Super Jumbo
Airbus delivered 123x A380s to Emirates, the double-decker’s largest customer, and the last one ran off the Hamburg Finkenwerder production line in December 2021. Since only 251 of these aircraft were ever delivered (compared with 1,567 Boeing 747s, another aircraft with stairs) the market thinks the A380 a commercial failure. But I disagree – the A380 has been a tremendous strategic success for the European aircraft manufacturer. This article explains why.
A380 creates economic growth in Asia & Africa
Asian and African longhaul flights have always been more about capacity rather than frequency. The market demands sleeper services which leave late at night and arrive early in the morning. Due to airport curfews there simply are not that many slots available, so the larger the aircraft the better.
It is no coincidence that state-owned Singapore Airlines was the A380’s launch customer and Korean Air, China Southern Airlines, Malaysia Airlines, Thai Airways, Korean carrier Asiana and Japanese All Nippon Airways (ANA) followed. Check out my favourite livery - ANA’s beautiful Lani, Kai and Ka La!
(I claim no ownership of this image - if you do I hope you are cool with me using it to tell this story, if not please let me know and I will take it down)
South African Airways and Ethiopian Airlines could probably have made a good go of the super jumbo too, but suffered from shortages of management vision and finance. The aircraft was a great choice for BA on Miami, which has high yields, strong demand and a precise 24-hour rotation, so one aircraft can be used profitably for exactly one service per day with as many seats as possible.
Emirates, Etihad and Qatar Airways in the middle east have all brought A380s too and are perhaps the most iconic operators. Emirates flies them with their famous bars to the most cities, Etihad has their famous “Residence” with a special bedroom and Qatar Airways has a beautiful lounge, which I played a small part in creating. These aircraft were funded in-part by petro-dollars but economic growth as their home cities became business and tourism centres contributed too.
The economic rationale for the so-called middle east three (ME3) carriers is that India, Africa and Asia are on the move. Altogether 4.7 billion people live in these regions and if only 1% of them (47 million) start flying longhaul each year that alone supports one of these giant airlines. A small but significant number of such passengers will only have travelled due to the low fares that only the A380 offers – to see why, it is a consequence of the law of demand: if there are more seats for sale than on a smaller aircraft, at least some of them will have lower fares on the super jumbo too.
For Etihad and Qatar Airways especially, European and Australian markets are sideshows in comparison.
A380s have not only allowed asian airlines and the ME3 to carry millions of passengers. Those journeys led to economic growth, development and prosperity as they brought tourists and business travellers ready to spend money and invest. As a form of development assistance, A380 has been a European triumph.
A380 rules in passenger experience
Airline managers talk about the A380’s high costs and the large numbers of seats they have to sell to make them economic. That misses the point. Passengers love the big aircraft and actively seek it out – so much so that Airbus launched iflya380.com, which allowed passengers to find and book only A380 flights. Airlines with high volume routes who cannot operate the aircraft profitably (pre-COVID) do not understand how to earn revenue.
Frank van der Post, responsible for BA’s customer experience when the A380 was introduced, remarked that the large aircraft gave them space to create different “rooms”, especially in Club World (BA’s name for business class). BA’s other longhaul workhorse is the Boeing 777, which has been compared to a dormitory in Club World since there are no bulkheads between sections of the cabin.
A380 is great PR too. Everyone knows the plane and many will be inspired – some will actively seek out Airbus aircraft on other routes. As such, airlines who operate A220s, A320 family, A330 and A350 equipment will experience a small but significant demand increase. A380 probably increases revenue for all airlines with Airbus aircraft just by existing.
A380 makes other Airbus products better and has penalised Boeing
I will address Boeing’s shortcomings in a future article. Their aircraft have operational penalties from the lack of commonality between families, which means that parts, pilots and interiors valid on one are not necessarily valid on another. A fleet of Boeings is inefficient.
Boeing cabins are inconsistent too, so passengers will be unsure what their flight will be like – a problem they will not find with the A330 and A350 aircraft, whose cabins look almost identical to the casual observer, translating into another potential growth in ticket sales. Once again, Airbus operators have acquired a small but significant revenue advantage.
Boeing product development is also rather odd. Their proposed New Market Aircraft (NMA) addresses a segment which Airbus serves with either the longer-range members of the A320 family or the A330-neo (new engine option – meaning the aircraft can go further and use less fuel). The problem for Boeing is that their 737-MAX and 787 families can also serve the same markets. The NMA will be competing with other Boeing products, not Airbus.
Maintenance and performance data of Airbus aircraft are streamed to airlines in real time through their “Skywise” data ecosystem. While today Skywise tends to focus on maintenance, fuel consumption and other cost-centred metrics, in the future it will provide reports on things in the cabin – everything from how passengers are using their seats to what they order from the galleys through seat-back screens. Because of Skywise, future Airbus fleets will offer permanent cost advantages and better customer service than Boeing equipment.
A key reason for all of these Airbus advantages is that Boeing’s 747-8, another double-decker aircraft, did not win as many orders as hoped.
Had Airbus not developed the A380 it is unlikely that Emirates would have ordered 123x A340s (the largest Airbus aircraft at the time). They would have taken 123x 747-8s instead. These would have rolled off the production line at vast profit, which Boeing would have re-invested in a better product today.
The modern Airbus family offers more operational efficiency, a better customer experience and superior data for improvements that any airline can use to boost their business on both revenue and cost sides. If Boeing had sold 123x 747-8s to Emirates they would probably have got there first. To the victor the spoils and confound the loser.
Airbus has the more impressive product portfolio today and A380 was the driving force behind-the-scenes. That is the A380’s true legacy.
oliver AT ransonpricing DOT com