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🛬 Death of Aviation: Last Flight of the 747

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And so it begins.


Following closely on the heels of the recent death of the Boeing 747 Jumbo Jet, the Airbus A380 is now history also.  The death of the aviation industry has begun.


The rise and fall of the Airbus A380 superjumbo

    Airbus has ended its A380 superjumbo program.
    Due to a lack of orders, the future of the plane had long been in doubt.
    The very first commercial A380 journey flew under a Singapore Airlines livery in 2007.

David Reid   | @cnbcdavy
Published 6 Hours Ago
An A380 aircraft under construction at an EADS factory in Toulouse, France
Pascal Parrot | Getty Images
An A380 aircraft under construction at an EADS factory in Toulouse, France

The European plane maker Airbus announced an end to its A380 superjumbo program, just 12 years after it first took to the skies.

The future of the world's largest commercial jet-liner had long been in doubt after it became clear that it was heavily reliant on just one customer, the Middle East airline Emirates.

CNBC takes a look at the plane that was built to revolutionize air travel, but found that the skies had already moved on.
The business case

Built as a direct response to Boeing's 747, the A380 program was officially launched in June 1994. The European plane was seen as a big bet that air travel would become "hub and spoke," where large planes would carry out the first long leg to big airports before passengers would splinter off to their final destination in smaller jets.

While Boeing's 747-8 can carry around 470 passengers, the A380 holds at least 500 and has been configured by Emirates to carry as many as 600.

The plane's huge number of seats was seen as key in helping to free up the air traffic overcrowding at several big airports such as London's Heathrow, New York's JFK and Chicago's O'Hare.

Each plane is priced publicly at around $445 million although airlines negotiate steep discounts.

The plane takes to the skies
This photograph taken on January 7, 2014 shows a Singapore Airlines Airbus A380 approaching for landing at Changi International Airport in Singapore.
Roslan Rahman | AFP | Getty Images
The A380 is mainly built in a 1.6-million-square-foot assembly plant at Airbus' headquarters in Toulouse.

The very first version to fly took off from Toulouse in April 2005 and was first used commercially by Singapore Airlines in October 2007, flying between Singapore and Sydney.

British Airways, Air France, Emirates and Air China have all been among the A380's 13 different carriers although no U.S., South American or African airline has ever placed an order.

Customer feedback was positive as additional space, walk-up bars, and a quiet ride all pleased flyers. Airlines found they could charge a small premium on tickets as customers hunted for routes using the superjumbo.
What went wrong?

An Airbus A380 in Emirates livery.
Airbus' Global Market Forecast from the year 2000 predicted that 1,235 "very large aircraft" would be delivered to customers between 2000 and 2019. But as of January 2019, Airbus had received 313 firm orders and delivered just 234 aircraft.

The firm's lofty target was swiftly undermined by the arrival of more fuel-friendly offerings such as Airbus's own A350 or Boeing's 787 Dreamliner.

The smaller aircraft were lighter and could be run more efficiently as the expectation of a steep rise in passenger travel failed to materialize. It was also found that very few routes could operate the A380 at full capacity.

Timing does seem to have been a problem. As the A380 hit the world's runways, a worldwide liberalization of flight routes known as "Open Skies" was underway. This allowed airlines to downsize their planes and fly more regularly.

Added to that is the rise of the ultra long-haul flight. Airlines have asked both Boeing and Airbus to come up with planes that can haul passengers from one side of the world without stopping.
Freighter future?

Boeing's 747 has just celebrated 50 years in the air. Demand for that plane has also dipped sharply but it has found a new role as a freighter.

But a cargo version of the A380 is seen as unworkable for one reason — it is too big. The plane would reach maximum payload long before it's actually full. One estimate is that an A380 could carry 60 percent more volume than a 747 but only 28 percent more weight, thereby making it inefficient.

As a followup to this--

For some reason I came across this article and read it, mostly because I am as likely to ride about such an aircraft as I am to take up pole vaulting. You might get a kick out of it.

I flew 13 hours nonstop on the world's biggest passenger plane, the $446 million Airbus superjumbo jet, and it's about as good as economy can get

The A380 superjumbo jet is supposed to be a game-changer. I had to find out for myself. Harrison Jacobs/Business Insider; REUTERS/Eric Gaillard

While I'm sure there are planty of wealthy and business types to fill up first class and business, there's probably not enough money sloshing around to fill up economy class.


--- Quote from: Surly1 on February 14, 2019, 09:28:44 AM ---As a followup to this--

For some reason I came across this article and read it, mostly because I am as likely to ride about such an aircraft as I am to take up pole vaulting. You might get a kick out of it.

