
Airbus A380, Once the Future of Aviation, May Cease Production - okket
https://www.nytimes.com/2018/01/15/business/airbus-a380-emirates.html
======
ggm
I am a frequent business flyer, 10+ per year international long haul from
Australia. I appreciate that from a north american perspective the 380 didn't
make sense either economically from the economy which bankrolls Boeing, or
strategically from the economy which has specific interests in international
flights homed out of its east and west coast population centres.

I can tell you that for the South Pacific, Japan, India, China the 380 makes
perfect sense, and if passenger disposable income choices can direct to 380
flights in preference to current generation 777 and 787, they will. I know,
because within limits I can do this, and I do, and almost everyone I know who
flies transcontinental at this frequency or better does too.

You're mainly discussing supply side logic around wet leasing, dry leasing,
models of operation. I am talking about what the consumer side actually wants:
In business, its not 11 abreast pack-em-in which is what the 787 has done. Its
not the 777 which is a fine beast, but noisy as hell and getting old (refit
costs) We love the 380. We prefer to fly the 380. I've flown it on Emirates,
Singapore, QANTAS, China Southern and its a premium quality experience. Its
worth it.

~~~
jsjohnst
I question anyone who would chose any other plane over the 787 if they had a
choice, especially for long haul flights. My sinuses are night and day feeling
better after a flight on a 787. That alone makes up for any annoyance with the
windows or other minor inconveniences people frequently quote.

> its not 11 abreast pack-em-in which is what the 787 has done

Citation needed! I just checked every airline’s seating config for the 787 and
all are either 3-3-3 or more rarely 2-4-2 in economy.

~~~
kalleboo
Most of my flights these days are on ANA 787's and I honestly can't feel any
resulting difference in the humidity/pressurization even though I'm told it's
there.

~~~
jsjohnst
Take note of how much fluids you drink and how dry your nose / throat feels
after the flights. Maybe you’re lucky and it doesn’t make as much difference
to your body, but it does for many (including me).

~~~
kalleboo
Certainly it makes more or less of a difference to different people but you
said "I question anyone who would chose any other plane over the 787", so I
was explaining why some people don't see any pros to the 787.

------
tuna-piano
One interesting point, about airports being at capacity. A third runway at
London Heathrow is estimated to cost roughly the same as the entire A380
program!

In a world where an additional runway (at the most congested airport) costs as
much as creating a futuristic gigantic airplane from scratch, maybe it's not
that crazy? (Not sure how the additional spacing and other costs with the A380
add into this, but still interesting to think about).

An additional runway at London Heathrow Airport will cost $20B USD [1]. The
A380 development costs are estimated between $17B-$28B USD [2].

[1] [http://www.bbc.com/news/uk-england-
london-42399840](http://www.bbc.com/news/uk-england-london-42399840)

[2]
[https://en.wikipedia.org/wiki/Airbus_A380#Total_development_...](https://en.wikipedia.org/wiki/Airbus_A380#Total_development_cost)

~~~
Gibbon1
Reminds me, got called for mentioning the cost of expanding California's
airports as a justification for California's high speed rail.

Combining the two would make more sense, meaning put the airport farther away
where land is cheap and the flights won't annoy people and run passengers too
and from via a high speed shuttle. Bonus you can put security on the pickup
side of the rail line.

~~~
chiph
> where land is cheap and the flights won't annoy people

You'd need to back this up with strong zoning. I think it was Sacramento where
they put the airport out in the countryside .. and then land developers
discovered all this cheap land near it. Sure enough, the new residents started
complaining about the noise from takeoffs and landings.

Flight paths is one of the things I look at when I pick a new place to live.

~~~
samtho
I'm from Sacramento. The land that developers built on was formerly designated
floodplain (still is a floodplain) but did some trickery to get it cheaply and
build houses on it. I believe some rezoning was at play, but regardless, the
area around the airport when they built it, was suppose to not ever have
houses built on it.

------
double0jimb0
Interning at Boeing in 2005, when the Dreamliner was still 2-3 years away from
production, I asked a BD manager if Boeing was worried about A380 (the burning
question at the time was "Who is going to win, A380/Airbus or
Dreamliner/Boeing").

Without pause, he said "Not worried at all, A380 serves the hub and spoke
model, which is dying. People hate layovers, they want more direct flights."

Not a hard insight to grasp, and one which seems to have doomed A380 from the
start.

