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Seems like a rather US-based perspective. It's true that no US-based airline has bought one. That's because the US has so many cities, that it makes sense for

by afafsd 12y ago

Seems like a rather US-based perspective. It's true that no US-based airline has bought one. That's because the US has so many cities, that it makes sense for airlines to serve (say) SEA-NRT and SFO-NRT with separate smaller planes rather than just one honking big plane from SFO-NRT. Countries whose airlines have bought A380s are countries where the vast majority of international air traffic is concentrated through one or two hubs. Singapore, Germany, France, Great Britain, Australia, Dubai, Malaysia, and so forth. It's true they've sold "only" four hundred of 'em. I have no idea whether that makes them a profit or not, and I doubt anyone outside Airbus knows that either, the economics of airliner manufacturing seems to be a pretty closely guarded secret (even the actual prices of planes are a secret...)

x0x0 12y ago
The article pointed out estimated R&D costs are $25B, and they're having to sell them for not much over manufacturing cost (so no, they aren't making a net profit, though almost certainly an operational profit). While that's an estimate, I doubt R&D expenditures are really that closely held; they can probably be estimated pretty well both from financial reports and from leakage from all the EU government entanglements of Airbus.
tptacek 12y ago
Just 10 airlines besides Emirates have taken delivery of 380s. Only 5 of those have taken delivery of 10 or more. The largest 380 customer after Emirates, Singapore, has orders for 70 350s and is a launch customer of the 787 with 30 orders, but just 5 orders for the 380. It's true that the market for the 380 is larger outside of the Americas. It would have to be, because the 380 has zero Americas customers.
- UnoriginalGuy 12y ago
  What was the point of that very strange "random numbers about 380 orders" paragraph? I don't get it. You didn't try to make a point with it, and you were jumping all over the place with data (is receiving 10 or more for a single airline an important metric?). Here's a list of orders Vs. deliveries: http://en.wikipedia.org/wiki/List_of_Airbus_A380_orders_and_deliveries http://en.wikipedia.org/wiki/List_of_Airbus_A380_orders_and_... Total Orders: 318 Options: 28 Deliveries: 138 - Emirates: 50 delivered - Singapore Airlines: 19 - Lufthansa: 12 - Qantas: 12 - Air France: 10 - Korean Air: 10 - British Airways: 6 - Malaysia Airlines: 6 - Thai Airways International: 6 - China Southern Airlines: 5 - Asiana Airlines: 2 deliveries
  - tptacek 12y ago
    Let me try to rephrase. Leave Emirates aside for a moment. Singapore is the largest buyer of 380s after Emirates. But unlike Emirates, for whom the 380 is the second-largest component of the fleet, the 380 makes up only a small part of Singapore's fleet. Moreover, the trend at Singapore is away from the 380, and towards the 350 and the 747. It is also probably not a coincidence that Emirates and Singapore are state-sponsored airlines. Lufthansa is also a state-supported airline, the flag carrier of Germany, and recipient of significant subsidies from the German government. Lufthansa is also canceling orders for the 380.
UnoriginalGuy 12y ago
Plus any US airline which purchased the A380 would get negative PR from it. While most US airline companies operate airbus aircrafts, the A380 was really marked within the US as "Us. Vs. them" type aircraft (not least of it as it was a flagship) where it was American manufacturing under attack (Boeing 747) by a foreign competitor. So the first US airline company who buys one is going to get attacked by every single "I only buy American" type, of which there seem to be plenty of in the US (e.g. "it is anti-American to buy abroad!" "Don't you support American jobs?!" and so on). I would also like to add that the A380 isn't really even competing for inter-US routes as it is too expensive to get up to altitude and you'd never fill THAT many seats on those routes. It is better as a longer range international aircraft (e.g. routes across the pacific or atlantic, europe to asia, etc). The only internal routes it might do well on are for example New York City to Las Vegas, California to DC, basically high volume and long range. I won't comment too much on the article specifically as it is quite obviously bias and had an agenda before pen hit page. I'm sure most Americans enjoyed it however.
- tptacek 12y ago
  You picked an argument that has a high bar to clear, because, as you noted, Airbus planes are very prevalent among US carriers. Jetblue, for instance, flies mostly Airbus planes. So to clear the bar, you have to show that somehow flying Airbus planes is OK, but the 380 in particular is somehow anti-American. It seems far more likely that long-haul hub-and-spoke products just aren't a good fit for the US market. The inefficiency of that model is practically SWA's whole operating thesis, and it's one of the 3 most profitable large airlines in the country.
- RockyMcNuts 12y ago
  meh... a number of US airlines fly primarily/exclusively Airbus (JetBlue, Virgin America) and they don't don't seem to have suffered a lot of negative PR. The 777 and 787 beat it on fuel economy, and only NYC is really slot-constrained. I'm not even sure if more A380s mean more passenger throughput since the super-jumbo needs longer separation between aircraft on takeoff and landing for wake turbulence. So what's the point? Yeah, it is a negative article, but just seems obvious they took a risk and overestimated the market. When they jumped in with the A350 to compete with the huge orders of the 787 it was a tacit admission Boeing had made the correct market call. Not like there haven't been a ton of negative articles about the 787's problems, Boeing spent $25b on it and they really need to sort out the kinks and ramp up the production rate to make a proper return. I flew an Emirates A380 a couple of years ago and it is a sweet, quiet ride.
ubernostrum 12y ago
