“The more sand that has escaped from the hourglass of our life, the clearer we should see through it.” – Sartre
What would Jean-Paul Sartre make of the Airbus A380? Imagine, if you will, Sartre expressing his love for Simone de Beauvoir in the sumptuous Suite of a Singapore Airlines A380 as he coos, “Try to understand me: I love you while paying attention to external things. At Toulouse I simply loved you…”
In Toulouse today, they are more focused on profits than on philosophy, on “Love at First Flight” than on decoding what de Beauvoir means when she says, “One’s life has value so long as one attributes value to the life of others.”
It is a safe bet that Fabrice Brégier and Tom Enders, the two Airbus helmsmen, understand perfectly the philosophy of making money. Both know and recognise why the A380 hasn’t succeed and that it probably never will in years to come. But can Airbus turn it around?
The A380 programme is living on borrowed time, in our view. Inject a couple more billion euros in it or cut the losses? Airbus has broached this idea before – read it here. The European planemaker has cut A380 production to 12 in 2018 and eight in 2019.
Last week the first A380 operated by SIA (the A380 launch customer) reportedly has been taken out of service. The airline said it plans to hand it back to its German owners instead of renewing the 10-year lease. Three other SIA A380s are also slated to return to the lessor by June 2018.
SIA took delivery of the world’s first A380 on October 25, 2007 amidst much fanfare and expectations. We’ve been skeptical of the A380 since Airbus first announced it was building it.
First, there wasn’t a market big enough for such a huge plane, so the economics were off. Even under the current climate of low fuel prices, it’s still costly to run the four-engined A380 – ask Malaysia Airlines or Thai Airways. Second, the trend is pointing to (more) people flying point-to-point, rather than from hubs. Third, there’s a case to be made of an over-capacity in long-haul flights.
The A380 is a marvelous aircraft from a technology standpoint: cosy, efficient and quiet. It’s fun to ride in, too, especially on SIA and Qatar Airways, but definitely not on British Airways’ Club World – never understood how they could allow those odd backward and front-facing seats to be installed in the first place.
The A380 has mostly benefitted just one carrier in the past decade – Emirates – with 96 currently in service. Even SIA, with 19 in its fleet, has discovered the plane isn’t a cinch to make money. And so SIA deploys some of its A380s to destinations that appear tricky to extract good yields, such as Auckland, Hong Kong and Zurich.
Dubai-based Emirates has ordered 140 A380s, which is 40% or almost half the total A380s on order. It works for Emirates because Dubai is a mega air hub that connects passengers from say, the Far East or Australasia, to those in Europe and the UK (especially slot restricted Heathrow).
Unfortunately, for second-tier airlines such as THAI and Malaysia Airlines, this sort of strategy isn’t for them. So why on earth did they buy the A380s? They aren’t very smart carriers to begin with… does anyone seriously think the A380s will rake in money from Hajj flights?
To paraphrase Sartre, more money will likely escape from the Airbus hourglass, but can the folks at Toulouse see any clearer?