Airbus Cancels The Airbus A380 program
Airbus Cancels The Airbus A380 program
Once the pride of the European aviation industry, Airbus is canceling the Super Jumbo program. Citing the lack of orders and the largest operator of the A380 reducing their backlog, Airbus had no other choice. The program was just not sustainable anymore. Effective 2021, Airbus won't produce any more Airbus A380.
The Airbus A380 program shocked everyone in 2000 when the European conglomerate announced the launch of the A3XX. After Airbus first tested the aircraft in 2005, the company launched the Super Jumbo in 2007 with Singapore Airlines (SIA1) (SINGY) . Airbus experienced a tough rollercoaster ride. From initial delays, rising development costs and structural issues to an ever increasing number of orders and then the eventual fall of them.
The Airbus A380 has brought one wild ride for everyone involved, including passengers and airports. But the mark it left on aviation will never be forgotten. People will definitely remember the A380 as one of the greatest engineering feats that the world has seen.
Nevertheless, there is a question on everybody’s mind: why did this happen?
The signs were there
Established almost 50 years ago, Airbus has always had tough competition. Gradually, the corporation increased its portfolio of aircraft. It ranged from small narrow-body jets such as the A320 to Airbus' first ever aircraft, the A300.
However, it never had the one thing that Boeing had. A large jet like the Boeing 747, which the American aircraft manufacturer revealed 50 years ago. Airbus knew that they needed to come up with a direct competitor, as more and more passengers traveled around the world via air. So, the company decided to draw the plans for a new jet to directly compete with the Queen of the Skies.
Interestingly enough, Boeing was also interested in developing a larger successor to the 747. Later on, they dropped this thought, as they did not think it would be a profitable program. That was the first hint that maybe building such a large jet was not such a great idea.
Airbus was having none of it. In the late 2000s, the company officially announced the Airbus A380. Initially, Airbus predicted a 9.5 billion euro development cost and the investments returning in 2010. That is if Airbus would deliver 250 A380s by that time. In another 10 years, Airbus hoped that the Super Jumbo would make a profit of 40 billion euros.
Six launch customers approached the Airbus A380 program with 50 confirmed orders. Airlines were hopeful as well.
Airbus stated that the A380 would enter service in 2005. Unfortunately, that wouldn’t happen until 2007.
To start off, Airbus told airlines in 2005 that the Super Jumbo would be delayed by 6 months initially. Wiring issues caused the delays, as various facilities in Europe were using different software. Because of the wiring material and the complex design plans, this caused a huge issue.
This is where the complexity of Airbus’ manufacturing process came in. With different plants in multiple countries, sometimes factors such as national pride can come into play. According to a 2006 article in the New York Times, Tom Williams who at the time was the chief of aircraft programs at Airbus said this:
"It was partly a question of national pride. The German engineers sort of felt that there was a French solution being imposed on them. But the fact was there was a tool being used in Hamburg that was behind the times."
Usually, when building an aircraft, delays are imminent. However, when you’re building such a humongous aircraft as the Airbus A380, one delay will cause a domino effect. Delays in 2005 forced Airbus to reduce the number of delivery numbers in 2009!
To illustrate, Airbus said that at full-scale production, which would start in 2010, the company would build 45 aircraft per year. Airbus never reached that goal.
The best results were in 2012 and 2014 when the company delivered 30 Airbus A380 aircraft each year.
And the issues did not stop there.
Not Winging It
On Qantas Flight 32 from London to Sydney, the Airbus A380 carrying 469 passengers on board suffered an engine failure. These things do happen and the aircraft landed safely. Nobody was hurt. Upon inspection, a turbine disc in the Rolls-Royce Trent 900 engine blew up, because of a faulty stub oil pipe.
Airbus initiated engine replacements and inspections on other Airbus A380s with Rolls-Royce engines. Qantas, Singapore Airlines (SIA1) (SINGY) and Lufthansa (LHAB) (LHA) grounded their Super Jumbos for the time being. It seemed like the company sorted the problem out and the Airbus A380 was ready to fly again.
The European Aviation Safety Agency discovered cracks in the fittings in the Super Jumbo‘s wings. In 2012, some 20 Airbus A380 jets were affected by the issue. As a result, Airbus would need to replace the fittings so that EASA would allow the A380 to fly again.
Now, again, these things happen. However, Airbus had to pay for the repairs out of their own pocket. That amount resulted in a loss of 105 million euro. Furthermore, Airbus had to switch up production yet again.
At the core of it, these problems might not be the biggest. The fact of the matter is, the Airbus A380 consumes a lot more fuel than other aircraft. There is a reason why airlines nowadays have canceled A380 orders to switch to the more efficient Airbus A350 and Boeing 777 or Boeing 787. That reason is that it has 2 engines less than the A380, thus consuming less fuel. Consequently, reducing operating costs.
Secondly, not everyone can accommodate the behemoth of an aircraft. Airports need to invest in their infrastructure to provide passengers with a comfortable boarding process, as the double-decker has a one-of-a-kind requirement of a separate jetway. The Airbus A380 also requires special service vehicles and pushback tractors. That is why airports that wanted to welcome the Super Jumbo had to heavily invest in their infrastructure and not every airport had the wish or the demand to do so.
Thirdly, the margin of profit of the Super Jumbo is very tight. Thus, if airlines want to run it at a profit, they have to pick the routes very carefully. This is where the first reason comes in – the A380 is just not efficient enough with rising fuel prices.
As a reminder, a lot of airlines are already suffering from rising fuel prices, thus going bankrupt.
Losses and the end of the Airbus A380
Overall, these issues amounted in huge losses for Airbus. The manufacturer estimated in 2005 that it needed 270 aircraft to not lose money on the project. A year later, with the wiring and production problems, that estimate rose to 420.
In 2012, Airbus finally admitted that the program is never going to be profitable. According to the New York Times, the manufacturer spent over $25 billion in developing the Airbus A380. Initial studies predicted that airlines would have a demand of 1200 A380s in 20 years from 2005. As of now, Airbus has 313 orders secured, with 234 deliveries. At the end of its production cycle, experts have estimated the final production number to be at 251.
And no more orders are going to be accepted. Emirates reduced their order of the A380s by 39 aircraft and Airbus will end the production of the A380 in 2021. Airbus cited this reason why the program is not sustainable anymore, as no more airlines placed orders. They will deliver the final Super Jumbo to Emirates. When production ends, the manufacturer will still maintain and support existing A380s.
As of January of 2019, 14 different airlines operate 234 Super Jumbos. Biggest one of them is of course, Emirates.
Impact to Airbus
As for Airbus, I’m sure they will be fine. Airbus aims to deliver around 890 aircraft in 2019, compared to the 800 aircraft they delivered in 2018. Furthermore, the conglomerate secured 747 more orders for new aircraft, which totals to 7577 aircraft orders on its books.
The worst part is, that over 3000 workers might feel the impact of the cancelation of the program. However, Airbus promises that with the A320 production numbers going up and new wide-body orders, the workers will have a chance to switch their positions.
Whatever it might be, it is quite sad to hear the news that no more Super Jumbos will be produced after 2 years. The Airbus A380 showed off the power of European engineer and what can be achieved when multiple countries come together to build one of the most technologically advanced aircraft ever. Its ingenuity, unparalleled luxury and enormous size will be missed by all of us.
What do you make of the news?
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