As the article noted, this isn't just a US thing and actually isn't just an A380 thing. The A380 is just a very high-profile victim of it. The problems are twofold: 1. Four-engine airliners, regardless of size, are losing, basically worldwide, to twin-engine airliners with better fuel consumption. This is why the A380 and 747-8 sales are sluggish. This is why the A340 buyback program exists (airlines can't get rid of the planes since nobody else will buy them), etc. 2. The airline market as a whole is shifting away from the "have a single massive international hub and send all flights there" model -- only a few airlines can really support that, and not coincidentally they're the only ones continuing to buy A380s. This is part of the reason why the 787 and the A350 are selling so well; they enable flights to and from secondary or tertiary hub cities for which there is plenty of demand, just not enough demand to fill daily super-jumbo aircraft. This is why the 787 and the A350 are such a big deal, and why Airbus doubled down and announced a revamp of the A330. Boeing is facing the same problem with its 747-8; the passenger variant just isn't selling, the only airline that's taken delivery (Lufthansa) has announced it may retire them within 5-6 years of acquiring them, and rumor has it Boeing is only keeping the production line open to win the contract to replace the VC-25 (the modified 747 better known as "Air Force One").
- walterbell 12y ago
  > airline market as a whole is shifting away from the "have a single massive international hub and send all flights there" model Dubai airport is closing in on Heathrow at the #1 spot. If long-haul traffic through Dubai continues to increase, will this change demand for A380s by non-Emirates airlines? http://en.m.wikipedia.org/wiki/World's_busiest_airports_by_international_passenger_traffic http://en.m.wikipedia.org/wiki/World's_busiest_airports_by_i...
  - ubernostrum 12y ago
    It is important to understand the two types of traffic at a hub. There is connecting traffic -- people who are going from somewhere else to somewhere else and just using the hub as a point to change flights. And there is what the airline folks call "O&D" traffic (which stands for "Origin and Destination") -- people who are either starting their trip at the hub or ending their trip at the hub. Traditionally, hub locations have been chosen based on offering convenient connections to other places, but also on high levels of O&D. Thus, for example, New York in the United States, London in the UK, Frankfurt in Germany, and so on; all of these are convenient locations to get to other parts of their respective countries, but they are also major business and/or tourism centers, meaning lots of people are either based there or want to go there. O&D traffic is typically more valuable to an airline than connecting traffic. But there are now four airlines/hubs which have extremely low O&D traffic, and exist almost solely to provide connections between points in Europe/the Americas and points in south/southeast Asia and Oceania. Those are Emirates (Dubai), Etihad (Abu Dhabi), Qatar (Doha) and Singapore (Changi). This is a very different business model from other airlines, and to an extent it can only work if the carrier and the hub are heavily subsidized by the local government. So there's less incentive for other airlines to fly into those airports; generally it only happens when the airline can partner with the home carrier (as Qantas has done in the past with Singapore, and now does with Emirates, or British Airways connecting to alliance partner Qatar in Doha), but it still isn't as desirable as flying to a place which has significant O&D traffic. Which means it's less likely that the middle-eastern hubs will see significant increases in service from other airlines, and much less likely for them to see lots of other airlines buying A380s to fly to those hubs, because for most of them it just doesn't make financial sense. BA, for example, does fly to Dubai as a connecting point, but does it on a more-economical 777, and uses the A380 for heavier O&D routes like London-Hong Kong and London-Los Angeles.
Theodores 12y ago
If you live anywhere near Heathrow then you will see a lot of A380's. In fact it is hard to imagine there are so few of them given how many go flying overhead. Heathrow is a busy airport operating at full capacity. The A380 therefore makes complete sense, there is no other way to increase capacity apart from bigger planes. Hence, from the perspective of anyone living in West London, you have to wonder why airlines would buy anything else. It is all a matter of perspective, very much so. The order books are full for the A380 and it is obvious that there will only ever be a finite need for such a large aircraft. Therefore, if the order books are no longer growing then so what? Maybe the maths doesn't add up, however, keeping those A380s in the air is going to be pretty good business when it comes to spares and repairs. Again, perspective. Compared to those stupid fighter jet programmes the maths really looks a whole lot more plausible for the A380. I think that American sentiment towards European planes is easy to figure out. Cheap and dependable planes, yes, high tech wonders (Concorde, A380), no.
- idlewords 12y ago
  That's the same attitude we have towards American planes. I wish the sky was dark with SSTs.
- gsnedders 12y ago
  > Hence, from the perspective of anyone living in West London, you have to wonder why airlines would buy anything else. That assumes that all customers flying into LHR are long-haul customers; BA has a large number of domestic flights from LHR (including some wide-body 767s to EDI/GLA, but mostly narrow-body) and they undoubtedly have an effect on the loading of the A380 flights (if BA decided that the LHR-GLA flights weren't profitable because of the cost of landing slots at LHR, I'd simply fly via somewhere else, hence decreasingly the loading on the A380s).
ulfw 12y ago
Very true. I am actually surprised BA hasn't ordered more. Especially as Willie Walsh alluded to how much their customers like them. LHR is slot constrained as are others around the world. No better way than using a slot with as many customers as possible in a magnificent plane like the A380.