~~~
pkaye
It is not a obvious insight to grasp since airlines take a strategy that makes
them the most money and passengers are cost sensitive. Wasn't this the driving
force behind the hum and spoke model?

~~~
double0jimb0
Passengers are cost AND travel-time/hassle sensitive. It appears Airbus didn't
place enough value into the "travel-time/hassle" part.

More detail: the Dreamliner is 20% more efficient than previous generation
planes. This allowed airlines to "break" the major hubs into many
quicker/easier direct flights at a price that passengers are willing to pay.
Boeing bet increasing value in this manner was superior than Airbus's bet to
simply make hubs cheaper to operate.

~~~
geezerjay
Passangers are sensitive to travel time but the constraint is placed firmly on
cost, particular on major tourism destinations where airports are already
saturated.

Furthermore, some international and national air travel networks are in fact
organized in a hub and spoke pattern, particularly trans-oceanic flights where
demand is high and cost is the main competitive advantage, including business
travel.

It's easy to claim now that the choice that was made a couple of decades ago
was the right or wrong one, just like it's very easy to pick yesterday's
lottery numbers, but if the world economy didn't tanked and if Airbus's
projects weren't with so many delays then I really doubt Boeing's bet would be
so right.

~~~
thaumasiotes
> just like it's very easy to pick yesterday's lottery numbers

It can be harder than it appears. Never forget the poor Chinese guy who
noticed that the winning lottery numbers were announced before the close of
ticket sales, and got thrown in jail for his pains.

------
InTheArena
There are a lot of great books on the founding, planning, engineering and
delivering the A380. All of them come to one painful conclusion - the A380 was
driven more by politics and enabled by launch aid, rather then by real market
need.

Airbus has seen the effect of the Arbus 300, Boeing 767 and Boeing 757 in the
transatlantic market and knew that large twins capable of going trans-pacific
(777 and 787) would similarly fragment pacfic markets. But it was worth it to
the EU project, especially in the heady millennium world when it was planned,
to have it as a prestige project, and the market would be solid enough, if not
as large as Leahy and others were projecting.

People forget because of the debacle of the 787's engineering, but A380 had
massive engineering problems - not with the fundamentals (the 747 was the
worlds first double decker, first widebody - and the A380 was only a marginal
capacity over the 747) but rather in that they had a lot of political
problems, configuration errors, etc. The 787 still hasn't shown a profit (but
it will) the A380 will never do so, even if EK does order a new plane.

Finally, Emirates Airline (EK) is in a pickle here. They have a unbelievable
percentage of the overall A380 frames. Airbus ending the program plane will
result in the resale value of the A380s simnifically depreciating. EK saw this
coming a while ago and moves most of their orders over to leasing, but Airbus
has EK in a unenviable position here.

~~~
_0nac
Well, it goes both ways: EK, being essentially a monopsony customer, is also
in a great place to squeeze more concessions from Airbus. That's why the two
sides are currently engaged in a game of chicken, with EK pulling what seemed
like a done deal at the last Dubai airshow ("too expensive, lower your
price!") and Airbus now making rumbling noises about cancelling production
entirely ("price is too low, no plane for you!").

~~~
InTheArena
It does. It's the banking debt problem. When you owe the bank money, you have
a problem. When you owe the bank a lot of money, they have a problem.

------
jedberg
What a shame. The best flying experience I've ever had was coach on an A380
from SFO to Frankfurt. It was the only time I arrived feeling awake and fresh.
The air felt cleaner, the lighting was great, and it was _so smooth_.

I get why it isn't popular, but it's just too bad. I really liked flying on
one.

~~~
garmaine
Try a 787 sometime, you'll have a similar experience.

It has everything to do with being a new plane with new technologies (higher
air pressure, better lighting, newer seats, etc.). Nothing specific to the
A380.

~~~
jedberg
> It has everything to do with being a new plane with new technologies

That's true, and I still am looking for a chance to get on a 787.

Although I don't think anything can replicate the smoothness of the A380, it's
just _so big_.

~~~
jsjohnst
There’s another factor to consider that one doesn’t usually think about,
emergency evacuation. Watch this video [0] which many in the industry think
was rigged to even get this number and tell me which plane you’d rather be on.

