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Thursday, Oct 23, 2014


Dwindling sales clip wings of Airbus A380

Three cancellations and not a single order this year -- as Airbus announced Thursday a disappointing outlook for the once-feted A380, analysts warned that the jetliner may not go the distance.

On October 31, Airbus had 1,215 firm orders on its books this year -- putting it ahead of rival Boeing -- but none for the super jumbo, the company said.


Sales of the world's biggest commercial aircraft already suffered in 2012 after hairline cracks were discovered on the wings of the A380. Only nine planes were sold last year, down from an initial order of 30.

"Airbus must quickly convince existing customers to bring forward their delivery dates" if it wants to balance its books for 2015, said Yan Derocles, an analyst at Oddo Securities.

But Airbus maintains it will meet its target of selling 25 jumbo jets by the end of the year, counting on an order signed in June for 20 planes by aviation investment company Doric.

"We plan to finalise the order by the year's end," said Doric's chief executive, Mark Lapidus.

The A380 burst onto the market six years ago with unrivalled credentials: a quiet, green and roomy double-decker model with space for 525 passengers.

Yet the jet "was never a good idea", said Richard Aboulafia, vice president of the Teal Group consultancy.

"In fact, it was a very bad idea, one of the worst self-inflicted wounds in aerospace history. The market wants range and efficiency; capacity for capacity's sake is not wanted at all," he said.

The A380's four jets are a disadvantage, he said, as twin jets "can do most of the job in terms of range and seat count".

"Airbus made its problem worse by designing an aircraft that's extremely heavy, even for its seat count."

Though it displays a healthy order book, with 115 orders completed of a total 259, the aviation giant is on the hunt for buyers for several A380s due for completion in 2015.

That quest is all the more urgent given the imminent arrival of two mini jumbos on the market -- Airbus' own A350XWB, set to enter into service in late 2014, and the Boeing 777X, due to be presented at the upcoming Dubai Air Show, and which will arrive on the market in 2020.

"We know that customers love flying on the A380. Is there a big enough market for the A380 to be profitable? We don't know yet," said Tom Chruszcz, an aviation and defence analyst with Fitch ratings agency.

The A380, whose catalogue price is listed as 403.9 million dollars (302.3 million euros) would need "between 250 and 300" orders to be profitable for Airbus. But a number of delays and additional costs meant that "you need to add a significant number of orders" to that, Chruszcz said.

But Lapidus said that Doric remained "extremely positive" about the A380.

"There are lots of people who have perhaps different views but fundamentally the bigger plane is viable in terms of being the aircraft of choice on trunk routes," he said.

The A380 was "profitable" while the jet's design, which allows direct boarding for first and business class passengers, was "a competitive advantage", he said.

With the number of air passengers set to double in the next 20 years, Airbus said it was confident its long-term profits would not be affected. The company estimated it would have 1,334 super jumbos in service over the next two decades compared to 760 for Boeing.

by Delphine TOUITOU © 2013 AFP

Source : AFP

Published on ASDNews: Nov 7, 2013

 

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