BOOM AND BUST AS A380 PRICED OUT

WHEN Airbus launched the A380 back in 2007 it was heralded as the future of air travel.

The giant of the sky – the world’s biggest passenger jet – was expected to help reduce congestion at airports by allowing airlines to fly more people per flight.

Airbus quite literally bet big on the plane with the overall project cost estimated at £20bn.

The plane is able to carry around 550 passengers – although can fit in more – and it was targeted at the growing Asia and Middle East markets.

There was an initial glut of orders – led by Dubai-based Emirates, who went on to become the A380’s biggest customers.

Unfortunately that same airline has now caused the plug to be pulled on the programme after its decision to cancel 39 of the remaining orders.

Why did it fail? While the plane – dubbed a “hotel in the skies” with bars, beauty salons and shops – was a hit with passengers, it became a hard sell to airlines.

Willie Walsh, boss of British Airways-owner IAG, suggested that while the plane was good, it was too pricey – with each plane costing around £350m at list prices.

On top of this there has been a hike in fuel prices since 2007 – adding to the cost of running the four engine jets.

Qatar Airways Group CEO Akbar Al Baker said while the plane was a game-changer “it came at the wrong time with the fuel prices skyrocketing after its introduction”.

This meant it was only profitable for airlines when planes were at or close to capacity – and with 550 seats to fill this was only possible on the busiest air routes.

Since its launch Airbus and Boeing have unveiled smaller but more efficient planes, like the A350.

This has meant that while orders started well they soon trailed off.

As of January, Airbus had secured orders for 313 jets, of which 234 had been delivered.

Since 2005, a total of 57 firm orders for the A380 have been cancelled by airlines including Emirates, Virgin Atlantic and Lufthansa.

Its target was to sell 700. Sebastian Zank, analyst at Scope Ratings, said: “Through a mixture of misjudgement, in overestimating the demand for supersize long-haul jetliners, and poor timing, in that high fuel prices exacerbated the inferior economics of fourengine wide-body planes, Airbus has struggled to find buyers beyond its launch customers.

“Maximising the efficient use of a multi-million-dollar asset like an aircraft is the key to running airlines successfully, and the A380 just hasn’t cut it.”