[0]
[https://m.youtube.com/watch?v=_gqWeJGwV_U](https://m.youtube.com/watch?v=_gqWeJGwV_U)

------
rdtsc
I like to use A380 as an analogy when a team works to perfect a product, adds
lots of features, rewrites it a few times with the latest most buzzword-
compliant technology, tests it until it is absolutely perfect, and ships it.
... Only to find out by that time the market has moved on and nobody wants to
buy that kind of a thing anymore.

Pretty sure that's a common theme for companies which end up on
[https://ourincrediblejourney.tumblr.com/](https://ourincrediblejourney.tumblr.com/)

~~~
mschuster91
The problem is that you cannot simply ship a not "absolutely perfect" plane.
Or, actually, it's not a problem but a blessing given that there were no
commercial flight related fatalities in the USA in 2017 (per
[http://www.latimes.com/business/la-fi-aviation-
safety-201801...](http://www.latimes.com/business/la-fi-aviation-
safety-20180102-story.html)).

No doubt: Without the _drastic_ levels of regulation the FAA (and JAA) impose
on civilian flight, fatalities would be orders of magnitude higher.

~~~
theGimp
Cheap shot, but I'll take it.

All 14 days of 2018? :)

~~~
seanmcdirmid
The article said in 2017, probably a typo on the poster's side. The article is
about Trump trying to take credit for this (as he always does), when it is
actually the 6th straight year without fatalities. Politically speaking, we
are living in dark times even if aviation is super safe.

~~~
mschuster91
> probably a typo on the poster's side.

Yep, blaming this typo on a severe undercaffeination.

> Politically speaking, we are living in dark times even if aviation is super
> safe.

The interesting question is: given the political climate (and especially the
President's habit of "getting rid of rules"), how long will aviation _stay_
super safe?

------
joezydeco
If you follow @FakeUnitedJeff (United CEO parody account, but obviously an
insider), he said this today:

"I predict Airbus will abandon the A380 soon and the type will phase out of
non-Mideast 3 as they hit their first major maintenance check or lease end."

Worth nothing that the first A380 to enter passenger service just finished its
10-year lease to Singapore Airlines. SA chose to return the plane.

[https://www.bloomberg.com/news/articles/2017-11-08/parked-
in...](https://www.bloomberg.com/news/articles/2017-11-08/parked-in-the-
pyrenees-an-a380-awaits-new-owner-or-scrapyard)

~~~
MBCook
Are most planes leased? Do the manufacturers try to resell them when they come
off lease or are they inspected to be used for parts for repair?

~~~
Alupis
Most aircraft of that size are leased new - and then re-leased or sold to
budget carriers.[1]

New models come out and the airline may want to switch/upgrade, and it's a lot
of capital tied up in one aircraft if they were to purchase them outright.

[1]
[https://aviation.stackexchange.com/a/2374/2294](https://aviation.stackexchange.com/a/2374/2294)

~~~
joezydeco
This Quora answer is a good resource too:

[https://www.quora.com/How-does-the-airplane-leasing-
business...](https://www.quora.com/How-does-the-airplane-leasing-business-
work-Why-do-airlines-buy-the-planes-then-sell-them-to-a-leasing-company-and-
then-lease-it-back)

The TLDR is that leasing allows the airline a lot more flexibility in
acquiring aircraft (and returning them if demand changes). It's cheaper to
break the lease than try to sell a used aircraft on the open market. In the
case of A380, it's probably keeping a few airlines out of bankruptcy.

------
peterjlee
Here's a relevant video from Wendover productions explaining why Boeing 787 is
doing better than A380.

[https://www.youtube.com/watch?v=NlIdzF1_b5M](https://www.youtube.com/watch?v=NlIdzF1_b5M)

~~~
adjkant
This was super helpful in laying it out and surprisingly worth the time.

~~~
kristofferR
That's Wendover for you. All his air travel videos are great.

~~~
dx034
He's really good but often overly bullish on Boeing. Just because B787 and
A380 were developed at the same time doesn't make them comparable. He nearly
ignores the A321LR (which is successful because of the new model) and somewhat
downplays that the B747-8 (the actual competitor to A380) isn't doing well
either. Boeing didn't invest as much money in the B748 so it's not as severe
but comparing the A380 with B787 is misleading.

------
jk2323
Most comments about the A380 here are US-centered.

1\. The A380 can be upgraded and can be made more fuel efficient. But this is
an investment Airbus would have to made.

