The A380 double decker is a
"Heavy's-Heavy" in Airline parlance. Orders are stuck at three in the
last year. BA looks for used A380's out of its affordability factor. They can't
afford a new A380 for its business model. Return on Capital investment is a
high risk. Singapore Airlines is interested in trimming its fleet of A380's
through selling some inventory, others are not far behind. New purchasing
schemes are for used A380 purchases, and not for new A380's. Leasing used
equipment from a lessor is the new mechanism for airline profitability.
Aviation is entering into the Jurassic Period for These Two Dinosaurs
It is not
so dismal as it sounds, but it makes the case. Airbus made a corporate mistake
building the A380 program. It brought the 747 program to its finality, but its
freight program lives on! The A380 canceled its freight version, as it was
engineered for carrying mass number of passengers, and is not an efficient
freight hauler for its heavy empty weight or high price. The 747-8F does an optimal
job for its frame configuration that an A380 can't provide.
A dismal
outlook for the A380 purchasing is coming into view. The heady days of those
initial first A380 orders have passed. In fact the backlog sits at about 179
A380's out of 317 ordered. The handwriting is on the Boeing wall as the 747-8 has
dropped to six aircraft per year from a build rate of about 12, 747's built during last year.
Without orders soon the A380 will also go the way of the 747-8. Freight orders will keep the 747 on life support. The A380 has no freight answers. Airlines have enough A380's in service, which is now creating a used market, as airlines shape its fleet size for actual operational efficiency and need. Thus, a used A380 market emerges from these fleet trimmings, as airlines seek a used but new to its fleet expansion program.
Without orders soon the A380 will also go the way of the 747-8. Freight orders will keep the 747 on life support. The A380 has no freight answers. Airlines have enough A380's in service, which is now creating a used market, as airlines shape its fleet size for actual operational efficiency and need. Thus, a used A380 market emerges from these fleet trimmings, as airlines seek a used but new to its fleet expansion program.
The A380
is too expensive for most operations when considering a new order for Airbus.
The 179 yet to be delivered A380's creates a market glut when the real market has
matured, and a used A380's market emerges coming from fleet adjustments as it provides the supply side, and other top tier airlines provide the demand like the late arriving BA A380 need. The Heavy's-Heavy is sorting out its market on passenger traffic alone.
The news
this week is about the 747 losing ground on production output as its backlog
shrinks to a worrisome level. The passenger niche for the 747 is too small, and
its freight version has filled the world’s leading freight purveyors with the
747-8F. Boeing would like to keep the program building until the next 747-8F
round of orders can be amassed. Albeit, in a small niche, it is very profitable
for Boeing nursing its 747-8F program along.
However, Airbus will never recoup its capital investment with the A380 program.
However, Airbus will never recoup its capital investment with the A380 program.
The fate of
both the 747 and A380 points towards doom. The shelf-life for Airbus will be a lot
shorter than Boeing's 747 build period. Boeing has built the 747 since 1971, a
forty-five year period. The A380 will be lucky to make twenty years for
building its A380 until it will shut it down by 2028. Airbus is only a five years away from a Boeing like production rate for its heaviest of heavies, by making only an even dozen a year.
Extra: Comments to "Randy's Journal" from Winging It, as posted:
Extra: Comments to "Randy's Journal" from Winging It, as posted:
"Randy, the freight market is bracketed by
various aircraft types all seeking efficiency that will make freight operations
profits. There are several defaults with the market that has emerged. The 767
for the parcel industry. The 777 for a broader range of product addressing both
parcel and pallet handling with a bulk capability. The 747-8F however, stands
alone. As you alluded to it there is not a competition.
It covers the spectrum from parcel, pallet
and large bulk transporting. The convertibility for freight shipments is off
the charts for the Boeing 747-8F. There is no match. The used market will
exhaust the inventory in the next four years. The Russian, European and older
US made freight products become less available to the industry. Boeing has
positioned itself to capitalize on the freight industry superbly. Your readers
should buy stock on the 747-8F family function as it will become a great
compliment to the "serious" air freight airlines, having the 767,777
and 747 inventory for its freight business.
Congratulations on having a great family of
long-haul Freight aircraft. It will make our world a better place. The 747-8
has a very much needed place going forward."
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