Used A380 Super Jumbos Posing Threat To Airbus Efforts At Reviving Sales

Even as Airbus is struggling hard to acquire new customers for its biggest commercial jet A380, the used super jumbos are hitting the market and threatening the Airbus Group's grand plans at reviving sales of its flagship superjumbo. In June, Malaysia Airlines said it would dispose off two of its six A380s, while two from Skymark Airlines are also seeking new owners. Thai Airways wants to sell its six A380 planes, all less than 3 years old. For the buyers, the advantage is that used A380s will cost only a fraction of the plane’s $428 million list price.

Airbus admitted that it could not find a new airline customer in 2015 and needs to sell at least 30 pieces a year to stay viable. Many of the oldest A380s are also poised to come off lease. The Singapore Airlines is flying five of them, which is the model’s first operator. Post-lease they will be offered to other carriers by asset-management firms. The A380 has a capacity to seat about 540 people in three classes. Being too large, it is preferred for the densest routes or carriers which pack passengers onto fewer flights because of a lack of airport slots.

Official Plays Down

However, Airbus Chief Operating Officer John Leahy tried to play down the threat from secondhand A380s. He said second hand stuff will be attractive to those buyers who would otherwise opt for a smaller and less costly plane like the Boeing 777. “Used A380s do not compete with new A380s,” Leahy said.

Dubai's Emirates, is the only airline which ordered 140 super jumbos to feed inter-continental traffic through its hub in Dubai and made the large commercial airliner a central part of its fleet.

To Miss Target

Meanwhile, Airbus President Fabrice Brégier stated that its planned sale of first A380 to the Russian carrier Transaero Airlines will be delayed. He said the “probability is high” that the client’s financial difficulties will delay the delivery, reports The Wall Street Journal. “We have to face reality; when we have a customer who is really facing commercial issues, hopefully temporarily, but based on the ruble devaluation and the Russia tourist market shrinking, we need to look at what can be done,” Brégier said in an interview. Transaero had ordered four A380 superjumbos.

Airbus had promised its investors that it would stop losing money on the Dreamliner plane that took off a decade ago. Huge cost over runs caused by long delays in building the plane raised production costs and slowed down Airbus efforts to build the plane more economically. Airbus was hoping to reach break-even in 2015 with the sale of 30 pieces.

But Airbus has a long haul to win additional A380 superjumbo orders as many airlines have already stepped back. Malaysia Airlines Chief Executive Christoph Mueller said two of the airline’s six A380 jets are “surplus to requirement.” Virgin Atlantic refused to take the six A380s it has ordered. For Emirates Airline President Tim Clark, which is the top customer for A380, Airbus needs to modernise the double-decker plane with new engines. But Airbus president Brégier said the A380 Neo, the updated model is “not a priority right now."

(For feedback/comments, contact the writer at k.kumar@ibtimes.com.au)