2\. The hub model is not dead. There are major hubs that are dying (Singapore
and Hongkong), there are current major hubs UAE, Moscow (Asia<>EU), Istanbul
and there are coming major hubs (Addis Abbeba (EU, Asia <>Afica), potentially
Tehran (geostrategic location, cheap oil, huge inner market, if they open up).
At least if I look at it from China.

Especially from huge markets with price sensitive customers like India and
China, I predict that the A380 could have a future. I think the Airbus CEO
once said "This plane come 10 years too early".

~~~
koyote
China also has a couple potential hubs as seen from Europe.

China Southern (which flies A380 via CAN) and Air China (one of very few 747-8
operators) often have the cheapest flights to Asia these days.

~~~
jk2323
Yes, of cause. The new China hubs (giant market, gov backed) are the reasons
for the Downfall of HK and SG. (tiny market, geolocation not great).

[https://www.bloomberg.com/gadfly/articles/2017-01-19/ominous...](https://www.bloomberg.com/gadfly/articles/2017-01-19/ominous-
fading-of-air-power-in-hong-kong-and-singapore)

------
mpweiher
Putting public pressure on Emirates, by Airbus's outgoing sales chief: "buy
now or you won't be able to buy in the future"

"Mr. Leahy, the Airbus chief operating officer, said on Monday that the A380’s
best days were ahead. Passenger traffic is doubling every 15 years, he said,
meaning that the original rationale for the model still holds."

They just need to tide it over the lean years.

EDIT: clarified what I meant with "pressure"

~~~
0xB31B1B
But the smaller planes are more efficient and scale better.

~~~
matt4077
There's a limit to scalability at airports, especially the big & busy ones in
western metropolis: JFK, LHR, FRA.

It's easy to build a new runway, or a new airport, in the desert, or when you
can evict anyone in the way. But try doing in a country ruled by law, when the
city has long engulfed the airport build in the 60s.

~~~
txcwpalpha
The scalability of airports is really only an issue at a select few airports,
though. JFK and LHR are the big ones that come to mind. FRA and ORD are pretty
congested as well. SFO might become extremely congested in the future as they
don't have much room to expand.

However, that's still only <10 airports in a world of thousands. Pretty much
every major Asian airport (with the exception of Haneda) has tons of room to
expand, and most are already doing so. Congestion is hardly an issue there.
Even in the US, there are still airports with plenty of unused capacity: DFW,
Denver, Dulles, Phoenix, Minneapolis, Detroit, etc have plenty of room to
build new terminals and runways as needed. Even LAX and ATL are still sitting
on plenty of land awaiting terminal expansion. And the same can be said for
much of the small-medium sized airports in the US as well.

The A380 is important to JFK and LHR slots, but I think it's much more likely
that we see a the growth of alternate airports and more point-to-point travel
than it is that the entire industry will make an about-face regarding the A380
just for the sake of a handful of airports.

~~~
saryant
Denver's airport was built with ATL scale in mind. It's already the largest
airport in the US by land size, nearly twice as large as the next airport on
the list, which gives them tons of room to expand without needing to buy up
neighboring plots.

The airport already has six runways and the master plan calls for six more.
Two of the three existing concourses can be lengthened to add more gates and
the plan allows for _four_ more concourses without needing to reconfigure
runways. Last year the city approved a plan for 39 new gates.

(In case you've ever wondered why taxiing at DEN takes forever, this is why)

~~~
txcwpalpha
Aye. It's a similar situation for DFW. The original master plan called for
_thirteen_ terminals (see pic [1]), not including the additional cargo
terminals/ramps. It currently has 5, and although it will probably never
expand to 13, there is enough land space for plenty of expansion.

1: [https://airwaysmag.com/wp-
content/uploads/2016/10/noahjeppso...](https://airwaysmag.com/wp-
content/uploads/2016/10/noahjeppson-copy.jpg)

------
detuur
In my personal opinion Airbus needed the A380 to break Boeing's cash cow. The
747 was basically a running money tap at the time the A380 was conceived, and
in order to level the playing field, Airbus needed to kill that cow. It's one
of the weird strokes of economics where the company has to act against its own
short-term interests, in order to create a long-term advantage (or rather,
prevent a long-term disadvantage).

Additionally, now they have the tooling, supply lines, know-how, and IP to
work at this extra large scale. While this might not translate into profit
short-term, it could very well prove to be an interesting long-term asset
again. I think in particular this is going to be interesting for them when the
middle class of China and India (or Bangladesh) boom, and very heavily
trafficked routes pop-up between heavily populated urban centres.

