday.

"We already have 777-9X and I think the aircraft that we bought will do the job we want it to do," Akbar al Baker said of the potential stretched A350
http://www.thenational.ae/business/a...er-most-for-turkish-airlines-chief says:

Quote:

DUBLIN // The chief executive of Turkish Airlines is not averse to the Airbus A380 super­jumbo, but would prefer greater frequencies using smaller aircraft.

“I’m not against the machine," said Temel Kotil in Dublin, referring to the world’s biggest aircraft, the Airbus A380, cap­able of carrying nearly 600 passengers.

“We are lacking the frequencies. That’s why the [Boeing] 777s and [Airbus] 330s are working everywhere," Mr Kotil added. “I am after increasing the frequencies. Frequencies bring me more money."

Seems the program has totally stagnated. Airbus should be thanking their lucky stars that EK is still willing to take A380ceos and that Iran's sanctions have been lifted. I think it's clear that NK's uptake of three frames is being done under duress and all the rest of the news is, frankly, bleak. We're not even getting our usual "several campaigns going on, expect at least one new customer this year" trope.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 3:12 pm

Quoting Revelation (Thread starter):
So A380neo is stagnant with no uptake in sight.

Sounds like only EK was really interested in it and they can just keep taking the current model as it works exceptionally well with them.



Quoting Revelation (Thread starter):
Seems the program has totally stagnated. Airbus should be thanking their lucky stars that EK is still willing to take A380ceos and that Iran's sanctions have been lifted.

Honestly not sure Iran is going to be a major (or even minor) customer of the type.

What could be interesting is if EK becomes the only remaining active customer (of size, at least) for the frame, what they and Airbus can do together to really optimize it for EK's operations, which would allow EK to utilize it against competitors even more effectively than they already are.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 3:20 pm

Quoting Stitch (Reply 1):
Honestly not sure Iran is going to be a major (or even minor) customer of the type.

I really wonder what the hurry is for IR. I understand that A380s can become available relatively quickly and they need capacity, but I'd think the safer play is to lease ex-EK frames or ex-MAS frames as they become available so they can walk away if they end up not being able to utilize them well.

Quoting Stitch (Reply 1):
What could be interesting is if EK becomes the only remaining active customer (of size, at least) for the frame, what they and Airbus can do together to really optimize it for EK's operations, which would allow EK to utilize it against competitors even more effectively than they already are.

It's an interesting consideration, but note that both Enders and Bregier have said they will not launch A380neo for one customer, so Airbus will need to keep the airframe attractive to others if there ever is to be an A380neo.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 3:39 pm

Quoting Revelation (Thread starter):
So A380neo is stagnant with no uptake in sight.

I think that's a slightly pessimistic view of the current status, but probably not too far from the truth at the moment (with the possible exception of an IR order and maybe even a top-up from IAG).

But, let's assume that things have stagnated. If EK maintain their fleet at 140, and replace frames every 12 years, that's enough to support continued production at 1 per month. Then, if even only half of the other operators decide to maintain their current/ordered fleet sizes with similar 12-15 year replacement, Airbus could maintain the line at ~1.5 per month. I doubt that they'd be too unhappy if that were to happen.

Personally, I'd be very surprised if, over the next couple of decades, Airbus does not manage to sell a few more to some new operators, or if none of the other existing operators increase their fleets.

Quoting Stitch (Reply 1):
Honestly not sure Iran is going to be a major (or even minor) customer of the type.

I'm hearing that the IR order is pretty much a done deal, unless they cannot get the finance and payments issues resolved. Have a feeling we will know a lot more by the end of the Farnborough show.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 4:20 pm

Quoting speedbored (Reply 3):
I doubt that they'd be too unhappy if that were to happen.

Hey, they'd be running at twice the 747-8 rate!  

We see them shifting facilities built for the A380 over to A320 and A350 so it seems they accept the situation.

Quoting speedbored (Reply 3):
Personally, I'd be very surprised if, over the next couple of decades, Airbus does not manage to sell a few more to some new operators, or if none of the other existing operators increase their fleets.

I think there will be backfill, but there will also be some operators abandoning the smaller sub-fleets (MH, TG, etc).

Quoting speedbored (Reply 3):
I'm hearing that the IR order is pretty much a done deal, unless they cannot get the finance and payments issues resolved. Have a feeling we will know a lot more by the end of the Farnborough show.