by afafsd 12y ago

x0x0 12y ago

The article pointed out estimated R&D costs are $25B, and they're having to sell them for not much over manufacturing cost (so no, they aren't making a net profit, though almost certainly an operational profit). While that's an estimate, I doubt R&D expenditures are really that closely held; they can probably be estimated pretty well both from financial reports and from leakage from all the EU government entanglements of Airbus.

tptacek 12y ago

Just 10 airlines besides Emirates have taken delivery of 380s. Only 5 of those have taken delivery of 10 or more. The largest 380 customer after Emirates, Singapore, has orders for 70 350s and is a launch customer of the 787 with 30 orders, but just 5 orders for the 380. It's true that the market for the 380 is larger outside of the Americas. It would have to be, because the 380 has zero Americas customers.

UnoriginalGuy 12y ago
What was the point of that very strange "random numbers about 380 orders" paragraph? I don't get it. You didn't try to make a point with it, and you were jumping all over the place with data (is receiving 10 or more for a single airline an important metric?). Here's a list of orders Vs. deliveries: http://en.wikipedia.org/wiki/List_of_Airbus_A380_orders_and_deliveries http://en.wikipedia.org/wiki/List_of_Airbus_A380_orders_and_... Total Orders: 318 Options: 28 Deliveries: 138 - Emirates: 50 delivered - Singapore Airlines: 19 - Lufthansa: 12 - Qantas: 12 - Air France: 10 - Korean Air: 10 - British Airways: 6 - Malaysia Airlines: 6 - Thai Airways International: 6 - China Southern Airlines: 5 - Asiana Airlines: 2 deliveries
- tptacek 12y ago
  Let me try to rephrase. Leave Emirates aside for a moment. Singapore is the largest buyer of 380s after Emirates. But unlike Emirates, for whom the 380 is the second-largest component of the fleet, the 380 makes up only a small part of Singapore's fleet. Moreover, the trend at Singapore is away from the 380, and towards the 350 and the 747. It is also probably not a coincidence that Emirates and Singapore are state-sponsored airlines. Lufthansa is also a state-supported airline, the flag carrier of Germany, and recipient of significant subsidies from the German government. Lufthansa is also canceling orders for the 380.

