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My understanding is that Airbus assumed the worldwide increase in traffic, in part fueled by developing countries, combined with limited slots in busy airports

My understanding is that Airbus assumed the worldwide increase in traffic, in part fueled by developing countries, combined with limited slots in busy airports would give a large boost to the hub and spoke model and make a large plane viable. I agree that the shift in the market to point-to-point was becoming apparent during A380 development. A major reason for the 747s popularity was it's range. With much more efficient engines coming along, smaller twin engine aircraft could cover most routes, and do so cheaper, so the A380 wasn't really needed anymore. But I reckon the project was too far along, with too much buy in and investment by European countries and partners, to pull the plug. Boeing foresaw this and focused on smaller, more efficient models instead. This sure saved them a lot of money and engineering resources. It's a shame for aviation enthusiasts though, it sure is a fascinating plane.

dingaling 8y ago
> This sure saved them a lot of money and engineering resources. The 787 development was so poorly planned and executed that it cost Boeing $28 billion in additional unplanned expenditure. And they've kicked that can down the road by booking that as 'deferred costs', an accounting sleight of hand that lets them pretend they haven't spent each dollar until they have earned it on a sale. Neither company of the duopoly came out of that rivalry looking good. But at least Airbus has accounted for all the A380 dev costs, no-one has to face that 10 years hence.
- the_duke 8y ago
  Yeah I remember the whole supply chain mess of the 787. Turns out outsourcing everything is not so ideal after all. Airbus had it's own fair share of development troubles with the A380 though, including the infamous cabling issue due to different software versions between France and Germany, and accompanying years of delays. I also highly doubt that the A380 has broken even. Building these beasts that are modern airplanes is just tough. I am fascinated with the whole supply chain topic though.
  - Gibbon1 8y ago
    > Turns out outsourcing everything is not so ideal after all. If you want a good reason military aerospace is a mess and NaSA couldn't build a replacement for the space shuttle, that's a big big reason.
  - pgeorgi 8y ago
    >> But at least Airbus has accounted for all the A380 dev costs > I also highly doubt that the A380 has broken even. That's not what it's saying, but that A380 dev is written off, while Boeing still has it on the books somewhere to make an appearance in the future.
  - mannykannot 8y ago
    An engineer commenting on the DC10 / L-1011 battle for market share said something like "it turns out we outsourced all the profit and none of the risk" - I have not tracked down the source, unfortunately. Maybe John Hart-Smith of Douglas... http://community.seattletimes.nwsource.com/archive/?date=20030309&slug=boeingcritique09 http://community.seattletimes.nwsource.com/archive/?date=200...
    - rfdave 8y ago
      That paper is out on the internet. I found a copy here https://s3.amazonaws.com/s3.documentcloud.org/documents/69746/hart-smith-on-outsourcing.pdf https://s3.amazonaws.com/s3.documentcloud.org/documents/6974... it's a good read on outsourcing, profits and management.
  - cc439 8y ago
    >Turns out outsourcing everything is not so ideal after all. The crazy thing is that this has been the primary business model in the automotive industry for decades at this point and it (generally) works exactly as advertised. If I had to posit why the benefits failed to materialize fot Boeing, it's that the Aerospace industry's approach to and competence with supplier development and quality control is sorely lacking in comparison to that of the automotive sector. It took decades for the major OEMs to get a handle on the mechanations of the tiered supplier system and they were also operating in a sector where production volumes are measured in the hundreds of thousands. It's far easier to absorb the cost of a "learning moment" when you can spread the cost of a new iniection mold made to the right spec over 100,000+ units. There are also far more opportunities for "learning moments" to appear when you're making hundreds of parts a day versus one a month. Not only can you play catch up without incurring too much of a cost penalty if a whole days production is scrapped, you can gather far more data to help you refine your process (statistical process control).