Still amazing to think they will go from nothing to being the 4th largest operator of A380 in such a short span of time.

I guess they feel they need to strike whilst the iron is hot.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 4:37 pm

Quoting Revelation (Reply 2):
It's an interesting consideration, but note that both Enders and Bregier have said they will not launch A380neo for one customer, so Airbus will need to keep the airframe attractive to others if there ever is to be an A380neo.

I am thinking that maybe there isn't going to be a neo.

Quoting speedbored (Reply 3):
I'm hearing that the IR order is pretty much a done deal, unless they cannot get the finance and payments issues resolved. Have a feeling we will know a lot more by the end of the Farnborough show.

Oh I expect IR will take them. I am just not sure IR will take any more (especially in the dozens or scores).
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 4:54 pm

Quoting Revelation (Reply 2):
It's an interesting consideration, but note that both Enders and Bregier have said they will not launch A380neo for one customer, so Airbus will need to keep the airframe attractive to others if there ever is to be an A380neo.

I am sure they will do what is possible within the current architecture of the airframe. But they won't be spending too much money there I would presume.

An A380-neo only makes sense imho with totally new engines like a possible RR-Advanced. Which could be available in 2025 for an EIS. So plenty of time to launch the A380-neo in 2020. If there is still demand for it which I hope it will.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 4:59 pm

Nothing I read here is a REVELATION. I cannot see that anything could be discussed here that has not been discussed at length in numerous threads in this forum before. I propose closure of this thread.

[Edited 2016-06-03 10:00:21]
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 5:03 pm

Quoting JayBCNLON (Reply 7):
Nothing I read here is a REVELATION. I cannot see that anything could be discussed here that has not been discussed at length in numerous threads in this forum before. I propose closure of this thread.

And then you post this? 3-4-3 777s: Can An Airline Be 5-star? (by JayBCNLON Jun 3 2016 in Civil Aviation)
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 5:13 pm

Quoting Revelation (Thread starter):
I think it's clear that NK's uptake of three frames is being done under duress

I think you mean NH. NK would have 0 use for an A380.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 5:14 pm

Two interesting things here. First, while there is some question that Airbus can eke out a profit at 20 planes a year they may need to go even lower. Second, Iran seems to me a better customer if they could take on 380s in the used market. A demonstration that it was profitable would be a boost to the program.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 5:29 pm

Quoting Stitch (Reply 5):
I am thinking that maybe there isn't going to be a neo.

Latest comments from Airbus suggest that there will, and it's been quite a while since the last time Airbus have said this.

From Kieran Rao, executive vice president of strategy and marketing:
"Airbus will eventually stretch and re-engine the A380, since the aircraft will be around for the next 30-40 years."

I'm still convinced that the timing will all be down to if/when they can convince RR to commit to do an engine.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 5:41 pm

Quoting speedbored (Reply 11):
I'm still convinced that the timing will all be down to if/when they can convince RR to commit to do an engine.

Last we heard, Airbus had determined that the Trent XWB was more engine than necessary. So why not the Trent TEN? Seems like the right range of thrust levels.

I'm not convinced the engine is the blocking factor with the A380neo. I think the problem is that 1) without the stretch it's not enough of an improvement to sell the needed number of copies but 2) with the stretch it's too expensive to develop.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 5:51 pm

Quoting seabosdca (Reply 12):
So why not the Trent TEN? Seems like the right range of thrust levels.

Not enough of an improvement. I'm sure that Airbus want an Advance engine.

But with the way they keep pushing this further and further out, they might end up with an Ultrafan  
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 6:40 pm

Quoting Revelation (Thread starter):
“We are lacking the frequencies. That’s why the [Boeing] 777s and [Airbus] 330s are working everywhere," Mr Kotil added. “I am after increasing the frequencies. Frequencies bring me more money."

This is the rub, at some point higher frequencies have a higher (sounds like) RASM. I am wondering if they command more premium fares overall.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 6:48 pm

Quoting justloveplanes (Reply 14):
This is the rub, at some point higher frequencies have a higher (sounds like) RASM. I am wondering if they command more premium fares overall.

