Note: This is an old essay I wrote (c. 2015/2016) in response to a question published in the Airways Magazine newsletter, its out of date and I have since changed my opinion- I now doubt the A380's prospects, but it was fun to do while I did it. Aviation sure has changed since then; the superjumbo's chances seem so different now.
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Emirates Airline is the primary proponent for an upgrade to the slow-selling Airbus A380. Having already built the aircraft as the backbone of its fleet with 140 aircraft delivered or on order, Emirates is pushing for a re-engined variant of the superjumbo. With sales slow on the current version and having spent upwards of $20 Billion on the program, Airbus is wary of pouring more money into an upgrade. Publically it claims future sales of 1,700 Very Large Aircraft (VLAs) such as the A380 or even slower selling 747-8, but this view does not appear to be vindicated as risk-averse airlines focus their attention on the smaller A350 and 787. Perhaps as Airbus claims, the A380 is ahead of its time, and will gain traction with increasing airport congestion. This is likely to be at least partially true with a re-engined version of the quad-jet having lower operating costs, but a study of potential customers yields a market of at most 500 aircraft with about 350 sales more likely, including further orders for the current version with the GP7200 and Trent 900 engines. The ultimate questions that will determine sales are: How risk-averse are investors? Will environmental protests kill needed airport expansions? And will oil stay low?
Below, potential customers for the A380neo are listed by their likelihood of an order.
Very Likely:
Emirates Airline
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Its not “if” that’s the question, its how many digits long their order will be. Emirates’ hub operations are incredibly large already, and the airline, also known as India’s de facto flag carrier with its large operations there, is only constrained by capacity limits at Dubai-International. Dubai’s new airport, World Central, will have 200 A380 capable gates and with multiple flights per gate, Dubai as a hub has much growth ahead of it.
Destinations: Almost every destination Emirates flies to, both now and in the future.
Number: 140-200
Qatar Airways
CEO Akbar Al-Baker has stated his interest in the A380neo, mostly for replacement but probably with some healthy growth in Asia.
Destinations: London, Paris, Bangkok, Singapore, New York, Dallas/Ft.Worth, Hong Kong, Dehli, Mumbai,
Number: 10-20
British Airways
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Even if London-Heathrow’s third runway is built, many of the slots will go to EasyJet which plans a base at the airport, Virgin Atlantic, and new airlines from the BRIC and MINT. A focus on yield can’t last with new competition and if British Airways hopes to stay competitive, it will need a larger fleet of A380’s.
Destinations: New York, Los Angeles, Hong Kong, Miami, Dallas, Vancouver, San Francisco, Sao Paulo, Dehli, Mumbai, Singapore, Doha (in conjunction with Qatar Airways), Shanghai, Beijing, Tokyo
Number: 25
Lufthansa
Although Lufthansa is still racked with labor turmoil, and its 777-9X order shows a move toward large-twins,a replacement of its existing A380 fleet and some 747-8s could be more economically completed with the A380neo. Lufthansa has already stated some interest and could become a successful customer if it regains cost control and labor peace.
Destinations: Miami, New York, Washington, Boston, Chicago, Toronto, San Francisco, Los Angeles, Denver, Houston, Sao Paulo, Delhi, Mumbai, Tokyo, Hong Kong, Shanghai, Singapore, Beijing.
Number: 20
Singapore Airlines
Replacement and growth to maintain a premium positioning
Destinations: Sydney, Melbourne, Auckland, Los Angeles, San Francisco, New York, Tokyo, Seoul, Beijing, Shanghai, Hong Kong, Bangkok, Delhi, Mumbai, London, Paris, Frankfurt, Moscow.
Number: 25
Etihad Airways
Replacement and growth unless a merger emerges with Emirates
Destinations: London, Paris, Sydney, New York, Singapore
Number: 8
Likely
Qantas
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An increasingly constrained main hub and long flights, combined with its Emirates Airline partnership are catalysts for a Qantas A380 fleet.
Destinations: Sydney-Dubai-London, Sydney-Los Angeles, Sydney-Dallas, Sydney-Singapore, Sydney-Hong Kong, Sydney-Tokyo, Melbourne-Dubai-London, Melbourne-Los Angeles, Brisbane-Los Angeles, (Dubai-Paris, Dubai-Toronto?)
Number: 15
Cathay Pacific
Slot constraints and diminishing returns from simple frequency growth could convince Cathay Pacific to purchase the A380neo.