~~~
jpatokal
Delhi-Mumbai and Shanghai-Beijing are already in the world's top 10 busiest
routes, but AFAIK there is no regular A380 service on either.

[https://en.wikipedia.org/wiki/List_of_busiest_passenger_air_...](https://en.wikipedia.org/wiki/List_of_busiest_passenger_air_routes)

~~~
dingo_bat
AFAIK Delhi-Mumbai is served almost completely by A320s and 737s. I doubt most
people traveling on that route could afford a 787 or A380 flight.

~~~
kalleboo
Isn't the whole point of the A380 that it's cheaper per passenger-mile when
fully loaded up? Why would an A320 ticket be cheaper? Is it the cost of the
airframe? Could better leasing options (as other airlines leases run out)
solve that?

~~~
dingo_bat
I just assumed that buying a new jumbo jet would need costlier tickets, the
initial cost more than offsetting the cheaper operating costs. Otherwise why
are they not operating yet?

~~~
kalleboo
It's a complex equation. An old enough plane will have higher maintenance
costs. And many planes are leased instead of bought outright and those lease
prices already price in depreciation and expected lifetime.

------
m3kw9
One of the first Aircrafts to get rid of most CAN buses and use Ethernet for
internal comm.

------
deanCommie
Can someone with a better understanding of economics than me explain
something:

How is the "point to point" (direct short flights via Ryanair and the like)
beating "hub and spoke"(hubs like London and Frankfurt)?

I don't mean for convenience - obviously it's nicer to not have layovers.

But I mean economically. In the last 10 years, fuel prices have only gone up,
as has environmental awareness, and the A380 is surely cheaper per passenger
than a plane half it's size. So shouldn't flights via hubs be significantly
cheaper and be the most popular?

~~~
saryant
Jet fuel prices are half what they were ten years ago:

[https://www.eia.gov/dnav/pet/pet_pri_refoth_dcu_nus_a.htm](https://www.eia.gov/dnav/pet/pet_pri_refoth_dcu_nus_a.htm)

Prices peaked in 2008, dropped during the recession, reached that peak again
in 2011 and are now even lower than they were during the worst days of the
GFC.

~~~
deanCommie
Whoa that's shocking, why is this?

~~~
saryant
Crude oil prices tanked over the last ten years. Mostly a combination of OPEC
ramping up production and the rise of the American frackers.

~~~
bmmayer1
tanked

------
bsaul
Not sure airplane not selling is really the core issue. Someone working
closely with airbus management once told me the real problem with that plane
was that they allowed way too much customization of the interiors. No two
planes would end up being the same, and so the costs of building the plane
weren’t easily going down after some time. The end result was that airbus is
actually loosing money on each plane they sell.

That may be the real reason they would stop production IMHO.

~~~
zerkten
I'm not sure I buy that reason, unless the customization cost extends to the
equipment and process for building out the interior. Surely this cost would be
identified and then the options available reduced? But much harder, if your
need to retool for a cheaper interior.

~~~
coredog64
Around 1995, Boeing had a HUGE project to address this (DCAC/MRM). I wasn't
deep in the project, but the stories I heard were crazy. Something like 30
shades of white paint, or parts that were functionally the same having two or
more part numbers.

The one thing that has stuck with me is the statement that you can't undrill a
hole. It was the same thing the parent poster mentioned: Every operator wanted
their galley/lavatory to be in some Goldilocks location, and that required
drilling holes. Boeing pushed hard to limit the choices in order to bring cost
down.

Those holes also caused problems if a customer resequenced or walked away from
a partially built plane. Southwest would want a discount if you were selling
them a plane that was originally kitted out for someone else.

------
Simulacra
It's an amazing aircraft, and quite comfortable, but I feel like Airbus went
for size rather than Innovation.

------
reacweb
I am impressed. Most of the HN comments are praise, but A380 is failing
because of airlines strategical choice of avoiding hub. Is again the best
technical solution killed by intense lobbying ?

~~~
dx034
All modern planes are similarly advanced. B787 and A350 are as well. A380 is
just better known so that more people have flown with it. It's certainly not
the best technical solution (designed for larger size which makes it
inefficient). Many passengers love it because it's so huge but that doesn't
help airlines. Same as with comfort in economy, people like to complain about
standards but still end up booking the cheapest flight.