--- End quote ---

Looks a lot like the interior of a 747 in Economy, although I recall that as having 5 seats across in the center.  I only rode economy on a 747 once though, on my Honeymoon with the ex-wife.  All the rest of the trips were First Class down to Oz to visit with Dad the Pigman after the divorce.



 Airbus’s A380 failure ripples through its rivalry with Boeing in complex ways
Originally published February 14, 2019 at 6:20 pm Updated February 14, 2019 at 8:48 pm

FILE — An Emirates Airline Airbus A380 at John F. Kennedy International Airport in New York on June 12, 2014. Demand for the enormous A380 has fallen as traffic began to shift to smaller, more regional airports. (Michael Nagle/The New York Times)
Airbus's decision to terminate its A380 superjumbo jet program as of early 2021 may amount to good news for the company's future. For rival Boeing, while there is a silver lining for its large 777X jet some years out, near-term it could face loss of a big order.
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Dominic Gates By Dominic Gates
Seattle Times aerospace reporter

The Airbus A380 superjumbo jet is the largest airliner ever built, the pride of Europe, a majestic double-decker that thrills onlookers as it flies past and offers passengers unprecedented space and comfort. Now it’s also the biggest jet-program failure in Airbus history.

Thursday’s decision to end the program came after Gulf carrier Emirates canceled orders for 39 of the giant airplanes, leaving a backlog too small to sustain production beyond early 2021. Strangely though, it may amount to good news for Airbus’ future.

And for rival Boeing, while there is a silver lining some years out, near-term there could be negative impacts.

The blow to Airbus has complex implications for both manufacturers

    It comes with an accounting write-off of 463 million euros, or $523 million, marking at least an endpoint to years of losses for Airbus. However, the financial damage is limited because billions of dollars in European government launch aid will now be forgiven.
    The sting of the A380 blow will also be soothed by compensatory orders from Emirates for Airbus’ smaller A350 and A330neo widebody jets.
    Those new orders could have a secondary effect that damages Boeing, with those Airbus jets replacing an Emirates commitment for 40 similarly sized 787-10 Dreamliners that was never finalized.
    And counter-intuitively, Airbus believes that the forgiveness of the government launch aid loans that comes with the termination could give it a get-out-of-jail-free card in the case against it at the World Trade Organization (WTO)

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Boeing may have to content itself with the promise that the 777-9X will win new orders three or four years out after it displaces the A380 as the biggest plane in the sky.

Contrasting histories

The A380 failure is Airbus’ second jet-program disaster after the smaller widebody A340 program ended prematurely in 2012. In contrast, Boeing, despite enormous troubles with many of its airplane programs, in each case has struggled through to commercial success.

Airbus delivered just 377 of the four-engine A340s before it terminated that program. And after it delivers the final 14 A380s to Emirates by early 2021, the superjumbo program will end with just 251 deliveries.

In contrast, not counting the failed 717 inherited from McDonnell Douglas, none of Boeing’s first seven legacy jet programs, from the 707 to the 777, has sold less than 1,000 planes. (For the small, single-aisle 737s, make that 10,500 and counting.)

And Boeing’s eighth legacy jet program, the 787 Dreamliner, has already delivered almost 800 jets, with firm orders that will take it past 1,400 deliveries.

The starkest A380 comparison is with the venerable Boeing 747 jumbo jet, which just turned 50 years old and has survived through multiple improved iterations to the latest 747-8 model. At the end of January, Boeing had delivered 1,548 of these Queen of the Skies aircraft.

The 747 first flew in 1969 and the A380 in 2005. Astonishingly, Boeing should still be building the 747 when the A380 is gone.

Airplanes of the future

In an interview at the Farnborough Air Show in July, Emirates Chief Executive Tim Clark was still hoping to persuade Airbus and Rolls-Royce to upgrade the A380 with new, more efficient engines and improved aerodynamics including winglets.

He characterized the A380 as integral to “the bold and brave business model” of his airline, which flies huge numbers of passengers long-haul from its hub in Dubai. But he conceded that aerospace-efficiency improvements since the A380 was designed in the 1990s were “step changes that left the A380 behind.”

When he couldn’t get Rolls and Airbus to invest the money in improvements, Clark finally decided to drastically pare back his order. With Emirates effectively the sole customer left, Airbus pulled the plug.

“We have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years,” said Airbus chief Tom Enders.

Some 3,000 to 3,500 Airbus employees across Europe work on the A380. On Thursday, management offered the hope that job losses will be limited by increases in production on other programs, including the A320, the A330neo and the A350.

