MIAMI — Jumbo and superjumbo jets have captivated people for decades; there is just something magnificent about watching a four-engine aircraft roll down the runway and take to the skies or climbing up the stairs to the upper-deck on an airplane.

Unfortunately, the economics of these aircraft are becoming a tough sell for the manufacturers, partly due to the dwindling economic performance. The days that the Airbus A380 and Boeing 747 are in production could become numbered soon.

The last year was a rough one for the A380 program; it faced several order cancellations and deferrals, and Airbus announced that production will decrease in 2018. Although, Airbus did receive its first order from its first Japanese aircraft.

On the other hand, 2016 was a better year for the 747-8 program. Nine aircraft were delivered, and Boeing received orders for 18 747s, including 14 from UPS.

Airbus A380 Program

Back when Airbus launched the A380 program, the manufacturer believed that its superjumbo jet would become hugely popular as airlines would be able to move people in masses, but as Bloomberg points out, “to most airlines, the double-decker remains an exotic addition at best, rather than the backbone of a long-distance fleet.”

The A380 truly allows airlines to do exotic things like the Etihad A380 Residence or installing a shower for first class customers to use at 40,000 feet.

Now it is not all glitz and glam for Airbus’ largest A380 customer, Emirates, the A380 has become a backbone of its fleet as the airline has expanded aggressively since taking delivery of its first A380 back in 2008; the airline is set to eventually have a fleet of 142 with 92 already delivered.

Singapore was the launch customer, and it is the second largest customer for the A380; it will have a mere 24 once all are delivered. Singapore announced it would be returning its first A380, 9V-SKA, back to its lessor in October 2017.

Some airlines jumped on the bandwagon of becoming an owner of the world’s largest commercial aircraft back when the program was launched, but it did not gain as much momentum as Airbus was expecting. The economics for most airlines to operate a four-engine jetliner are just are not strong enough in this day and age. Airbus even planned to offer a freighter version, but with only 27 ordered, plans for it were cancelled.

Airbus received an order for three aircraft from ANA at the beginning of 2016; although a small order, it was a significant one as ANA will become the first Japanese carrier to fly the A380 in 2019.

After this order was announced, 2016 became quite rough for the A380 though.

In March, Air France dropped the remaining 2 aircraft of the 12 that it had on order. opting instead for the A350-900XWB. During Farnborough, no orders were placed for the A380, but it is rumored that with Virgin Atlantic ordering the A350-1000, it is likely their A380 order will be cancelled as well. In August, Qantas announced that it would not take delivery of the remaining eight that were left to deliver of the original order for 20.

With the order books having been relatively quiet for quite some time, Forbes put the A380 program on “death watch” back in June of last year. The program achieved unit cost break even for the first time in 2016. Production has just been hovering at about 28 A380s for the last few A380s, and it is estimated to go down to around 20 for 2017.

In 2018, production is set to decrease to just one per month (12 per year). Airbus has admitted the program will likely revert financially back to the red as production rates decrease.

Just last month, the largest A380 customer, Emirates, announced that it would defer delivery of six A380s from this year to 2018 and push back six from 2018 to 2019.

To date, Airbus has received a total of 319 firm orders and made 207 deliveries; this makes an order backlog of 112. However,when one includes the Air France-KLM and Qantas cancellations, only 102 are left to be delivered.

The 102 outstanding orders that are left are:
  • Air Accord—3
  • All Nippon Airways—3
  • Amedeo—20
  • Emirates—50
  • Etihad—2
  • Qatar Airways—3
  • Singapore Airlines—5
  • Undisclosed—10
  • Virgin Atlantic—6

If Virgin Atlantic does in fact cancel its A380 order like many expect, the number of outstanding orders drops below 100 to 96. In the mean time, many will be watching the Amedeo order as well; they have yet to find any potential customers to lease one of the 20 they have on order. If their luck continues, the number of outstanding orders could drop down even further to 76.

At one point, there was talk of a A380neo (new engine option) program, and Emirates was very much interested in it. However, that seems to have been put on the back burner, and it is quite possible it may never come into fruition.

There may just be a maximum of six years of production for the A380 left, but Airbus could pull the plug at any time. If the manufacturer continues to lose money on the new aircraft, it would not make economical sense to continue the program. However, time will tell.

Boeing 747 Program

It is no secret that the program has long been a challenge for Boeing. Since starting production in August 2008 with only one customer for the aircraft, Boeing’s critics have had their doubts on the success of the 747-8 program. When the first flight was pushed back by a few months, then-Boeing Chief Executive, Jim McNerney, began publicly questioning the success and future of the 747-8 program.

Over time, Boeing was able to prove to its critics that the 747-8 could be a success as it marched through flight-testing and secured orders, although at the time of the first delivery in October 2011, the number of orders was not exactly the strongest, with only 111 firm orders in the books.

2015 was an especially difficult year for the 747-8 program in particular. Transaero folded which meant that it would not take delivery of the four it had on order and Nippon Cargo cancelled four of its order for 14. Plus, it was announced that the production rate would be cut down to half per month in September of that year. Although, Boeing did surpass the 100 delivery mark of the 747-8 in 2015.

In July 2016, Boeing announced that it might have to end production of the 747 due to losses it could receive if no changes were made to the order book. Boeing was also targeting to increase 747 production in 2019 to one aircraft per month, but it announced that it would stick with six per year which it started in September 2016. However, Boeing received an order from UPS for 14 of the freighter version which helped bring some life back to the program.
Boeing has received a combined total of 138 orders for the 747-8; 50 of those were for the passenger version and 88 for the freighter version. 110 have been delivered as of December 31, 2016 which leaves 28 unfilled orders. However, when you subtract the Transaero order (which is still on the books) and add the two on order to replace Air Force One, 26 orders are outstanding.
As of December 31, 2016, the 26 outstanding orders left are:
  • AirBridge Cargo—2 freighter variants
  • Arik Air—2 passenger variants (First one is expected later this year)
  • Korean Air—3 passenger variants
  • Nippon Cargo—2 freighter variants
  • Silk Way Airlines—1 freighter variant
  • UPS—14 freighter variants (first two are in final assembly)
  • Two for Air Force One Replacement

If Boeing sticks to its plan of six aircraft per year, there may only be about four more years left of 747 production. It seems highly unlikely Boeing will receive any more orders for the passenger 747-8 Intercontinental passenger variant.  Both Cathay Pacific and Air France retired their passenger 747 fleets last year.

Delta and United are both retiring their 747 fleets by the end of this year; although several other passenger airlines most notably British Airways and Qantas will still be flying their 747s through at least the end of the decade.

It would seem that Boeing’s only hope for more orders is by there being an uptick in air cargo traffic and and a need for more aircraft by them to keep adding to the order books. Boeing executives have still continued to say that they believe there is still more potential in the air cargo market.
Will 2017 bring more 747 orders? We will just have to wait and see.