Why the Airbus A380 failed to take off
When it was first announced in 2005, the Airbus A380 was supposed to represent the future of flying. Now, after just 12 years in service, the aircraft is being discontinued as the industry moves towards a no-frills approach
In 2005, when Virgin Atlantic placed an order for six Airbus A380 jets, Richard Branson joked that the airliners, which featured double beds and a casino, would offer customers “two ways to get lucky”, according to The New York Times. Airbus had placed its bet: as more passengers took to the skies each day, it predicted that airlines would demand larger jets as airports and routes became increasingly congested.
The aerospace manufacturer envisioned that the future of flying would be based on the ‘hub and spoke’ model, with passengers travelling between major airports and using connecting flights to reach their final destination.
Designed to compete with Boeing’s models, the A380 was never able to match the success of the 747
Fast-forward to 2019, and Airbus’ forecast has unravelled. Last year, Virgin cancelled its long-standing order of six A380s. Then, in February 2019, Emirates – the most loyal customer of the superjumbo programme – cut its order from 53 to 14 aircraft, while Qantas cancelled the delivery of its last eight A380s. This was the final nail in the coffin for the project: Airbus reluctantly announced the “painful” decision to permanently halt the A380 production line in 2021, following years of speculation regarding the model’s future. The plane that many thought would revolutionise aviation lasted just 16 years.
Efficiency is key
Meanwhile, on the other side of the Atlantic, Boeing made a bet of its own. Conversely to Airbus, the Seattle-based manufacturer envisioned customers flying point to point between smaller airports. As the A380 took to the skies for the first time in 2007 – just as the global financial crisis was starting to hit the pockets of operators and customers – Boeing unveiled the smaller, sleeker, more efficient Dreamliner 787 aircraft, a jet that could fly the same distance as Airbus’ jumbo on two fewer engines.
As margins were stretched, airlines struggled to afford the risks associated with jumbo jets. An aircraft that was smaller and quicker to refill was a far more appealing offer. “The A380 is an aircraft that frightens airline CFOs; the risk of failing to sell so many seats is just too high,” a senior aerospace industry source told Reuters in February. As Airbus grappled to find potential customers for its flagship craft, orders for the 787 were piling up.
“The future of aviation is being driven not by the big, established global players, but by small, low-cost start-up operators,” Martin Pugsley, Head of Financial Services at law firm DWF, told The New Economy. “These companies look to scale up quickly by offering lots of flights connecting lots of locations. To do this, they need smaller, lower-cost, fuel-efficient, single-aisle aircraft that have a quick turnaround time. The fastest-growing markets for aviation services are in the developing world, and most of these new players are following the low-cost model too.”
Airbus relied on Emirates to keep the A380 programme running. Prior to cutting its order, the Dubai-based airline had ordered a total of 162 jets (with 109 currently in operation) – nearly seven times more than the second-largest operator, Singapore Airlines (with 24). Only three other airlines have more than 10 in their fleet, while just one Chinese carrier – China Southern – operates the model. Not one American airline has made an order.
In total, there were 290 firm orders for the jet, of which 234 have been delivered – well short of Airbus’ target of 700. Analysts believe the company has only recuperated a small fraction of the estimated $20bn spent on research and development. The jet, first dreamed up in 1988 and blighted by years of delays as Airbus attempted to get it in the skies, never really took off.
Wrong place, wrong time
Many have asserted that the A380 programme was doomed to fail well before production began. Aviation analyst Richard Aboulafia slated the aircraft, calling it “simply the dumbest programme of modern times” in a 2019 interview with travel blog the Points Guy. Designed to compete with Boeing’s models, the A380 was never able to match the success of Boeing’s own jumbo, the 747 – an aeroplane that came to be known as the ‘Queen of the Skies’. Boeing sold roughly 1,500 of the aircraft, with its ‘hump’ becoming the most recognisable silhouette in the sky.
However, regulations have significantly changed since the jumbo jet’s introduction more than 50 years ago. In the early days of aviation, Extended-Range Twin-Engine Operational Performance Standards (ETOPS) decreed that two-engine aircraft had to fly within 60 minutes of an airport in case they encountered engine issues. As technology progressed and aircraft manufacturers improved their safety records, these regulations were gradually relaxed. Today, Boeing’s 777 and 787 models are able to fly as far as five hours from the nearest airport, leaving them free to operate on effectively any route in the world and opening up new opportunities to airlines – opportunities that have crowded out the A380.
The A380 had its first test flight in 2005 – two years before the new ETOPS directive was issued. With the aircraft designed to take advantage of the previous rules, the change to regulations were a huge blow. “What we are seeing here is the end of the large, four-engined aircraft,” Airbus CEO Tom Enders said in February. “There has been speculation that we were 10 years too early; I think it is clear that we were 10 years too late.” The 747 was a roaring success because it entered service during a period of strict regulation, making it the only option. The A380, meanwhile, deemed a financial flop, was overwhelmed by increased competition as a result of relaxed rules.
The spaciousness of the A380 made it a favourite with passengers, while its scale made it a favourite among plane spotters. A dedicated website was set up to help passengers choose a route served by the jet, and in February 2019, The Guardian’s transport correspondent Gwyn Topham said “it felt a miracle” that this enormous plane could fly.
But in spite of this reverence, business travellers – integral to the profit margins of legacy airlines and flag carriers on long-haul routes – demonstrated an overwhelming preference for flight frequency and flexible schedules over aircraft size. Airlines found they could fly two 777s on a typical long-haul route at a lower total cost than flying one A380, making the aircraft economically uncompetitive on all but a handful of routes worldwide.
“When Airbus unveiled the prototype in 2005, its main selling point was its sheer size. Ironically, the aircraft’s size is what turned potential airline customers off,” said Pugsley. “Each unit is naturally far more expensive than smaller rival models, which meant that Airbus was operating in a small market from the very beginning.”
The limited appeal was further compounded by a lack of airport facilities capable of handling the plane. Airbus had out-engineered the airports: gates had to be refitted to accommodate a plane of such magnitude; runways had to be strengthened to cope with its weight; and even terminals had to be adjusted to ease potential passenger congestion issues stemming from the A380’s vast capacity. “When you deal with new technologies where the industry has not enough previous experience, it’s easy to underestimate the challenges during the design,” Paolo Colombo, Global Industry Director at software developer ANSYS, told The New Economy.
As one innovation meets its demise, another is born. The Boeing 777-9 is due to make its first flight later this year and, though it has just a single deck, its expected capacity of around 400 passengers near enough matches that of the A380. Further, despite having half as many engines, it can fly just as far. Equipped with folding wing tips, the jet can operate in and out of all of the world’s major airports.
With the aircraft already outstripping the A380 in terms of orders a year before its formal launch, it looks like the new ‘Triple Seven’ could be the future of aviation. But, then again, the same was once said of the A380.