- hinkley 8y ago
  They copied some design elements in the subsequent updates to their other models, though, and the increased ranges helped with getting away fro the hub and spoke arrangement.
- InTheArena 8y ago
  This is incorrect - Airbus has to pay off the launch aid form governments that paid for it. The WTO later ruled this form of financing illegal, so in the last two years, Airbus has been converting it to more conventional financial structures. see: https://www.flightglobal.com/news/articles/airbus-confirms-a380-and-a350-launch-aid-amendments-448786/ https://www.flightglobal.com/news/articles/airbus-confirms-a...
  - usr1106 8y ago
    > Airbus has to pay off the launch aid form governments that paid for it. I don't think so. The article you linked says only that they need to be in compliance with WTO rules. There is nothing about no government support at all. According to recent media reports in Germany Airbus and its subcontractors got a 1 billion loan for developing the plane. Paying back them is coupled to the commercial success of the product. Because of the premature end of the product the companies will probably never have to pay the loans completely. Exact figures are not public yet. https://www.handelsblatt.com/today/companies/super-loss-maker-airbus-bids-adieu-to-a-costly-adventure/23988758.html https://www.handelsblatt.com/today/companies/super-loss-make...
    - InTheArena 8y ago
      Not paying these loans back would break the WTO rules - hence the conversion of the RLI/RLA to conventional structures that must be paid off (and they are considerably more then 1billion).
cm2187 8y ago
What I don’t get is that traffic will only increase. In many large cities you just can’t really expand airports. So even direct links using the B787 and A350 will become saturated at one point. So I would expect we will need jumbojets again in the future.
- ekianjo 8y ago
  not all planes are full. Even with current capacity the traffic in number of people will increase. Additionally airports dont have to expand, they can optimize for more frequent flights and also extend their operating hours. There are airports that close at night but some which operate pretty much around the clock.
  - MagnumOpus 8y ago
    The airports that have problems expanding (because ten thousands of people live in close vicinity) also will have problems opening at might (because millions of people live underneath the flight paths). Even Heathrow and Frankfurt, with famously strong opposition against new runways, have managed to get new runways approved but not to extend hours into the night.
    - Reason077 8y ago
      Heathrow expansion is far from a sure thing. It may have been "approved" by the government, but many legal and financial challenges remain. Not to mention ethical and environmental ones!
    - dsfyu404ed 8y ago
      > also will have problems opening at might (because millions of people live underneath the flight paths). Surely it's not the people that live there but the wealth and political clout of said people. Personally I don't mind the sound of aircraft or trains.
- TrickyRick 8y ago
  You can also fly more direct routes. Not everyone flying in to LHR wants to go to London, far from it in fact. So if airlines would service more direct routes that would decrease traffic on busy airports.
marcosdumay 8y ago
> My understanding is that Airbus assumed the worldwide increase in traffic, in part fueled by developing countries, combined with limited slots in busy airports would give a large boost to the hub and spoke model and make a large plane viable. And that bet made a lot of sense before 2008. The number of slots mostly wasn't growing, but number of passengers on airports was going really fast, with no serious economist predicting it would stop soon. What Airbus didn't explain was how the airports wouldn't invest in more slots, but would invest in the huge runway clearances required by their plane.
- rusk 8y ago
