The story of the big jets is also a story of Boeing and Airbus — two giants who, when faced with the same market conditions, developed very different strategies. In the 1970s, when the Airbus predecessor Aerospatiale/British Aircraft Corporation saw a future in supersonic flight, Boeing looked to build jumbo jets. In the early years of this century, when Airbus saw a future in moving high volumes of passengers through mega-hubs, Boeing envisioned direct point to-point travel in mid-size aircraft. Europe bet on the Concorde and the A380 while Boeing tied its future to the 747 and 787 Dreamliner. While this can be a story of nostalgia for the much loved 747 — known as ‘The Queen of the Skies’ — there is an increasing focus on the future of the A380 just 10 years after its first commercial flight. With over US$30 billion invested in development, can such a short lifespan be seen as a success for Airbus? And at what point does Airbus call it quits and shift its resources into making a product suited for the times instead of one that is reportedly not selling enough to be profitable?
The era of the Big Jet arrived on 22 January 1970 when the first commercial flight of the Boeing 747 left New York bound for London operated by launch customer Pan Am. The 747 ushered in the era of affordable airline travel that until then had been the preserve of the wealthy and powerful. While a spacious cabin is taken for granted in long-haul aircraft today, before the 747, airline travel was commonly described as like flying in a cramped metal tube. Interior designers were let loose on the spacious upper deck to design bars, lounges and grand pianos, extravagances replicated today in the form of residences and private cabins.
Long-haul airlines such as Pan Am, British Airways, Singapore, Cathay Pacific and Qantas, embraced the 747 and used the new aircraft to take upwards of 350 passengers across oceans and continents with fewer transit stops and reduced journey times in comfort and space. The 747 changed the face of world travel; it facilitated airline growth, opened up new tourist markets and made flying accessible to the masses. The 747 fleet may be coming to the end of its reign as ‘The Queen of the Skies’, but what a proud and productive reign it has been, a rare combination of beauty and strength.
As the retirements increase, many long-time operators are giving the 747 a momentous send-off while others are retiring them with little or no recognition, sending them to a desert boneyard to bake in the sun. Cathay Pacific celebrated its final 747 passenger flight in October last year and the final two American users, United and Delta, are also pulling down the curtain in style.
United Airlines made its first commercial 747 flight on 23 July 1970 from San Francisco to Honolulu so it was fitting that when the final 747 departed on 7 November 2017 it was from San Francisco to Honolulu. On arrival, a huge 30 metre orange lei was draped across the nose and passengers were greeted with Hawaiian music and hula dancers. No doubt Delta is planning a memorable time on its final flight from Detroit to Seoul on 15 December.
Aviation consultancy, IBA estimates that there are 171 747- 400s and 35 747-8is currently active with 35 operators, the major ones being British Airways with 38, Lufthansa with 32 and Korean Air with 14. They also report that there are 161 747-400s already retired and 70 aircraft will go off lease between now and 2029. Mike Yeomans, the head analyst for commercial aircraft and leasing at IBA, told Asian Aviation the future prospects for the leased 747s are that they will either be dismantled or enter long-term storage and parked indefinitely when returned off lease. He said: “For most of the parked aircraft, parting out is a likely scenario. However, with so many part-outs the market will be flooded with spare parts. As such many aircraft will be resigned to long-term desert storage.”
The largest 747 operator, British Airways (BA), has announced it will withdraw its last 747 in 2024 with half the current fleet withdrawn by 2021. BA’s chief financial officer, Steve Gunning, told investors that the new generation of aircraft were 30 percent more fuel efficient than the 747s and the airline was expecting a US$196 million annual fuel benefit over the next five years.
The good news for BA passengers is that 18 of the 747s have completed a major makeover to give them the same look, feel and technology available on the A380 and the 787. Qantas has also refitted their remaining 747s, which will fly on as the airline transitions into their new Dreamliners.
In 2000 Airbus approved the go-ahead of the A380 superjumbo with an initial budget of US$11 billion. Seven years and US$30 billion later, the first A380 was delivered to Singapore Airlines. This aircraft made the first commercial A380 flight in October 2007 from Singapore to Sydney and that same aircraft has just been returned to its owner and parked in storage in France only 10 years after its maiden trip.
The A380 is a joy for long-haul passengers to travel in and brought much excitement to the aviation world when it entered service in 2007. And yet here we are only 10 years on with its imminent demise being predicted and obituaries coming from all directions. Airbus looked at the forecasts of exponential passenger growth and growing airport slot congestion to come up with a future that would see the rise of international traffic through major hubs, a scenario the A380 would fit perfectly.
