On February 14th, Airbus made the announcement that they were ceasing production of the Airbus A380, a four-engine jumbo jet that is still the largest passenger aircraft currently in operation. Capable of carrying as many as 853 passengers on two passenger decks, Airbus put a lot of time, effort, and resources into the aircraft, and that work paid off in some ways; it remains an engineering marvel that something so big was capable of actually flying. So what was it then that forced the demise of the Airbus after they’d invested so much into it?
Beginnings of the Airbus A380
Work on the Airbus A380 began as far back as 1988 when a team of engineers at European aerospace companies began to develop plans for an ultra-high-capacity airliner (UHCA) as Europe's answer to the iconic Boeing 747 aircraft. Introduced two decades earlier in 1969, the Boeing 747 was the largest passenger aircraft in the air and since it was introduced, Boeing's 747 had the market for UHCAs entirely to itself.
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With a range of around 5,620 miles, a cruise speed of 594 mph, and a maximum passenger capacity configuration that could seat 539 passengers, Boeing's first model 747, the 747-100, took time to catch on. Airports had to extend runways and build new hangars just to house it, but over two decades, the 747 proved to be a versatile design that Boeing could modify over time to suit airline needs.
Aided by the aircraft's ability to fly higher and longer than any other aircraft suddenly made international travel as pedestrian as domestic travel had become, launching a revolution in air travel that never really slowed down. Boeing's 747 became more than just a UHCA; it became a symbol of unprecedented American progress.
By 1988, Boeing's launch of the 747-400, with a non-stop range of 7,670 miles at maximum capacity and a maximum passenger capacity configuration that could seat 660 passengers, the 747-400 became an instant success, with Boeing eventually selling almost 700 aircraft to airlines around the world.
European companies were entirely shut out of this market with its fleet of smaller aircraft. They not only felt the Europe needed a plane that could go toe to toe with the 747-400; they wanted one. A European UHCA would be continental Europe's way of stepping back onto the world stage that many felt it had been pushed off of following the Second World War. Putting up a plane that could compete with or even dethrone the Boeing 747 was therefore an issue of pride for many in Europe.
In 1990, these companies announced that they were moving ahead with their UHCA project and a few years later, in 1993, Boeing and several European aerospace companies began a preliminary study of a combined effort to build a Very Large Commercial Transport (VLCT). Before long, however, Boeing started to voice concerns about the viability of UHCAs in the long term.
In an uncharacteristic moment of frankness between rivals in a fiercely competitive multi-billion dollar industry, Boeing all but warned these companies that the market for UHCAs had come and gone, strongly hinting to their rival that they could effectively rule out an aircraft 500-seats or larger ever being profitable.
For whatever reason, whether as a matter of pride or a matter of distrust in its rival, the European aerospace companies involved, which would later be absorbed into Airbus, said they would go it alone and build the VLCT aircraft on their own. Designating it the A3XX, over the next several years these companies would work together to outdo the 747 in every way they could, from technical achievement to the scope of its luxury amenities, eventually consolidating into the pan-European firm Airbus in the year 2000.
The Launch of the Airbus A380
In December 2000, the board of a restructured Airbus approved an €8.8 billion plan for the Airbus A380, with its prototype model completed in January 2005 and the first test flight completed in April of that year. Then, the plane began to run into trouble.
In June 2005, Airbus told customers that there would be a delay because of a wiring problem. Then, in February 2006, stress testing of the plane's wings found that the wing of the plane fractured at 146% of the required level, instead of the 150% level they had expected. The aircraft needed further reinforcing on the wings that added 30 kg to the plane.
There would be further delays in delivery, but eventually, the first Airbus A380 was delivered to Singapore Airlines, registration 9V-SKA, on October 15, 2007. Ten days later on October 25, the first commercial flight of the aircraft flew from Singapore to Sydney, Australia, with all the seats on board being purchased at an auction for charity.
After nearly 20 years of planning and development, the Airbus A380 was finally in the air and Boeing's 747 was dethroned as the largest commercial passenger aircraft in service. It had almost 50% more floor space than the 747 and 35% more seating capacity, so even as it was much larger its rival, its seats also featured more room than other aircraft.
In the 14 years that it's been in service, around 190 million people have flown in the Airbus A380 and by all reports, to fly on an A380 is a throwback to the early days of the 747, when this thing called commercial air travel was still new and exciting. Flying on an Airbus A380 is itself part of the experience and not just the thing that got you to where you were going in order to have those experiences.
The Demise of the Airbus A380
Unfortunately, Airbus was trying to sell the plane to airlines, not to passengers.
There were fixed costs associated with flying a plane thousands of miles, both in terms of maintenance as well as fuel. Smaller, lighter planes have lower per-flight-mile operating costs than the A380, which could cost anywhere from $26,000 to $29,000 an hour to fly. To defray that cost, the more tickets you sold, the better the odds are that you will make a profit on that flight.
It's a painful decision. We've invested a lot of effort, a lot of resources and a lot of sweat into this aircraft."—Tom Enders, CEO Airbus
The ceiling for profits on the A380 was much higher than a Boeing 787 Dreamliner, which seats around 200 passengers, but there is a certain number of seats that have to be filled, or else you are operating the plane at a loss. The same is true for all aircraft, but compared to the operating cost of the Boeing 787 Dreamliner, estimated to be around $11,000 to $15,000 an hour, profitability comes down to which plane could be consistently flown at full capacity.
“Filling up 600 passengers is relatively difficult for an airline,” says Bijan Vasigh, professor of economics and finance at Embry–Riddle Aeronautical University. “It’s much easier if you, for example, sell tickets for a 787 with capacity of, say, 200 passengers.”
“Airlines didn’t want to take the risk of selling 600 seats, and at the end only 60% of the seats are sold,” he adds.
In the end, of the 1,200 planes Airbus expected to sell at a list price of $465 million, they have only delivered 234 aircraft, nearly half of those to the Dubai-based Emirates; even then, with a configuration that seats around 500 people.
"It's a painful decision," said Tom Enders, CEO of Airbus, during a conference call with analysts reported by CNN. "We've invested a lot of effort, a lot of resources and a lot of sweat into this aircraft."
“But obviously we need to be realistic" Enders added, "With the decision of Emirates to reduce orders, our order backlog is not sufficient to sustain production."
For Europe, the cancellation of the A380 was an even bigger blow. The parts for the Airbus A380 were sourced from over 30 European countries and the construction of the aircraft provided well-paying European manufacturing jobs; 3,500 of which are now going to need to be relocated or even lost altogether.
The blow wasn't only material though. Michael Goldstein, who has been covering the slow demise of the Airbus A380 for some time, sums up the mood of Europe towards the Airbus A380: “In addition to being a point of pride for Europe reminiscent in some ways of America’s feeling about its Moon program, the A380 is a symbol for each airline that flies it. Who would argue that British Airways A380 aircraft, or those operated by Lufthansa, are not the flagships of their fleet?”