Airbus turbulence Still Up in the Air

Airbus has just renewed its commitment to its A380 superjumbo despite low sales, customer demands for new engines and the company's own production concerns.
Airbus is hoping A380 sales will climb steeply.

Airbus, it seems, has but one choice when it comes to its struggling A380 superjumbo: Full-throttle production.

“The best time for the A380 is yet to come,” says the head of Airbus, Fabrice Brégier. “The airplane continues to be an essential member of our family of large aircraft.”

In the future, he adds, the plane could be fitted with new engines, or produced with an even longer body. But right now, the challenge is to win new customers with the current version.

There has been much speculation about the future of the world's largest airliner, which can seat more than 500 people but has suffered turbulent sales since its introduction in 2006. Airbus has itself to blame for much of it.

In mid-December, the European company made the shocking announcement at an investors’ conference that if sales remained low, it would have to decide by 2018 whether to cancel production. The company’s share price fell 20 percent at the news.

Last year, Airbus had total orders of 1,456 across its range of several passenger aircraft, but only 13 were for the double-decker A380.

To date, 152 of the huge planes have been delivered and 165 are in the works. But there are gaping holes in the geographical distribution of sales. So far, none have been sold in the United States, South America, Africa or India. In China, the only customer is China Southern Airlines. Sales are not nearly high enough for an airplane that was supposed to revolutionize aviation through its sheer size.

Emirates, the A380’s major customer with 140 orders, has presented a new problem. The Dubai airline has said it won’t order any more A380s unless Airbus revamps the double-deckers with new, fuel-efficient engines.

Airbus must prove that predicted airline growth necessitates the use of superjumbos.

With its current four huge turbines – which can take the 560-ton plane to 39,000 feet in 15 minutes – the A380 is simply too expensive for airlines to fly. But new versions would cost both Airbus and engine-manufacturer Rolls Royce billions. So company bosses want to postpone a decision as long as possible.

However, Airbus has already shown that this sort of maneuver can pay off. Instead of replacing the smaller, mid-range A320 with a new model, the type is being kitted out with new, more efficient engines and simply being rebranded as the A320neo.

Video: Kitting out an Airbus A380.

Delivery of the new version is scheduled for the end of this year but Airbus has still racked up more than 3,600 orders for it. As a result, the A330, Airbus's long-range workhorse, is also slated for a neo makeover.

This is of great benefit to Airbus because as a rule, new engines cost a tenth of the amount required to develop an entirely new aircraft.

The upgrade is also attractive for airlines. Instead of waiting for years for risky new developments, such as with Boeing’s Dreamliner or Airbus' A350, they can receive the renovated models quickly, and achieve fuel savings of 15 percent.

It is a question yet to be answered whether this strategy will also work for the A380. Airbus emphasizes that worldwide air traffic will double in the next 15 years, but it must prove in 2015 that this growth necessitates the use of superjumbos such as the A380.

 

Markus Fasse covers the aviation and automotive industries for Handelsblatt. To contact the author: [email protected]