Destinations: London, Paris, Frankfurt (if Cathay Pacific switches to Star Alliance to be with shareholder Air China), Los Angeles, San Francisco, New York, Delhi, Mumbai, Sydney, Melbourne, Tokyo, Beijing, Shanghai
Number: 18
China Southern Airlines
Market growth and liberalization, including an end to China’s “one airline, one route” will support an A380neo order from China Southern.
Destinations: Beijing to Paris, Chengdu, and London. Guangzhou to Sydney, Melbourne, Los Angeles, London, New York, and Paris
Number: 12
Air China
Air China will gain slots at Beijing Capital Airport with the 2018 opening of Daxing, but by the time the A380neo arrives it will be full again. An order could be shared with shareholder Cathay Pacific to gain scale.
Destinations: London, Paris, Frankfurt, San Francisco, Los Angeles, New York, Hong Kong
Number: 12
China Eastern
Slot shortages at Shanghai and competitive pressure could force China Eastern’s hand for a small order.
Destinations: London, Paris, Los Angeles, New York
Number: 8
Korean Air
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Korean Air has taken a large share of the North America to Asia market and although it plans to hold capacity steady in the short term, growth with the A380neo will be needed to maintain its market position. A denser configuration than the airline’s current A380 fleet , however, may be needed to reduce unit costs.
Destinations: London, Paris, Bangkok, Hong Kong, Shanghai, Beijing, Sydney, Los Angeles, New York, Vancouver
Number: 15
Asiana Airlines
With the same geography as Korean Air, Asiana can use the A380neo on its densest routes competing strongly with Korean, but with the added benefit of lower unit costs.
Destinations: Frankfurt, Los Angeles, San Francisco, New York
Number: 6
Thai Airways International
Replacement of current fleet if and only if “political situations” end in Thailand, could prompt an A380neo fleet from the current operator of 6 A380s.
Destinations: Frankfurt, Paris, London, Tokyo, Hong Kong
Number: 6
EVA Air
EVA Air has a strong trans-pacific network, focused on transfer traffic from Southeast Asia to North America through Taiwan. If China and Taiwan liberalize air traffic rights between their countries, EVA could draw strong traffic from southern China and further grow its position in North America. The A380neo, or even current-generation A380s are the perfect tool for this expansion.
Destinations: San Francisco, Los Angeles, New York, Vancouver, Sydney
Number: 8
Turkish Airlines
Turkish Airlines aims to promote its Istanbul hub as a global transfer point. Its hub operations are presently focused on operating numerous narrowbodies and a new airport will increase available landing slots, so Turkish may have no short–term need for the A380. However, growth and competitive pressures will likely force Turkish in the medium term to order the A380neo.
Destinations: London, New York, Los Angeles, Delhi, Mumbai, Beijing, Shanghai, Hong Kong, Tokyo, Singapore, Bangkok, Chicago, Paris, Frankfurt
Number 15-20
Possible Orders
The A380 may currently be seen as too large for some airlines or market conditions may be unstable at present. Yet with optimistic traffic forecasts for regions around the world, many carriers who currently show no interest in the A380 may yet be convinced. Marc Lapidus, president of leasing company Amedeo who has ordered 20 A380s has talked of much misconception about the A380. He says that airlines are amazed at the operating costs of the A380 when they examine them. If Lapidus’s Amedeo is successful in changing airline’s opinion of the A380, several more could be customers for the A380neo in the long-term.
A few examples and possible fleet sizes are:
Aeroflot 8
Air Asia X 10-15
Air Canada 6
American Airlines 10
Garuda Indonesia 8
HNA Group 10-15
KLM 8
LATAM Airlines Group 10
United Airlines 10
Vietnam Airlines 7
The A380’s future clearly rests in a re-engined version. Although the total market is less than what Airbus has predicted, sales of 300 to 500 aircraft are likely over a medium-term horizon of fifteen to twenty years. As always, aviation growth with the A380 will require great liberalization, economic growth, and in developed markets a return of population growth will stimulate more demand. The A380 is an extremely capable, comfortable, and economical aircraft. An A380neo, while costing in the billions of dollars, will only improve the aircraft.
But aviation does not always run logically, or smoothly, and it usually does not. The drama is yet to fully unfold.
Update 2018: As it looks now the A380neo doesn't seem likely, and if it ever happens Emirates appears to be the only possible customer, as the A380 concept appears increasingly old, riskier, and outdated.
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