The most expensive Economy fares are based on their flexibility (changes, refunds) so offering more schedule flexibility (via frequency) would appeal to those who travel on those types of fares.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 6:59 pm

Quoting Revelation (Thread starter):
We're not even getting our usual "several campaigns going on, expect at least one new customer this year" trope.

I guess you have missed the latest WSJ article: http://tinyurl.com/htfcddx

Quote:
Airbus Group SE expects to conclude agreements for further A380 superjumbo sales this year as it refines the double-decker planes’ layout to improve economy.

The deals could come from a mix of new customers and existing ones, Chris Buckley, the plane maker’s executive vice president, Europe, Asia and Pacific, said in an interview on the sidelines of the International Air Transport Association’s annual meeting.

He wouldn’t identify the potential buyers.

The A380 cabin is being redefined to make better use of the available space; incremental developments on the program are still ongoing. No stagnation here.

As for the A380neo, I have said it before: there's no business case with today's oil prices. Even the A330neo and 777X would never have been launched in today's environment.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 7:02 pm

Funny that there are no stories of 748 stagnation - or perhaps it is realised the 748 is beyond stagnation.

I will miss the old queen when she goes. I always loved flying on them.
 
JayBCNLON
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 7:16 pm

Can we then change the title and at least add a question mark? Otherwise it appears as if the whole thread is there only to support the current Headline, which is misleading.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 7:22 pm

The world's biggest A380 fan is worried that Airbus will stop production:

Quote:
“I can’t force Toulouse to do anything,” Emirates President Tim Clark told reporters on Friday at a briefing in Dublin, referring to Airbus’s home base in southern France. “My main concern is that they stop producing the plane.”
http://www.bloomberg.com/news/articl...o-pushes-to-get-its-142-superjumbo
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 7:24 pm

Quoting StTim (Reply 17):
Funny that there are no stories of 748 stagnation - or perhaps it is realised the 748 is beyond stagnation.

Sadly, that is true. One generally don't kick dead horses. The 380 seems to have some life left in her.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 8:39 pm

Quoting speedbored (Reply 13):
I'm sure that Airbus want an Advance engine.

And I'm sure RR wants to build them one, but the sums must add up.

Quoting KarelXWB (Reply 16):
I guess you have missed the latest WSJ article: http://tinyurl.com/htfcddx

Ahh, I knew it should be out there somewhere.

Quoting StTim (Reply 17):
Funny that there are no stories of 748 stagnation - or perhaps it is realised the 748 is beyond stagnation.

Certainly.

Quoting JayBCNLON (Reply 18):
Can we then change the title and at least add a question mark? Otherwise it appears as if the whole thread is there only to support the current Headline, which is misleading.

It's pretty accurate, all of the reports from IATA meeting are saying that the A380 is stagnating.

Quoting Matt6461 (Reply 19):
“My main concern is that they stop producing the plane.”

I think he's joking, but you never know, the old saying is "there's truth in jest".

In any case, it seems EK will own the last A380 off the line, unless there is ever a need for a "EU Force One"...
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 8:52 pm

Quoting Revelation (Reply 21):
It's pretty accurate, all of the reports from IATA meeting are saying that the A380 is stagnating.

That is just a strange comment. Stagnating means there would be no further development at all. To counter that argument:

1) Airbus keeps working on improvements. The lack of an A380neo doesn't mean the A380 program is stagnating.
2) The cabin has just been redefined; improvements are ongoing like any other program.
3) Rolls-Royce just introduced the Trent 900 EP3 package.
4) We have finally seen three new orders (NH, EK and IR) since 2013.
5) Chris Buckley - not John Leahy this time - expects more orders this year.

From where I sit, the A380 program seem busier than the last few years. Doesn't look like stagnating to me.
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 9:23 pm

Quoting StTim (Reply 17):
Funny that there are no stories of 748 stagnation - or perhaps it is realized the 748 is beyond stagnation.

The 747-8's obituary has already been written in the press over the past 12-18 months, though one could say that the recent articles about the latest rate cut directly reflects the program's sales stagnation.
 
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RE: IATA: A380 Stagnation

Fri Jun 03, 2016 9:23 pm

Quoting KarelXWB (Reply 22):
Stagnating means there would be no further development at all.

No, it means there is a lack of it, not a total absence of it.