Airbus told Asian Aviation that 218 A380s have been delivered to 13 operators since its introduction in 2007, with most of these operators within the Asia-Pacific region. Airbus went on to say that over 180 million passengers have enjoyed the A380, 240 airports can accommodate the aircraft and it makes over 300 flights per day. When asked about the future of the A380, the Airbus spokesperson said “the A380 is here to stay and is the aircraft of the future. With passenger traffic doubling every 15 years, the A380 is the solution for sustainable growth. It can help decongest airports on the growing number of high volume, high traffic and heavily travelled routes, many of which are in the Asia-Pacific region.”
Regarding Asia, Airbus said: “Some 99 percent of future long-haul traffic will be between mega-cities, many in the Asia-Pacific region. Today 54 percent of A380 capacity is from, to or within the Asia-Pacific region and 18 percent are on regional flights within Asia. High demand and congestion means that this region, in particular, needs the A380.” So it would seem that the Airbus view of the A380 and where it fits in the market has not changed much since 2000 when the project was given approval by the board.
A look behind the figures shows just how precariously balanced the future of the A380 actually is. Of the 218 aircraft in service, 100 are flying with just one airline, Emirates, which has built its business strategy around the A380 mega-hub model. Emirates is also the lifeline keeping the A380 in production. While Airbus reports an order backlog of 98 planes, it is widely accepted that apart from 42 ordered by Emirates, few other orders can be classed as firm.
Emirates welcomed its 100th A380 at a special ceremony on 3 November and the airline’s chairman, Sheikh Ahmed bin Saeed Al-Maktoum, said “for Emirates, the A380 has been a success…We remain committed to the programme and will work closely with Airbus and our partners to continually enhance our A380 product as we look ahead to receiving our remaining 42 aircraft on order.” It was expected that Emirates and Airbus would confirm an additional A380 order at the Dubai Air Show in November, but this did not materialise and judging by the comments of Emirates’ president, Tim Clark, the two parties have a way to go to reach agreement. Clark said, “The undertaking Airbus will have to make is that the line will continue for 10-15 years and that a further commitment (by Emirates) would not be at risk.” The airline and the Dubai government want absolute certainty that Airbus will continue building A380s for at least that period before committing to any future orders.
It is also clear that the A380plus option offered by Airbus, which includes removing the large forward staircase and adding more economy seats, is not a hit with Emirates. Clark said, “we would rather they just offered us the continuation of the line.” When your (almost) only customer tells you they want no change, it is hard to understand Airbus pushing a new version.
In effect, it is Emirates which is controlling the future of the A380 and not Airbus. At a planned production rate of eight aircraft a year, there is less than six years of production left unless Airbus is able to find other customers as demand for aircraft travel increases, particularly in slot-congested Asian markets.
A loyal supporter is Singapore Airlines, which has committed to maintaining its A380 fleet at 19 by replacing five of its oldest aircraft with new A380s and returning the older aircraft to their lessors. Singapore recently launched new premium cabin layouts and will be retrofitting these to the 14 aircraft they own over the next three years and thereafter will have a common configuration on all their A380s. CAPA Analysis reports that Singapore’s A380 capacity will increase by 14 percent and puts the cost of the retrofits at around US$850 million. CAPA also notes that Singapore has no intention of increasing the A380 fleet beyond the current 19 and that they are likely to keep their owned aircraft for more than 15 years due to a lack of resale options.
Yeomans, the IBA analyst, said “if the early Singapore redeliveries are an indicator of secondary market demand, then the A380 will be difficult to place. In IBA’s view, the market will not be able to absorb A380 aircraft en masse so the commitment of key carriers (mainly Emirates) to continue operating the aircraft will dictate the fate of the A380 programme. He added: “With a largely untested secondary market and limited operator base, residual values are likely to be weak.”
Just as they were born in very different times, the big jets are now being seen as heading for later life with quite different contributions. The 747 is being venerated, making final appearances cast in period costume with curtain calls and champagne flowing as befits such a beautiful and tireless contributor. It will live on as the 747F for many years to come as a cargo carrier shifting the boom in online purchases — an aircraft born in the 1970s serving the e-commerce needs of the 21st century.
The run of the A380 was expected to be in full swing by now, but with few orders to make and a growing fractiousness with its main customer, its demise is being openly reported only 10 years on from its first commercial flight. The era of the Big Jets may be fading, but with the huge growth in airline traffic predicted between now and 2035, it is just possible the A380 might be able to carve out a new niche in high-volume, point-to-point routes that may not even exist today.
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