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Analysis: Airbus Plans A380plus Upgrade Program

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Analysis: Airbus Plans A380plus Upgrade Program

Analysis: Airbus Plans A380plus Upgrade Program
June 18
14:44 2017

PARIS – Airbus announced plans for a major upgrade Monday morning to its A380 superjumbo at the 2017 Paris Air Show (PAS), confirming the study of the so-called A380plus.

The enhancements to the A380 would include aerodynamic improvements including larger, 4.7 meter high winglets and other wing refinements. Along with maintenance program optimizations and an expanded cabin shown earlier this year, Airbus projects that the A380plus could deliver as much as a 13% seat-mile cost reduction against today’s A380 airframes.

“The A380plus is an efficient way to offer even better economics and improved operational performance at the same time,” said John Leahy, Airbus’ COO, Customers. He added that “It (the A380plus) is a new step for our iconic aircraft to best serve worldwide fast-growing traffic and the evolving needs of the A380 customers. The A380 is well-proven as the solution to increasing congestion at large airports, and in offering a unique, passenger-preferred experience.”

Photo: Airbus

Photo: Airbus

Per design studies, the new winglets would consist of a 3.5-meter uplet (jutting out above the wing), and a 1.2-meter downlet (jutting below the wing). Per Airbus’ figures, these would yield a 4% savings in fuel burn which enable 80 extra passengers or 300 extra nautical miles (nm) of range.

The optimized cabin layout, with redesigned stairs, a combined crew-rest-compartment, and the removal of sidewall storage allows for 80 additional seats assuming 9-abreast premium economy and 11-abreast economy.

The A380plus would also feature maintenance program improvements (longer check intervals and reduced downtime) that would increase aircraft availability (reducing the effective acquisition cost of the superjumbo).

A380plus doesn’t solve the superjumbo’s fundamental issue


The enhancements from Airbus to the A380 are great – cementing the A380 as the lowest seat-mile cost aircraft on the planet when configured densely at current fuel prices. The extra 300nm of range are useful, as they would allow (for example Singapore Airlines) to potentially fly nonstop from Singapore to Los Angeles and San Francisco at a later date.

Improved operating economics are always a benefit, particularly for the Middle Eastern customers that have lost their cost edge in the wake of lower fuel prices. In the right set of market conditions, the extra seating would be a boon for Emirates, which could use it to drive even more volume through its Dubai mega hub.

Photo: Airbus

Photo: Airbus

But the reality is that the A380’s problem is not and has never been seat mile economics or capacity. Instead, it is an aircraft that is already too big and thus has a limited year-round mission.

As an example, neutral observers often ask why US airlines don’t operate the A380, looking at the cases of multiple daily flights from San Francisco to Tokyo on United or from New York JFK to London Heathrow on American. And it is true that in the summer months, the US airlines could probably fill an A380 or two on each of those routes.

The problem would come in the winter months – the market between the United States and Australia/Africa/Latin America is nowhere near the size of the US-Europe market and the latter two are nowhere near as concentrated as US-Asia.

So an A380 that was full and profitable in the summer months would be a half-empty money pit regardless of the destination in the winter months. The fundamental problem for the A380 is that you can’t fill 500+ seats profitably year-round in enough markets.

Of the theoretical customers who might want to buy the superjumbo, only Cathay Pacific and Turkish Airlines stand out as being realistic. Neither carrier is looking to grow its long-haul fleet.

A380plus will be useful in shoring up backlog risk


Where the A380plus does have a role to play is in ensuring that the existing backlog of A380 orders is protected. We have previously judged a substantial portion of the A380 backlog as at risk, and one way of staving that off is by convincing existing customers to keep their purchases of the A380 in place.

In particular, Emirates has constantly been asking for more payload (the A380plus increases the A380’s maximum take-off weight [MTOW] from 575 tons to 578 tons) and range (the extra 300nm) on the A380, whether through upgrades or a plane with the new engine. The A380plus reduces our perceived risk that Emirates will defer some or all of its backlog of 47 A380s.

Singapore Airlines might end up taking on options for more jets given the extended range (ditto for British Airways), and Qantas could be induced into taking at least a couple of its additional eight superjumbos on order.

The A380plus will be less useful for lessor Amedeo, which faces the same problems Airbus does in selling the A380 to new customers. Even so, the A380plus upgrade could help preserve 10-15 orders, which sounds trivial but isn’t in the context of an aircraft with a backlog of just 104 orders.

Rumors abound that Airbus will cut A380 production further to one or even less than one aircraft per month, allowing for Airbus to stretch out A380 production for years. There is no clear milestone that Airbus is targeting like Boeing was with the 747-8. And sustaining a production rate below one aircraft per month will be difficult for a jet that barely broke even at 27 deliveries in 2015 (2.25/month).

But if Airbus can do it, along with the A380plus, it could give the European giant enough time to realize its thesis of Asian economic growth and ATC constraints creating a fertile environment for the A380.

If that thesis were to come to fruition (we still view it as unlikely – and believe that the Asian market will instead fragment as regional population centers grow) and the Middle East Big 3 of Emirates, Etihad, and Qatar Airways shake off their recent economic and geopolitical doldrums to resume growth, then there may yet be a case for a re-engined A380neo in the mid-2020s.

But a lot has to go right between now and then to enable that outcome. The A380plus is a step in the right direction, but it is not a game changer for Airbus’ troubled superjumbo.

Note: Airways will be live from the 2017 International Paris Air Show this week. Be sure to visit AirwaysMag.com and like our social media pages for the latest information from the show!

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About Author

Vinay Bhaskara

Vinay Bhaskara

Senior Business Analyst, Big Airline Enthusiast, Avid Airport Connoisseur, Frequent Flyer, Globetrotter. I Miss Northwest Airlines Every Day. vinay@airwaysmag.com @TheABVinay

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