For instance an actor with a stagnant career is not getting enough work relative to their potential, as opposed to getting no work at all. A stagnant river isn't one that has gone dry, it's one that isn't flowing like it should.

And thus...

1) So if the 77W was not getting a new engine or wing, you'd say it wasn't stagnant?
2) So if the 77W was only getting a few interior tweaks instead of a new wing and engine, you'd say it wasn't stagnant?
3) So if the 77W was only getting an engine PIP instead of a new wing or engine, you'd say it wasn't stagnant?
4) So if the 77W only had orders from three customers since 2013 you'd say it wasn't stagnant?
5) So if Boeing's VP for Europe felt he had to say he expects more orders this year, you'd say it wasn't stagnant?

[Edited 2016-06-03 14:36:43]
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 12:52 am

New-build A380 is dead once existing orders are filled and 2020 hits with 779 starts rolling in quantities. A380 no longer will CASM advantage. The only advantage of the frame will be pax/slot ratio (density) for the few airports in the world where that is a concern. 777x will be less risk and likely generate higher margins (overall frequency, supply&demand) on heavy traffic routes.
 
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 6:51 am

Quoting Okcflyer (Reply 25):
New-build A380 is dead once existing orders are filled and 2020 hits with 779 starts rolling in quantities.

People have been predicting the demise of the A380, on a weekly basis, for many years now. As I pointed out above, even just EK maintaining a fleet of 140 with a max age of ~12 years, as they say they intend to do, would be enough to keep the line going at a perfectly acceptable rate.

Quoting Okcflyer (Reply 25):
A380 no longer will CASM advantage.

... if you believe that marketing numbers are totally accurate, and that Airbus will stop the process of continuous improvement that they have always carried out on all of their aircraft programs.

If you look at comments from EK over the years about the relative performance of their 777 and A380 fleets, and combine that with what Boeing have been saying the performance improvement of the 779 will be compared to the 77W, then it seems that in real world operations, things may well turn out a little different from what many people seem to be hoping.

We've yet to see whether or not Boeing will manage to hit their targets. The contractual guarantees they have given to at least one airline that I am aware of suggest that Boeing think the published marketing numbers might be a little difficult to achieve.
 
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 7:44 am

I think there is a huge perception issue due to sales pattern : EK has ordered 80 A380s the last 6 years.
6 years ago was the beginning of the slowdown of orders by the other carriers.

Most of the A380s were expected to fly between Europe and Asia and this is exactly what is happening, except that one guy on this market ordered the whole batch - rather than having one carrier ordering 15 A380s every year... which would completely change the perception of this program.

Airbus would make a huge mistake stopping the program. Demand in Asia is still booming and there is a huge concentration of demand, both geographically and schedule wise. Hubs in the world were never as big as of today. Other airlines than EK will need the size.
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 10:57 am

Quoting speedbored (Reply 27):
EK maintaining a fleet of 140 with a max age of ~12 years, as they say they intend to do, would be enough to keep the line going at a perfectly acceptable rate.

It's 142 frames now, but STR has talked about extending the leases if there isn't a NEO so there's no guarantee of fresh orders from EK.

I personally think the time for the A380 is 2025. That's when traffic growth and new tech will meet. Both the A380 and the 787 will require similar thrust and will both be coming up for an update then, and that should be the same time a widebody geared turbine is available. Such a plane would wipe the floor with the 77X.

I just hope they can keep production going till then, but if not I can see them suspending it until the NEO is ready.
 
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 2:57 pm

Quoting speedbored (Reply 27):
As I pointed out above, even just EK maintaining a fleet of 140 with a max age of ~12 years, as they say they intend to do, would be enough to keep the line going at a perfectly acceptable rate.

It would not be a perfectly acceptable rate. It may be a survivable rate.
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 3:53 pm

Quoting frmrCapCadet (Reply 30):
It would not be a perfectly acceptable rate.

Why not? It's the same as the current 757-8 rate, and double what it will be from September, which seems to be perfectly acceptable to Boeing.

Quoting frmrCapCadet (Reply 30):
t may be a survivable rate.

Which would make it acceptable, would it not?
 
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 3:59 pm

I am making the assumption that most EK 380s that come off of lease will not find a home. Does the current lease rate (plus salvage value) build in a return at market or above for the Lessor? Could an adjustment of lease rates for this scenario push them up to the point where it is more advantageous for EK to renew some leases? Could there be a change in lease terms so that certain heavy maintenance is not done during the lease term and they are not eligible for renewal?
 