  > huge runway clearances Not to mention increased terminal capacity for the sheer number of passengers disembarking all at once.
  - swasheck 8y ago
    Seattle struggles mightily with this. Four international heavy flights arriving within 45 minutes of each other and you are stuck in customs for six hours
    - mauvehaus 8y ago
      I waited almost 3 to pick up my wife in Boston some years back because of the same issue. If only they knew when those flights were arriving so they could schedule customs and immigration staff to handle the traffic /s
      - chosenbreed37 8y ago
        > If only they knew when those flights were arriving so they could schedule customs and immigration staff to handle the traffic /s Took me a few seconds to get this...:)
      - hueving 8y ago
        It sounds trivial but it's not always that easy. I was on a flight from Narita to SeaTac that got a nice jetstream tailwind of around 200mph for most of the cruise. The same applied to another flight from Incheon to SeaTac. Both of these flights were originally scheduled to land around 8am. They landed around 5am so they had 2 CBP officers on shift to handle a 767 and a 777's worth of people. That mess ate up the entire gain of arriving early. They would have known about the early arrival not too much earlier than the departure time (order of hours, not days), which isn't really enough time to shift people's work schedules.
soapboxrocket 8y ago
The big reason for the A380 was a bet on hub and spoke models, your points above feed into that calculation. Boeing was also looking at something similar but decided that people would rather fly point-to-point rather than go hub to spoke. The 787 can land at almost any airport while the A380 can't. For capacity increase the 777-X will help fill that gap with a much better range than the A380.
wahern 8y ago
I was just reading the other day that SFO is rapidly approaching mandatory slot control, several years earlier than expected. I forgot where I read it but here's some info on the FAA site: https://www.faa.gov/about/office_org/headquarters_offices/ato/service_units/systemops/slot_administration/ https://www.faa.gov/about/office_org/headquarters_offices/at... SFO has given up on building another runway, which means the only way to grow is with larger airplanes. Some other large US airports are also likely to reach maximum movements in the next decade, and I imagine the same is true globally. And then on top of that California appears to be backing away from HSR. The biggest cost (legally, politically, financially) for HSR was land acquisition, the same reason SFO canned plans for an additional runway, and the same reason it's not feasible to expand metropolitan highways. Because traffic will only get worse, making OAK and SJC increasingly less attractive to those living on the peninsula, I'm guessing that SFO will see more A380 service than less. Not that it would make any difference for A380 viability, but it's understandable why Airbus, Emirates, and some others held fast to the promise of the A380 for so long. A week ago HN user Xixi linked to an article, https://leehamnews.com/2015/12/11/bjorns-corner-twins-or-quads/ https://leehamnews.com/2015/12/11/bjorns-corner-twins-or-qua..., arguing that the 4-engined A380 is actually more fuel efficient and less costly to maintain than comparable 2-engined aircraft like the 777 because 2-engined aircraft need overpowered engines. According to this argument what really killed the A380 was exactly what Emirates was upset about: no manufacturer was willing to sell an engine upgrade, so the A380 would be stuck with older generation engines while both contemporary and new model aircraft benefit from newer engines. I guess the engine manufacturers' calculus is largely concerned with volume, but it's also a sort of self-fulfilling prophecy. After reading that article I wasn't surprised when, perusing the Wikipedia pages for the new A220 (Bombardier CS300), Embraer E-Jet E2, Russian Irku MC-21, and Mitsubishi Regional Jet, I discovered that all the new planes at the small end of the market--a market that both Boeing and Airbus turned away from just a few years ago--are sporting a variant of Pratt & Whitney's new geared turbofan. It seems like in today's environment it's the engine that makes or breaks the plane.

