MIAMI – The Airbus A380 officially turned ten yesterday. The large European double-decker jet initially entered service on October 25, 2007, with Singapore Airlines.

This is the second of a two-part analysis of the A380 at ten. The first part of this analysis took a look at the failed market thesis behind the A380, while this installment assesses the current A380 order book and explores the type’s prospects.

Read More: Analysis: A Decade of A380, Success or Failure? – Part I

Taking a look at the A380’s backlog

The 101-strong A380 backlog is not in good shape, despite rumors floating around about more orders from Emirates and Turkish Airlines. Lessor Amedeo has not found customers for its 20 A380s on order (that may be where the Emirates rumors are coming from).

We view Emirates as likely to defer some of the 44 outstanding A380s it has on order. We do not think Qantas will take delivery of its eight remaining A380s, and ditto for Virgin Atlantic and its six A380s on order.

Finally, the unidentified customer(s) with 10 A380s on order does not exactly inspire confidence. In all we see deferral risk of 60-70 frames and cancellation risk of 30-40 frames on the existing backlog.

Meanwhile, potential new customers (or top-up orders) for the current generation A380 (even after the A380plus upgrade) are hard to identify.

Emirates is not the same unstoppable freight train that it once was (with traffic growth slowing over the past couple of years), and in many key markets like China, India, and Germany it now lacks the bilateral rights to fly in more A380s.

Turkish Airlines is theoretically a possibility but appears to be focused on the 787-9 and A350 as the future of its long-haul fleet as a hedge against volatility.

Amongst existing customers, one could see ANA finding success with the type on its portfolio of Tokyo-Haneda routes and ordering more than its current three. And British Airways will likely buy more A380s at some point.

Outside of the carriers mentioned above, there just isn’t really a market for the current generation A380. Pretty much every other carrier with a hub network large enough to support an A380 has ordered either the Boeing 777X or the Airbus A350-1000.

What comes next

The future of the very large aircraft (VLA) market that was invented by the original 747 and that now encompasses the A380 is very much up in the air. Boeing’s 747-8i is on its last legs as a passenger jet (though with the passenger 767 potentially coming back to life, I suppose anything is possible. Enter the 777X).

The 777X, specifically the larger 777-9X variant, is the true nail in the coffin for the A380ceo. It offers similar performance (the A380 can fly slightly further) to the A380.

777X in flight; air to air; view from left side of plane; over clouds; daylight; K66659

More importantly, it more or less matches the A380’s unit costs while seating ~100-150 fewer passengers at a smaller overall trip cost.

If you can fill your 777X profitably in the summer, you can still break even on it in the winter. You just cannot say that today about the A380.

At this point, the equation for the A380 is simple: it must be re-engined, or the program will die out.

The rumors of an A380neo have persisted for years and years, but the anemic sales of the A380ceo and Tim Clark’s relative lack of enthusiasm for the type have held Airbus back from launching the multi-billion dollar development program required.

The A380neo’s sales prospects under current conditions are underwhelming. Beyond 150-200 replacement orders for the currently in service jets, the bet would essentially be that the double whammy of infrastructure constraints (particularly ATC) and economic growth in India and China would power the rise of the A380.

India and China will not save the A380

But the problem with the Indian and Chinese markets for the A380 is much the same as it is in the US. The large domestic markets in those countries allow multiple airlines to build up competing hubs quickly.

This, in turn, fragments the feeder flights that would allow an airline to fill an A380 on a route like New York to Zurich.

If New York JFK was the primary hub in the US and was dominated by only one airline, then there’s a credible argument to be made that that route would work. But with two different long-haul carriers hubbed at New York JFK alone and something like 15-20 transoceanic hubs in the country, the A380 doesn’t have a hub that can make it work.


Image Courtesy of Airbus


The same would be true in China where the market is heavily fragmented across a variety of spread out hubs and in India where there is heavy competition from multiple airlines and multiple hubs.

So with the India and China theses out, it is no surprise that Airbus is dragging its feet on deciding the future of the A380.

At current production rates, the type has several more years of production, so Airbus does have a bit of a buffer. But it’s unclear if Airbus would be able to fill any sort of production gap on the A380 program with the A380ceos, and that may accelerate the yes/no decision. In all likelihood, we believe that decision will be a no.

The A380 program is one of the most fascinating business case studies of the past 20 years in any industry. It was one of the most prestigious and technologically spectacular aviation projects ever undertaken. But ultimately it was a commercial failure and a heavy loss maker for Airbus. At least the 787, while a loss-making program for Boeing at the moment, was a runaway commercial hit.