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RE: IATA: A380 Stagnation

Sat Jun 04, 2016 10:58 pm

Quoting kurtverbose (Reply 29):
I personally think the time for the A380 is 2025.

By 2025 the A380 will be a 20yo airframe and the only mostly-metal true long-hauler produced (if it's still produced).
I don't get why folks think it will do so much better when it's older than it would in 2020.
This appears to discount the foreseeable improvements to the competition, such as 787/A350 re-engining and the possibility of MoM/NMA being at least on the horizon by then. (Plus the China/Russia widebody)

Many here look at "competition" as being solely within size brackets, but that's not how the economics will actually work out. If smaller planes match a 2025 NEO's engine tech, the CASM edge for the A380 will be very slight. Airlines and passengers will increasingly tend toward fragmentation and bridge-hub bypass unless a compelling efficiency rationale points elsewhere - an efficiency rationale that a simple NEO will be unlikely to provide.
 
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 12:45 am

Quoting Matt6461 (Reply 33):
and the only mostly-metal true long-hauler produced (if it's still produced).
I don't get why folks think it will do so much better when it's older than it would in 2020.
This appears to discount the foreseeable improvements to the competition, such as 787/A350 re-engining and the possibility of MoM/NMA being at least on the horizon by then. (Plus the China/Russia widebody)

Many here look at "competition" as being solely within size brackets, but that's not how the economics will actually work out. If smaller planes match a 2025 NEO's engine tech, the CASM edge for the A380 will be very slight. Airlines and passengers will increasingly tend toward fragmentation and bridge-hub bypass unless a compelling efficiency rationale points elsewhere - an efficiency rationale that a simple NEO will be unlikely to provide.

X10000. You hit the nail on the head. A380 isn't good in frame weight/pax either and nothing much can be done about it other than a massive strength making it been more niche. Better to focus on A350 platform and keep making intelligent investments in it as their future platform.
 
JayBCNLON
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 1:52 am

Quoting Aither (Reply 28):
I think there is a huge perception issue due to sales pattern : EK has ordered 80 A380s the last 6 years.
6 years ago was the beginning of the slowdown of orders by the other carriers.

Most of the A380s were expected to fly between Europe and Asia and this is exactly what is happening, except that one guy on this market ordered the whole batch - rather than having one carrier ordering 15 A380s every year... which would completely change the perception of this program.

Airbus would make a huge mistake stopping the program. Demand in Asia is still booming and there is a huge concentration of demand, both geographically and schedule wise. Hubs in the world were never as big as of today. Other airlines than EK will need the size.

I could not agree more: if EK hadn't picked up most of the orders, then a similar number of A380 would have been ordered by several other players.

The best times for the A380 are yet to come.
 
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speedbored
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 10:14 am

Quoting Matt6461 (Reply 33):
By 2025 the A380 will be a 20yo ...

Yes, because history is littered with examples of aircraft that simply failed to compete once they got to around that age:
A330 - 24 and still selling very well
A320 - 29 and the best selling aircraft on the market right now
777 - 32 and about to take the CASM lead according to Boeing
747 - 47 and still not quite dead
737 - 49 and people are currently talking about doing yet another variant of it.

But, yet again, some people seem to think that the A380 exists in a different reality from every other aircraft type.
 
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KPDX
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 1:55 pm

Quoting speedbored (Reply 36):
But, yet again, some people seem to think that the A380 exists in a different reality from every other aircraft type.

I'm admittedly far from an expert on these matters, but can we really compare a gargantuan aircraft like the A380 to all those other aircraft listed? And I'd very much say the 747 is dead. I love that aircraft, but there is not much of a future for it, and I'm not sure even the biggest Boeing fanboy would deny that. At least we have all of those freighter -400s and -8s to enjoy!

I hope the A380 does well. I get to enjoy the buzz of 4 rolls royce engines powering overhead to Sydney every night here in Dallas. Never ceases to impress! 
 
tortugamon
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 8:28 pm

Quoting Revelation (Reply 2):
I really wonder what the hurry is for IR. I understand that A380s can become available relatively quickly and they need capacity, but I'd think the safer play is to lease ex-EK frames or ex-MAS frames as they become available so they can walk away if they end up not being able to utilize them well.