UnoriginalGuy 12y ago

Plus any US airline which purchased the A380 would get negative PR from it. While most US airline companies operate airbus aircrafts, the A380 was really marked within the US as "Us. Vs. them" type aircraft (not least of it as it was a flagship) where it was American manufacturing under attack (Boeing 747) by a foreign competitor. So the first US airline company who buys one is going to get attacked by every single "I only buy American" type, of which there seem to be plenty of in the US (e.g. "it is anti-American to buy abroad!" "Don't you support American jobs?!" and so on). I would also like to add that the A380 isn't really even competing for inter-US routes as it is too expensive to get up to altitude and you'd never fill THAT many seats on those routes. It is better as a longer range international aircraft (e.g. routes across the pacific or atlantic, europe to asia, etc). The only internal routes it might do well on are for example New York City to Las Vegas, California to DC, basically high volume and long range. I won't comment too much on the article specifically as it is quite obviously bias and had an agenda before pen hit page. I'm sure most Americans enjoyed it however.

tptacek 12y ago
You picked an argument that has a high bar to clear, because, as you noted, Airbus planes are very prevalent among US carriers. Jetblue, for instance, flies mostly Airbus planes. So to clear the bar, you have to show that somehow flying Airbus planes is OK, but the 380 in particular is somehow anti-American. It seems far more likely that long-haul hub-and-spoke products just aren't a good fit for the US market. The inefficiency of that model is practically SWA's whole operating thesis, and it's one of the 3 most profitable large airlines in the country.
RockyMcNuts 12y ago
meh... a number of US airlines fly primarily/exclusively Airbus (JetBlue, Virgin America) and they don't don't seem to have suffered a lot of negative PR. The 777 and 787 beat it on fuel economy, and only NYC is really slot-constrained. I'm not even sure if more A380s mean more passenger throughput since the super-jumbo needs longer separation between aircraft on takeoff and landing for wake turbulence. So what's the point? Yeah, it is a negative article, but just seems obvious they took a risk and overestimated the market. When they jumped in with the A350 to compete with the huge orders of the 787 it was a tacit admission Boeing had made the correct market call. Not like there haven't been a ton of negative articles about the 787's problems, Boeing spent $25b on it and they really need to sort out the kinks and ramp up the production rate to make a proper return. I flew an Emirates A380 a couple of years ago and it is a sweet, quiet ride.

ubernostrum 12y ago

As the article noted, this isn't just a US thing and actually isn't just an A380 thing. The A380 is just a very high-profile victim of it. The problems are twofold: 1. Four-engine airliners, regardless of size, are losing, basically worldwide, to twin-engine airliners with better fuel consumption. This is why the A380 and 747-8 sales are sluggish. This is why the A340 buyback program exists (airlines can't get rid of the planes since nobody else will buy them), etc. 2. The airline market as a whole is shifting away from the "have a single massive international hub and send all flights there" model -- only a few airlines can really support that, and not coincidentally they're the only ones continuing to buy A380s. This is part of the reason why the 787 and the A350 are selling so well; they enable flights to and from secondary or tertiary hub cities for which there is plenty of demand, just not enough demand to fill daily super-jumbo aircraft. This is why the 787 and the A350 are such a big deal, and why Airbus doubled down and announced a revamp of the A330. Boeing is facing the same problem with its 747-8; the passenger variant just isn't selling, the only airline that's taken delivery (Lufthansa) has announced it may retire them within 5-6 years of acquiring them, and rumor has it Boeing is only keeping the production line open to win the contract to replace the VC-25 (the modified 747 better known as "Air Force One").

