Parts sell-off weighed for old Airbus A380s
Several of Airbus’ A380 superjumbo jets face the ignominy of being broken up for spare parts if second-hand operators for the oldest planes can’t be found in the coming months.
The double-deckers could be “parted out” to recover engines and other spare parts worth at least $100 million per plane, according to German fund manager Dr. Peters, which owns four A380s due to be returned between October and June by Singapore Airlines after the expiration of 10-year lease deals.
At the same time, talks are continuing with six potential operators of the jets, including an Asian low-cost airline that would fly them in a 700-seat single-class layout, said Anselm Gehling, chief executive officer of Dr. Peters. Prospective users also include carriers in the U.S., which has so far eschewed the model, and Europe, where British Airways owner International Airlines Group is continuing to evaluate deploying used A380s at airlines within the group, he said.
“Our main goal is to find new lessees,” Gehling said. “Still, there are hardly any spare parts around when it comes to engines for A380s, so it may make sense to do a part-out for the first one or two aircraft returning.”
Airbus struggled to sell new A380s last year and has offered to revamp the model with fuelsaving winglets and 80 extra seats, on top of the standard 550, to improve its appeal. Boeing last month dropped the very large aircraft category from its 20-year forecast, saying it sees no long-term future for either the Airbus plane or its own 747.
An Airbus spokesman said that the Toulouse, Francebased manufacturer remains confident in the market for second-hand A380s.
While the remarketing of the A380s due off lease is being done in conjunction with Airbus and Doric, which owns another Singapore Airlines plane, Dr. Peters has also engaged Sparfell & Partners to seek potential VIP customers for its four aircraft, with the Swiss re-seller advertising them on its website as Air Force Onestyle “head of state” transports.
For investors, parting out A380s — which had an original list price of about $250 million when they were bought, before discounts — should offer a decent return, Gehling said. After 10 years, the planes typically would have earned back 65 percent to 70 percent of their outlay and would need $55 million to $60 million more now to break even. An A380 could yield up to $120 million in components.