I think we now know that order was mostly for PR purposes. I just read something from Iran's transportation minister saying that the A380 has no hope of being finalized/firmed before 2018 and it will take a number of years after that to deliver. Who knows it the A380 is even in production then.

Quoting KarelXWB (Reply 16):
Even the A330neo and 777X would never have been launched in today's environment

Interesting thought. Certainly more resistance but I think they would still have been launched. You can't escape the 777 replacement cycle that is coming up.

Quoting Revelation (Reply 21):
I think he's joking

I don't think he is joking at all. If you look back at the 50-unit order in DXB a few years back he was extremely vocal in advocating for the aircraft. I do think he thinks there is a risk of the program shutting down (as do I) and I think that there is no bigger threat to EK than not having access to an improved A380.

Quoting speedbored (Reply 31):
Why not? It's the same as the current 747-8 rate, and double what it will be from September, which seems to be perfectly acceptable to Boeing.

One program cost ~$5 B and has been unit profitable for quite some time and the other cost $25+ Billion and is only recently approaching unit break even. Quite different.

Quoting Matt6461 (Reply 33):
Many here look at "competition" as being solely within size brackets, but that's not how the economics will actually work out. If smaller planes match a 2025 NEO's engine tech, the CASM edge for the A380 will be very slight. Airlines and passengers will increasingly tend toward fragmentation and bridge-hub bypass unless a compelling efficiency rationale points elsewhere - an efficiency rationale that a simple NEO will be unlikely to provide

Well said. The A380 vs 777/A350 story did not play out well for the A380. I don't see why people think new engines are going to all of a sudden change that dynamic when these other, lower risk aircraft will be improved dramatically as well. It seems pretty darn clear.

tortugamon
 
kurtverbose
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 9:01 pm

Quoting Matt6461 (Reply 33):
By 2025 the A380 will be a 20yo airframe and the only mostly-metal true long-hauler produced (if it's still produced).
I don't get why folks think it will do so much better when it's older than it would in 2020.
This appears to discount the foreseeable improvements to the competition, such as 787/A350 re-engining and the possibility of MoM/NMA being at least on the horizon by then. (Plus the China/Russia widebody)

Many here look at "competition" as being solely within size brackets, but that's not how the economics will actually work out. If smaller planes match a 2025 NEO's engine tech, the CASM edge for the A380 will be very slight. Airlines and passengers will increasingly tend toward fragmentation and bridge-hub bypass unless a compelling efficiency rationale points elsewhere - an efficiency rationale that a simple NEO will be unlikely to provide.

Matt, as has been pointed out here time and again, airlines don't buy aircraft based on casm, they buy on profits, and there are times when a big aircraft, even with the same or slightly inferior casm will make more money. That's why BA would like more A380's, and by 2025 it's likely that more airlines will feel the same way.

It is a niche market, it will likely be a niche market for a long time. 787's, 777's and A330s/A350's will out sell it, but it's very possible that a business case can be made for an A380NEO in the future.
 
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speedbored
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 9:10 pm

Quoting tortugamon (Reply 38):
I just read something from Iran's transportation minister saying that the A380 has no hope of being finalized/firmed before 2018 and it will take a number of years after that to deliver.

Care to post a link?

Quoting tortugamon (Reply 38):
Who knows it the A380 is even in production then.

Airbus seem to think it will and they should know better than any of us.

Quoting tortugamon (Reply 38):
One program cost ~$5 B and has been unit profitable for quite some time and the other cost $25+ Billion and is only recently approaching unit break even. Quite different.

What has that got to do with the acceptability of future production rates? Those costs are all spent and paid for, hence irrelevant. All that matters is whether or not Airbus can maintain production at a level which benefits the company.
 
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Stitch
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 9:21 pm

Quoting tortugamon (Reply 38):
One program cost ~$5 B and has been unit profitable for quite some time and the other cost $25+ Billion and is only recently approaching unit break even. Quite different.

I don't believe the 747-8 has ever been unit profitable. Boeing's written down billions already and when they finally roll it up, they've said they'll need to write down even more because they're pretty much in a forward loss position on it without some serious orders.
 