walterbell 12y ago
> airline market as a whole is shifting away from the "have a single massive international hub and send all flights there" model Dubai airport is closing in on Heathrow at the #1 spot. If long-haul traffic through Dubai continues to increase, will this change demand for A380s by non-Emirates airlines? http://en.m.wikipedia.org/wiki/World's_busiest_airports_by_international_passenger_traffic http://en.m.wikipedia.org/wiki/World's_busiest_airports_by_i...
- ubernostrum 12y ago
  It is important to understand the two types of traffic at a hub. There is connecting traffic -- people who are going from somewhere else to somewhere else and just using the hub as a point to change flights. And there is what the airline folks call "O&D" traffic (which stands for "Origin and Destination") -- people who are either starting their trip at the hub or ending their trip at the hub. Traditionally, hub locations have been chosen based on offering convenient connections to other places, but also on high levels of O&D. Thus, for example, New York in the United States, London in the UK, Frankfurt in Germany, and so on; all of these are convenient locations to get to other parts of their respective countries, but they are also major business and/or tourism centers, meaning lots of people are either based there or want to go there. O&D traffic is typically more valuable to an airline than connecting traffic. But there are now four airlines/hubs which have extremely low O&D traffic, and exist almost solely to provide connections between points in Europe/the Americas and points in south/southeast Asia and Oceania. Those are Emirates (Dubai), Etihad (Abu Dhabi), Qatar (Doha) and Singapore (Changi). This is a very different business model from other airlines, and to an extent it can only work if the carrier and the hub are heavily subsidized by the local government. So there's less incentive for other airlines to fly into those airports; generally it only happens when the airline can partner with the home carrier (as Qantas has done in the past with Singapore, and now does with Emirates, or British Airways connecting to alliance partner Qatar in Doha), but it still isn't as desirable as flying to a place which has significant O&D traffic. Which means it's less likely that the middle-eastern hubs will see significant increases in service from other airlines, and much less likely for them to see lots of other airlines buying A380s to fly to those hubs, because for most of them it just doesn't make financial sense. BA, for example, does fly to Dubai as a connecting point, but does it on a more-economical 777, and uses the A380 for heavier O&D routes like London-Hong Kong and London-Los Angeles.

Theodores 12y ago

If you live anywhere near Heathrow then you will see a lot of A380's. In fact it is hard to imagine there are so few of them given how many go flying overhead. Heathrow is a busy airport operating at full capacity. The A380 therefore makes complete sense, there is no other way to increase capacity apart from bigger planes. Hence, from the perspective of anyone living in West London, you have to wonder why airlines would buy anything else. It is all a matter of perspective, very much so. The order books are full for the A380 and it is obvious that there will only ever be a finite need for such a large aircraft. Therefore, if the order books are no longer growing then so what? Maybe the maths doesn't add up, however, keeping those A380s in the air is going to be pretty good business when it comes to spares and repairs. Again, perspective. Compared to those stupid fighter jet programmes the maths really looks a whole lot more plausible for the A380. I think that American sentiment towards European planes is easy to figure out. Cheap and dependable planes, yes, high tech wonders (Concorde, A380), no.

idlewords 12y ago
That's the same attitude we have towards American planes. I wish the sky was dark with SSTs.
gsnedders 12y ago
> Hence, from the perspective of anyone living in West London, you have to wonder why airlines would buy anything else. That assumes that all customers flying into LHR are long-haul customers; BA has a large number of domestic flights from LHR (including some wide-body 767s to EDI/GLA, but mostly narrow-body) and they undoubtedly have an effect on the loading of the A380 flights (if BA decided that the LHR-GLA flights weren't profitable because of the cost of landing slots at LHR, I'd simply fly via somewhere else, hence decreasingly the loading on the A380s).

ulfw 12y ago

Very true. I am actually surprised BA hasn't ordered more. Especially as Willie Walsh alluded to how much their customers like them. LHR is slot constrained as are others around the world. No better way than using a slot with as many customers as possible in a magnificent plane like the A380.