Dubai Air Show

Airbus predicts new wave of orders for sluggish A380

 - November 6, 2007, 6:03 AM

Introduction of A380 flights is being seen by Airbus as a precursor to “a new wave of orders” for the airliner. The European airframer’s Asia Pacific executive sales vice president, Edouard Ullmo, said earlier this year there likely would be a hiatus as prospective A380 operators considered the aircraft’s initial operations with Singapore Airways (SIA) before choosing between it and the Boeing 747-8I (or the smaller 777). Apparently in anticipation, in late September British Airways (BA) committed itself to 12 A380s, in the process securing delivery positions ahead of any new orders.

Major carriers not yet committed to future high-capacity long-haul equipment are Asian carriers Cathay Pacific, All Nippon Airways (which could plump for the 777 to join its Boeing 787s, for which it is launch customer) and Japan Airlines, and U.S. operators Northwest Airlines and United Airlines. Decisions are not expected in the short term, although February’s Singapore Air Show might prove an irresistible opportunity for at least one Asian operator to speak up.

In west Asia, established Boeing operator Air India–recently merged with Indian Airlines–has been negotiating with Airbus and Boeing but reportedly favors the A380. The newly combined operation is awaiting delivery of more than 100 aircraft (of all sizes) previously ordered by its predecessor constituents to add its current total fleet of 110 aircraft.

Despite well-chronicled troubles with initial A380 final assembly, none of the 13 passenger-airline customers jumped ship–seemingly confirming industry recognition of the aircraft’s potential to provide much-needed higher capacity and reduced seat-mile costs. In fact, the first three operators–SIA, Emirates and Australia’s Qantas–are buying additional aircraft.

Perhaps the real test is how many current 747-400 operators Airbus can wrest from Boeing. After many stillborn attempts to develop a “new improved” variant, Boeing finally came to market with the -8I version with about 50 more seats and new more environmentally friendly engines.

Given the historic loyalty of its customers, Boeing will expect to retain many of them, if not most. Of 19 carriers flying more than ten 747-400 passenger variants, Germany’s Lufthansa is alone in having adopted the 747-8I after having ordered the A380. Eight of these operators have chosen A380s rather than more 747s, the rest having so far nailed their colors firmly to the fence.

Meanwhile, Airbus expects to ship 13 A380s in 2008, 25 the following year and 45 in 2010–equivalent to almost one a week. Deliveries during 2008-10 are covered by firm orders (or options let by Airbus), suggesting that no positions are available for Ullmo’s prospective new customers until 2011.

With the predicted increase in production, A380 equipment and systems suppliers are gearing up for higher manufacturing rates. Two months ago, wing-maker Airbus UK put its production force on notice to begin ramping up production with a resumption of its shift system after a period of day-work as Airbus cleared its backlog of rework on A380 electrical systems.

Earlier this year, John Leahy, Airbus chief operating officer for customers, spoke of “a lot of interest” in the A380 and expectations of business from at least two new customers during 2007. With BA now comfortably on board, this week here at Dubai, another carrier–possibly another Boeing scalp–could be added. Watch this space.