The logical next step for the A380

Eleanor Steed
By Eleanor Steed September 4, 2017 16:17

The logical next step for the A380

Hi Fly has taken on two second-hand A380s, confirmed chief executive Chef Paulo Mirpuri last week in an interview with aeroTELEGRAPH. Mirpuri confirmed that the wet leasing specialist was seeking Hajj work for the ex-Dr Peters A380, among other uses (see Europe Technology News below). This has long been touted as an ideal use for the A380, and during the Hajj period the aircraft will do well but only if it has been “acquired” for the duration by the operator at a very low cost. So, what about the rest of the year? Hi Fly made the A340 work for it and Mirpuri is confident that the A380 will find use as a charter carrier between Europe and Orlando or Europe and Miami for cruise liner connections, or for myriad other situations. For an aircraft of less than a decade old, which had a high initial purchase cost (at list price at least), this seems like a sorry end to its story.

When Airbus broke the bank to launch the A380 we were scathing about the economics of the entire programme, saying it would never break even, but as a passenger I love the aircraft, which mainly is due to the variety of interior layout options it has given airlines. The A380, like any aircraft, will work wonders for the right airline brand serving the right routes and the right frequencies. And, so long as the airline flying it is willing to follow the Lufthansa model and operate the aircraft for its full useful life, it will show a very impressive economic life. We could of course say the same about any aircraft type, but the point is that some aircraft are designed with a second life from the outset – they are designed to be traded with ease. This was never the intention for the A380. Airlines purchasing the aircraft will have known full well that they needed to adjust their model from time to time to keep the A380s in their fleet viable. That in turn means that the A380 was never an aircraft to gamble on and it is not an aircraft type that can fit within a lease model, unless that model is arranged on the basis where the required margins are achieved prior to the end of the first lease. Those not getting the sums to add-up on this basis are for sure in for a headache. But if you consider that airlines owning the A380 today plan to operate them as long as possible (excluding MAS from all thinking as that case is truly exceptional) and consider that production of the type is on the floor, the rational conclusion is that the first few A380s to be parted out will make for good investments – so long as they have EA engines on wing.

In a world where more people are moving back to direct point-to-point travel, the A380 should do well, but airlines still shudder at the thought of the sales required on one flight to break even compared to the 777 and yet the per-seat economics for the A380 remain the best of the large aircraft types by far. It is perplexing, the A380 remains a high risk- high reward aircraft type. It required high roller flag carrier airlines to come forward, which most did save for the US carriers, but in the same decade each was laid low by one event or another. So has the aircraft run its course? The answer lies squarely with the decisions made by the successors to Sir Tim Clark and James Hogan. It is not ideal, but it is true.

Eleanor Steed
By Eleanor Steed September 4, 2017 16:17