BLEAK FUTURE FOR
Industry experts predict that plane model will be discontinued after 2020
BILQIS BAHARI
KUALA LUMPUR bt@mediaprima.com.my
THE future of the world’s largest commercial airplane, the Airbus A380, continues to look bleak after 10 years being in service. The superjumbo jet, which is also one of the most expensive commercial planes with a market price of US$436 million (RM1.77 billion) each, suffered a major blow at this year’s Dubai Air Show when its No. 1 customer, Emirates Airline, decided to order 40 B787-10s from Airbus’ rival Boeing Co.
As the Toulouse, France-based group is facing a challenging time to find new customers for its A380, people in the industry are predicting that the model would be discontinued after 2020.
Airbus begs to differ, however, saying that the A380 has been turning heads for a decade and that the model is a game-changer which symbolises innovation in the aerospace industry and marks a turning point for Airbus and its operators.
“The A380 is here to stay... it is the aircraft for the future. With passenger traffic doubling every 15 years, the A380 is the solution for sustainable growth.
“It can help de-congest airports on the growing number of high-volume, high-traffic and heavily-travelled routes, many of which are in the Asia-Pacific region,” an Airbus spokesperson told NST Business last week.
Airbus, in its latest 2017-2036 forecast report, says demand for commercial aircraft above 100 seats would double in the next 20 years, with nearly 35,000 new deliveries targeted.
Of the total new deliveries forecast, 71 per cent of units would be single-aisle aircraft while 54 per cent would be wide-body models.
Asia Pacific would account for 41 per cent of the new aircraft with more than 100 seats demand, while the United States and Europe together represent 36 per cent, it noted.
The Airbus spokesperson said about 99 per cent of future longhaul traffic would be between mega cities, many in the AsiaPacific region.
“Today, 54 per cent of A380 capacity is from, to or within the Asia-Pacific region, the fastest growing market in the world, and 18 per cent is on regional flights within Asia.
“High demand and congestion means that this region, in particular, needs the A380,” the spokesperson added.
Interestingly, Airbus’ executive vice-president head of programmes, Didier Evrard, was quoted in May this year that the European plane maker would decide on the number of production of the A380 by year-end.
He said it could be fewer than 12 planes per year.
To date, Airbus has delivered 213 of the A380 with 104 planes in its backlog order.
Maybank Investment Bank Bhd (Maybank IB) aviation analyst Mohshin Aziz said the cost to buy and maintain the A380 would be higher in future should the number of production decrease.
“Like any production line, you need a minimum volume in order to sustain the operations. Without it, production will shut down to a halt, (and) component suppliers will likely raise prices because contracts are always based on a minimum order level,” he said, adding that Airbus needs to improve on the value proposition of the aircraft.
He said the superjumbo plane is a niche model where only a few airports in the world are capable of taking it.
Currently, there is no secondhand market for the A380. Airbus, however, is confident of the market for second-hand A380, which the plane maker says can be leased or acquired at attractive rates.
Although the re-sale market of the A380 is non-existent at the moment, the jumbo jet could be used for the Islamic pilgrimage route as announced by Malaysia Airlines Bhd.
In December last year, the airline’s former chief executive officer Peter Bellew said MAS will start a new charter airline specifically to serve the haj and umrah markets.