dingaling 8y ago

> This sure saved them a lot of money and engineering resources. The 787 development was so poorly planned and executed that it cost Boeing $28 billion in additional unplanned expenditure. And they've kicked that can down the road by booking that as 'deferred costs', an accounting sleight of hand that lets them pretend they haven't spent each dollar until they have earned it on a sale. Neither company of the duopoly came out of that rivalry looking good. But at least Airbus has accounted for all the A380 dev costs, no-one has to face that 10 years hence.

the_duke 8y ago
Yeah I remember the whole supply chain mess of the 787. Turns out outsourcing everything is not so ideal after all. Airbus had it's own fair share of development troubles with the A380 though, including the infamous cabling issue due to different software versions between France and Germany, and accompanying years of delays. I also highly doubt that the A380 has broken even. Building these beasts that are modern airplanes is just tough. I am fascinated with the whole supply chain topic though.
- Gibbon1 8y ago
  > Turns out outsourcing everything is not so ideal after all. If you want a good reason military aerospace is a mess and NaSA couldn't build a replacement for the space shuttle, that's a big big reason.
- pgeorgi 8y ago
  >> But at least Airbus has accounted for all the A380 dev costs > I also highly doubt that the A380 has broken even. That's not what it's saying, but that A380 dev is written off, while Boeing still has it on the books somewhere to make an appearance in the future.
- mannykannot 8y ago
  An engineer commenting on the DC10 / L-1011 battle for market share said something like "it turns out we outsourced all the profit and none of the risk" - I have not tracked down the source, unfortunately. Maybe John Hart-Smith of Douglas... http://community.seattletimes.nwsource.com/archive/?date=20030309&slug=boeingcritique09 http://community.seattletimes.nwsource.com/archive/?date=200...
  - rfdave 8y ago
    That paper is out on the internet. I found a copy here https://s3.amazonaws.com/s3.documentcloud.org/documents/69746/hart-smith-on-outsourcing.pdf https://s3.amazonaws.com/s3.documentcloud.org/documents/6974... it's a good read on outsourcing, profits and management.
- cc439 8y ago
  >Turns out outsourcing everything is not so ideal after all. The crazy thing is that this has been the primary business model in the automotive industry for decades at this point and it (generally) works exactly as advertised. If I had to posit why the benefits failed to materialize fot Boeing, it's that the Aerospace industry's approach to and competence with supplier development and quality control is sorely lacking in comparison to that of the automotive sector. It took decades for the major OEMs to get a handle on the mechanations of the tiered supplier system and they were also operating in a sector where production volumes are measured in the hundreds of thousands. It's far easier to absorb the cost of a "learning moment" when you can spread the cost of a new iniection mold made to the right spec over 100,000+ units. There are also far more opportunities for "learning moments" to appear when you're making hundreds of parts a day versus one a month. Not only can you play catch up without incurring too much of a cost penalty if a whole days production is scrapped, you can gather far more data to help you refine your process (statistical process control).
hinkley 8y ago
They copied some design elements in the subsequent updates to their other models, though, and the increased ranges helped with getting away fro the hub and spoke arrangement.
InTheArena 8y ago
This is incorrect - Airbus has to pay off the launch aid form governments that paid for it. The WTO later ruled this form of financing illegal, so in the last two years, Airbus has been converting it to more conventional financial structures. see: https://www.flightglobal.com/news/articles/airbus-confirms-a380-and-a350-launch-aid-amendments-448786/ https://www.flightglobal.com/news/articles/airbus-confirms-a...
- usr1106 8y ago
  > Airbus has to pay off the launch aid form governments that paid for it. I don't think so. The article you linked says only that they need to be in compliance with WTO rules. There is nothing about no government support at all. According to recent media reports in Germany Airbus and its subcontractors got a 1 billion loan for developing the plane. Paying back them is coupled to the commercial success of the product. Because of the premature end of the product the companies will probably never have to pay the loans completely. Exact figures are not public yet. https://www.handelsblatt.com/today/companies/super-loss-maker-airbus-bids-adieu-to-a-costly-adventure/23988758.html https://www.handelsblatt.com/today/companies/super-loss-make...
  - InTheArena 8y ago
    Not paying these loans back would break the WTO rules - hence the conversion of the RLI/RLA to conventional structures that must be paid off (and they are considerably more then 1billion).

cm2187 8y ago

What I don’t get is that traffic will only increase. In many large cities you just can’t really expand airports. So even direct links using the B787 and A350 will become saturated at one point. So I would expect we will need jumbojets again in the future.

ekianjo 8y ago
not all planes are full. Even with current capacity the traffic in number of people will increase. Additionally airports dont have to expand, they can optimize for more frequent flights and also extend their operating hours. There are airports that close at night but some which operate pretty much around the clock.
- MagnumOpus 8y ago
  The airports that have problems expanding (because ten thousands of people live in close vicinity) also will have problems opening at might (because millions of people live underneath the flight paths). Even Heathrow and Frankfurt, with famously strong opposition against new runways, have managed to get new runways approved but not to extend hours into the night.
  - Reason077 8y ago
    Heathrow expansion is far from a sure thing. It may have been "approved" by the government, but many legal and financial challenges remain. Not to mention ethical and environmental ones!
  - dsfyu404ed 8y ago
    > also will have problems opening at might (because millions of people live underneath the flight paths). Surely it's not the people that live there but the wealth and political clout of said people. Personally I don't mind the sound of aircraft or trains.
TrickyRick 8y ago
You can also fly more direct routes. Not everyone flying in to LHR wants to go to London, far from it in fact. So if airlines would service more direct routes that would decrease traffic on busy airports.