XT6Wagon
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 9:25 pm

Quoting Stitch (Reply 41):
I don't believe the 747-8 has ever been unit profitable. Boeing's written down billions already and when they finally roll it up, they've said they'll need to write down even more because they're pretty much in a forward loss position on it without some serious orders.

yah, I doubt it ever hit a true break even on manufacturing costs. Planes going to the desert because of various issues does a hell of a number on "manufacturing" costs. Fewer frames paying for the same timeframe of fixed costs is unpleasant.
 
PhoenixVIP
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RE: IATA: A380 Stagnation

Sun Jun 05, 2016 10:02 pm

Quoting tortugamon (Reply 38):

Finally one comes out!

Of course the A380 will be stretched as well. 3-5-3 economy. We are looking at a 3 class 750+ seat hauler. With engines a generation newer than the 777X. That will be perfect and the 777 can't compete capacity wise. In 2025 the world will be so different. Iran will be operating the type from all news reports I have (or do we have links about this order being a stunt???????!!?!)

We are supposed to see this so call stagnation in all wide bodies. The replacement cycle for A330, 777 and A380 is not due until for another few years as the earliest ones go. That is when orders will pick up.

But of course our good friend tortugamon agrees that while the A380 is the worst aircraft built it has the best CASM and needs for EK to grow and configure well for the airline is very profitable so at least that is the main arguments to keep the line going with the current orders at a sustainable rate which is being done.
Inspire the truth.
 
tortugamon
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 2:59 am

Quoting kurtverbose (Reply 39):
Matt, as has been pointed out here time and again, airlines don't buy aircraft based on casm, they buy on profits, and there are times when a big aircraft, even with the same or slightly inferior casm will make more money. That's why BA would like more A380's, and by 2025 it's likely that more airlines will feel the same way.

BA has operated 50+ VLAs for decades. Now they going to be operating about a dozen even though traffic has increased.
I don't think they have reduced the number of VLAs in their fleet because they want to make less money.

Quoting speedbored (Reply 40):
Airbus seem to think it will and they should know better than any of us.

When speaking to the press I would be optimistic too. Unfortunately that optimism doesn't change the lack of orders and really just the basic math. Who wants an A380ceo after 2022 when 77Xs and A350s are readily available?

Quoting Stitch (Reply 41):
I don't believe the 747-8 has ever been unit profitable. Boeing's written down billions already and when they finally roll it up, they've said they'll need to write down even more because they're pretty much in a forward loss position on it without some serious orders.

Conner said they were making profit when they were at 1.5 and mentioned that they won't lose money even at 12/year. That was the last I read on that subject. Clearly the program will lose money in the end and I do expect additional losses.

tortugamon
 
PhoenixVIP
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 4:46 am

Quoting tortugamon (Reply 44):

EK and the A380 replacement cycle will take CEOs. With an add bonus if Airbus add winglets. Which is what Tim Clark has asked for.

Don't be afraid of fact~
Inspire the truth.
 
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Matt6461
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 6:11 am

Quoting kurtverbose (Reply 39):

Matt, as has been pointed out here time and again, airlines don't buy aircraft based on casm, they buy on profits,

What part of this:

Quoting Matt6461 (Reply 33):
the CASM edge for the A380 will be very slight.

Makes you think I believe airlines only look at CASM?
Even a "slight edge" means the A380neo would have the BEST CASM and should - if I believed as you suppose - be the automatic choice of every airline.

I don't believe that of course, as any sensible reading of my post and of everything I've written on a.net makes clear.

While simple ordinal CASM rankings aren't everything, it turns out that unit cost efficiency is - surprise! - highly relevant to the profit headline you rightly - duh - emphasize. (As an aside - people love to throw their credentials around here. It's statistically highly unlikely that your economics degree is better than mine. So can we forego the 7th grade economics lessons? Profit matters, we all agree. Thanks Maynard K)

Let's give CASM/efficiency its due: no widebody has ever sold well when smaller options with equal or better efficiency has had broad availability. None.

A bigger plane has to be more efficient; a much bigger plane has to be much more efficient.*

*unless you're seeking world domination from two runways. Then your slot constraint problem gives a different efficiency/capacity profit maximization curve.

Quoting speedbored (Reply 36):

Yes, because history is littered with examples of aircraft that simply failed to compete once they got to around that age:

Your championship belt in the strawman division remains secure. Nobody said "airliner programs are like the family cat: they're dead by 20."