The agreement with Emirates replaces the 39 A380s it canceled with new orders for 40 A330-900neo and 30 A350-900 aircraft. The order for the slow-selling A330neo will be particularly welcome.

And these two orders may be bad news for Boeing, because it’s now widely expected that Emirates will pull out of a fall 2017 nonbinding commitment to buy the 40 Dreamliners.

The only potential silver lining for Boeing is that the demise of the A380 will stimulate orders for the forthcoming 777-9X, due to roll out of the Everett factory for the first time this month, and seating 400 to 425 passengers.

Emirates may compensate Boeing for nixing the 787-10 order by adding more to its current order for 150 of the big 777Xs. Boeing could certainly use a sales boost for the 777X, which have been stalled since its launch in 2013.

Doug Harned, an analyst with Bernstein Research, wrote in a note to investors Thursday that “with the decline of the A380 and no other 400+ seat airplanes on the horizon, the 777X will be the principal aircraft for large, long range routes.”

However, for now, this market for very large airplanes is slumped.

Emirates neighbor Etihad, the troubled carrier of Abu Dhabi, just cut its Airbus order by 42 A350-900s as part of a financial restructuring, and it is expected to defer or cancel part of its Boeing order for 25 777Xs.

“Nobody seems to want a bigger airplane right now,” said aviation analyst Richard Aboulafia of the Teal Group.

He said he expects that eventually the death of the A380 will be good for the 777X, as it becomes the largest airliner available.

“But it looks like the 777X will have to get through some thin times before it inherits that mantle,” Aboulafia said.

Subsidies and risk

The A380 failure also points to a large imbalance in the risk borne by the two airplane giants when they launch new jet programs.

The financial blow to Airbus of the A380 failure, while severe, is cushioned by not having to fully repay the government loans it used to help develop the A380. In contrast, a commercial failure of similar magnitude could potentially bring Boeing down.

It’s an argument Boeing has cited repeatedly in the U.S.’s case against Airbus at the WTO.

The U.S. claimed in its WTO filings that Airbus received a total of about $4 billion in launch aid for the A380.

According to the European Commission, between 1992 and 2010 the governments of France, Germany, the U.K. and Spain provided launch funding to Airbus covering three jet programs — the A330-200, the A340-500 and -600 and the A380 — amounting in total to 3.7 billion euros, or $4.2 billion.

The vast majority of that was for the A380 and in theory it should all be paid back with interest.

Last May, the WTO ruled in a final decision that Airbus had failed to fix the harm to Boeing from both the A380 and subsequent A350 launch aid. Since then, Boeing’s lawyers have filed motions to impose sanctions on Airbus.

The crux of the WTO ruling is that the government loans to Airbus for those two jet programs were not granted on standard commercial terms.

For Boeing, it’s always been a key point that since the repayments are a fraction of the profit on each delivery, once deliveries end, no more repayments are due and the rest of the loan is forgiven.

Excluding the enormous costs of development, Airbus says it “broke even” on production costs of the A380 in 2015, which means it would have begun then, as it booked a small profit for each airplane, to make the initial, small repayments on the launch aid loans.

However, when lack of demand forced Airbus to cut the planned production rate for this year from 12 to just six airplanes, CEO Enders conceded that “at six per year, we are losing money. That is very clear.”

So A380 repayments have stopped and there won’t be any more.

Aboulafia, speaking Wednesday on the sidelines of the Pacific Northwest Aerospace Alliance annual conference in Lynnwood said, “You can’t talk about a loan being on commercial terms if you are indemnified against failure.”

The termination of the A380 “gives Boeing a strong moral argument,” he added.

However, because the WTO lacks any teeth to enforce its rulings, Aboulafia said he’s pessimistic about any impact on the case against Airbus that has already dragged on more than 14 years.

“I don’t see anything enforceable coming out of this,” Aboulafia said.

Going further, the European Union is expected to file a formal motion declaring that the A380 cancellation satisfies its duty to comply with the WTO panel’s ruling.

That’s because when Airbus’ A340 loans were forgiven after that program was canceled, the WTO panel ruled that the A340 subsidies were ended and no longer relevant to the case.

A person close to the WTO case on the European side who spoke on condition of anonymity ahead of formal motions being filed, said that almost all of the sanctions against Airbus that Boeing’s trade lawyers have called for “hinge on future sales of the A380,” sales campaigns that are now dead.

“The WTO is interested only in future market effect,” the person said. “The market effect of a stopped program is zero. What remains of their sanctions case ended this morning.”

Boeing declined to make anyone available to discuss the impact on its WTO case.


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