Seat wars hot-up as Airbus makes the 11 abreast call on the A380 and lessors try to get on the global IPO rally

Dino D'Amore
By Dino D'Amore March 28, 2014 20:32

Seat wars hot-up as Airbus makes the 11 abreast call on the A380 and lessors try to get on the global IPO rally

As reported on March 20 as a possibility, 11 abreast A380 seating at 18inch per seat is due to be announced by Airbus in the coming days. So where does that leave the seat economics of the 777X 787-9 etc? The full answer is in Airline Economics issue 19.
Airbus will announce the move to 11 abreast on the A380-800 whilst keeping the 18” seat at the Aircraft Interiors Expo next month (8-10 April 2014, Hamburg).

From the consumer war perspective there is much to play for and this story ties-in with quite a few others at this time. Airbus is positioning itself and its customers to be on the upside of the comfort argument. We have seen in all areas of the globe a trend towards comfort being a growing factor among consumer decision making and this has been caused primarily by the unbundling of fees by airlines. Essentially you can match your fare to your budget through various savings on board, this leaves the only thing that cannot be changed on the basic ticket price (so not upgrading) being the size of the seat and the pitch and that makes the issue a hot one for attracting passengers and one that A380 owners can flaunt against other aircraft competing on the same routes. All the US majors increased their pitch on aircraft some time ago and European majors have followed.

Another fun fact, let us face it as it is a Friday, is that you and I are fat, yes, according to the UN fat is the new norm, especially so in the West, but APAC is right behind us and gaining ground. The average middle aged western man is now 5ft9 tall and weighs in at 13st3lb (have fun converting that) and the average lady comes in at 5ft4 tall and 11st. Now as you all consider pulling up that BMI website page once again let me save you the bother and confirm that those ratios are indeed not too good. Now I blame this on the fact that that the working population is left to worry about caring for the baby boomer parents and the children at the same time both in population brackets that far exceed the current 21-60 working age group by a combined ratio of over six to one. This leaves us all chained to desks 24/7 to make-up any shortfall in GDP, thus we are getting somewhat saggy.

Airlines is in a position to flaunt the 18” seat over the coming decades to great effect and now they can do it with improved economics as standard making the A380 a better investment now than it has been in the past.

“Exclusive” news in the past 24 hours is that Avolon is seeking an IPO will come as a bit of fun and no shock to readers of this service given that we said this was the case back in 2013 and reiterated the attempts to get the IPO rolling again not seven weeks ago. Indeed many expect both Avolon and AWAS to seek an IPO this year since stock valuations are climbing once again, with aircraft leasing stock enjoying 1.3 times book value at this moment in time. With the industry continuing along its consolidation path, launching an IPO would enable these companies to use stock as currency for purchasing rival leasing companies, much in the same vein as AerCap has done with its purchase of ILFC.

Read more about the advantages and disadvantages of aircraft lessors going public in the forthcoming (March/April) Issue 19 ofAirline Economics.

Dino D'Amore
By Dino D'Amore March 28, 2014 20:32
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