Somebody did imply that the A380’s airframe - a compromised, suboptimal, older tech beast - probably won't deliver sufficient economies of scale at 2025 engine parity to motivate sufficient sales to recover a NEO investment.

Even when the frame and engines were newer than the competition, it still lost to the 77W.

In 2025, the competitive picture for a NEO looks worse than for the CEO in 2007.

[Edited 2016-06-05 23:32:21]
 
kurtverbose
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 8:00 am

Quoting tortugamon (Reply 44):
BA has operated 50+ VLAs for decades. Now they going to be operating about a dozen even though traffic has increased.
I don't think they have reduced the number of VLAs in their fleet because they want to make less money.

They bought VLAs (747's) for the range, and when the 777 came along they stopped buying 747's, so I do agree with you that in this sense the VLA's weren't competitive. But then you look at the LHR - LAX route and you see how much more money BA generates by flying two A380's vs 3 747's.

It is a niche market, and while it's likely to remain a niche, the niche will get bigger (though probably not in relative terms) as the market grows.

Quoting Matt6461 (Reply 46):
As an aside - people love to throw their credentials around here. It's statistically highly unlikely that your economics degree is better than mine. So can we forego the 7th grade economics lessons?

I'm not sure I've mentioned before I have an economics degree - maybe I have. If I have it's strange that you should remember? I don't think I've ever mentioned it to be-little your contribution in the way you have just tried to do. In any case statistics may say one thing, the reality may be very different. I'm not really interested in comparing what ever degrees you choose to make up.

Quoting Matt6461 (Reply 46):
I don't believe that of course, as any sensible reading of my post and of everything I've written on a.net makes clear.

I don't think any sensible reading of my post warrents your original response or the above.
 
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KarelXWB
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 8:17 am

Quoting Revelation (Reply 24):
No, it means there is a lack of it, not a total absence of it.

Then clearly I have a different definition of "stagnation".

Quoting tortugamon (Reply 38):
Certainly more resistance but I think they would still have been launched. You can't escape the 777 replacement cycle that is coming up.

Eventually, sure. Not today.
What we leave behind is not as important as how we've lived.
 
PhoenixVIP
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 8:22 am

Quoting Matt6461 (Reply 46):

I respect your thoughts but a NEO in 2025 will be very thoughtful on basis that growth rises exponentially. 2007 yes the world economy was strong and there were many 747s operating but we assume that carriers like Big 3 in China will not grow past current demand. Beijing is getting a new airport but that doesn't mean it solves the main problem of airspace and slots to Europe and America.

But we will never know what happens 9 years from today. World order can change and maybe Airbus will have gone altogether by then. We should be realistic and look closer to now.
Inspire the truth.
 
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Matt6461
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RE: IATA: A380 Stagnation

Mon Jun 06, 2016 8:28 am

Quoting kurtverbose (Reply 47):

I don't think any sensible reading of my post warrents your original response or the above

I write stridently but I don't think I wrote anything directly insulting (well maybe that my degree is likely "better" than yours but that's just school pride and it's largely jest).

I find it insulting to be told that profit matters merely because one mentions a component of profitability analysis (unit costs) without saying profit. Anybody who can operate a computer is smart enough to know it's all about the bottom line. Econ degree or no.

And in fact your rejoinder to Tortugamon relates to unit costs primarily, something for which I do not fault but which is susceptible a school-marmish reminder about the bottom line:

Quoting kurtverbose (Reply 47):
look at the LHR - LAX route and you see how much more money BA generates by flying two A380's vs 3 747's

Subbing 2 a380's for 3 744's is basically capacity-neutral. So any additional "money/profit generated" comes precisely from the A380's CASM edge over the 744.

Now the CASM edge isn't the whole story behind the decision of course, as surely at least *some* passengers preferred 3 daily flights instead of 2. But BA did the math and finds the whale more profitable even at lower frequencies.

LAX-LHR is, btw, one of the 10 thickest long haul routes in the world. Probably top 5 for O&D.
If that's a 3x daily a380 route in 2025, and if the other top ten have the same service level, those routes would employ ~60 a380's.
...which is just to say that this niche may never be big enough to utiluze the 300+ frames needed to close an a380neo business case.

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