- Airbus says it will end production of its A380 superjumbo in 2021.
- Airbus made the announcement after Emirates lowered its commitment to the A380 to 123 aircraft from 162.
- According to the aviation analyst Richard Aboulafia, only 17 A380s are left to be delivered to airlines — 14 to Emirates and three to ANA.
- The end of the A380 program is good for Airbus in the long run, Aboulafia told Business Insider. It will allow Airbus to concentrate its efforts on more important and lucrative segments of the market.
On Thursday, Airbus announced that production of its flagship A380 superjumbo airliner would end in 2021. The European aviation giant made the decision after Emirates, the aircraft’s most loyal customer, decided to reduce its A380 order to 123 planes from 162.
"As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years," Airbus CEO Tom Enders said in a statement. "This leads to the end of A380 deliveries in 2021."
Even though the A380 proved to be immensely popular with travelers, its size and expense made the plane persona non grata with airlines.
"The market wasn’t there, and I never understood why they launched it," the longtime aviation-industry analyst Richard Aboulafia said in an interview with Business Insider. "Big is not good."
"If you’re looking for international long-haul aircraft, you want 250 to 300 seats," he added. "That’s what the markets want, and there doesn’t appear to be a lot of deviation from that."
The A380 usually flies with 470 to 600 seats.
AirbusThe latest tally from Airbus shows that it has delivered 234 A380s to customers, including 109 to Emirates.
Aboulafia, the vice president of analysis at Teal Group, said there were only 17 undelivered A380s left before Airbus would shudder its production line in 2021. Of those, 14 are designated for Emirates and three for Japan’s All Nippon Airways.
The analyst says Airbus made the right call to bring the A380 program to an end.
"Rip off the Band-Aid — it feels better that way," he said. "With this out of the way, they can take advantage of all of the other market segments with their far more important products."
Specifically, the end of the $25 billion A380 program allows Airbus to concentrate its time and resources on other more lucrative segments of the market like its hot-selling single-aisle A320neo family of jets or a clean-sheet middle-of-the-market aircraft to bridge the gap between its large single-aisle jets and its smaller twin-aisle offerings.
The A380’s loss is the A330neo’s gain
One of the positives to come from the end of the A380 is the shot in the arm Emirates gave to the underperforming A330neo program.
The Dubai, United Arab Emirates-based airline announced an order for 40 A330neos, an updated version of the popular A330ceo airliner.
AirbusSales have been hard to come by for the A330neo, with several potential suitors opting for the rival Boeing 787 Dreamliner. Apart from Delta, AirAsia, and TAP Portugal, few major airlines have gone for the plane. Last year, Hawaiian Airlines canceled its A330neo order in favor of the Dreamliner. One of the reasons cited by Hawaiian’s CEO was the lack of market acceptance for the Airbus.
The A330neo’s reputation is certainly bolstered by the addition of Emirates to its customer base. "It helps a lot," Aboulafia said.
Does the end of the A380 program mean Airbus is out of the business of big twin-aisle jets? For now, yes.
"Right now, no one wants a bigger twin-aisle, but in a few years, they aren’t going to want to cede the market to the Boeing 777-9X," Aboulafia said. "They’ll do a growth version of the A350-1000."
The Boeing 777-9X is expected to enter service in 2020. With the discontinuation of the A380 in 2021, the 777-9X is set to be the largest passenger plane in production.
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