marcosdumay 8y ago

> My understanding is that Airbus assumed the worldwide increase in traffic, in part fueled by developing countries, combined with limited slots in busy airports would give a large boost to the hub and spoke model and make a large plane viable. And that bet made a lot of sense before 2008. The number of slots mostly wasn't growing, but number of passengers on airports was going really fast, with no serious economist predicting it would stop soon. What Airbus didn't explain was how the airports wouldn't invest in more slots, but would invest in the huge runway clearances required by their plane.

rusk 8y ago
> huge runway clearances Not to mention increased terminal capacity for the sheer number of passengers disembarking all at once.
- swasheck 8y ago
  Seattle struggles mightily with this. Four international heavy flights arriving within 45 minutes of each other and you are stuck in customs for six hours
  - mauvehaus 8y ago
    I waited almost 3 to pick up my wife in Boston some years back because of the same issue. If only they knew when those flights were arriving so they could schedule customs and immigration staff to handle the traffic /s
    - chosenbreed37 8y ago
      > If only they knew when those flights were arriving so they could schedule customs and immigration staff to handle the traffic /s Took me a few seconds to get this...:)
    - hueving 8y ago
      It sounds trivial but it's not always that easy. I was on a flight from Narita to SeaTac that got a nice jetstream tailwind of around 200mph for most of the cruise. The same applied to another flight from Incheon to SeaTac. Both of these flights were originally scheduled to land around 8am. They landed around 5am so they had 2 CBP officers on shift to handle a 767 and a 777's worth of people. That mess ate up the entire gain of arriving early. They would have known about the early arrival not too much earlier than the departure time (order of hours, not days), which isn't really enough time to shift people's work schedules.

soapboxrocket 8y ago

The big reason for the A380 was a bet on hub and spoke models, your points above feed into that calculation. Boeing was also looking at something similar but decided that people would rather fly point-to-point rather than go hub to spoke. The 787 can land at almost any airport while the A380 can't. For capacity increase the 777-X will help fill that gap with a much better range than the A380.

wahern 8y ago

I was just reading the other day that SFO is rapidly approaching mandatory slot control, several years earlier than expected. I forgot where I read it but here's some info on the FAA site: https://www.faa.gov/about/office_org/headquarters_offices/ato/service_units/systemops/slot_administration/ https://www.faa.gov/about/office_org/headquarters_offices/at... SFO has given up on building another runway, which means the only way to grow is with larger airplanes. Some other large US airports are also likely to reach maximum movements in the next decade, and I imagine the same is true globally. And then on top of that California appears to be backing away from HSR. The biggest cost (legally, politically, financially) for HSR was land acquisition, the same reason SFO canned plans for an additional runway, and the same reason it's not feasible to expand metropolitan highways. Because traffic will only get worse, making OAK and SJC increasingly less attractive to those living on the peninsula, I'm guessing that SFO will see more A380 service than less. Not that it would make any difference for A380 viability, but it's understandable why Airbus, Emirates, and some others held fast to the promise of the A380 for so long. A week ago HN user Xixi linked to an article, https://leehamnews.com/2015/12/11/bjorns-corner-twins-or-quads/ https://leehamnews.com/2015/12/11/bjorns-corner-twins-or-qua..., arguing that the 4-engined A380 is actually more fuel efficient and less costly to maintain than comparable 2-engined aircraft like the 777 because 2-engined aircraft need overpowered engines. According to this argument what really killed the A380 was exactly what Emirates was upset about: no manufacturer was willing to sell an engine upgrade, so the A380 would be stuck with older generation engines while both contemporary and new model aircraft benefit from newer engines. I guess the engine manufacturers' calculus is largely concerned with volume, but it's also a sort of self-fulfilling prophecy. After reading that article I wasn't surprised when, perusing the Wikipedia pages for the new A220 (Bombardier CS300), Embraer E-Jet E2, Russian Irku MC-21, and Mitsubishi Regional Jet, I discovered that all the new planes at the small end of the market--a market that both Boeing and Airbus turned away from just a few years ago--are sporting a variant of Pratt & Whitney's new geared turbofan. It seems like in today's environment it's the engine that makes or breaks the plane.