The big one

Airbus pulled out all the stops to make the A380 reveal a unique event. Now, airlines have to firm up their plans for the planes, while the manufacturer hunts for yet more sales.

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By  Neil Denslow Published  February 8, 2005

|~|a380_m.jpg|~||~|On the 18th of last month, Airbus’s big day — the biggest day ever in civil aviation — finally arrived, as the company unveiled its first A380. Middle East airlines were well represented at the event in Toulouse, as three Gulf carriers, Emirates, Etihad and Qatar Airways are among the 14 airlines to have placed firm orders for the orders. The heads of all the carriers were among the 100s of guests at the rollout, and they all hinted at their plans the aircraft. Despite the long list of statistics that were regularly pumped out by Airbus in the build-up to the rollout, seeing the A380 up close still takes one by surprise. It is well known that the plane boasts 49% more floorspace than the Boeing 747-400 and 35% more seats. One also knows that the aircraft is the height of a seven-storey building, and that 70 cars can park on the wingspan, but this still does not prepare one for its sheer enormity in person. Instead, on initially viewing the plane, the only thing anyone can think is how on earth will something this big get off the ground? However, it will certainly achieve this, and the main focus of speculation now is what the 12 airlines that have ordered passenger versions of the aircraft will do with the interiors of their planes. Most of the CEOs present in Toulouse were somewhat guarded in their responses to questions about this, but all of them promised that the room onboard the aircraft would be given over to extra services rather than crammed full with passengers. Etihad Airways, for instance, which has ordered four A380s, and which is expected to announce its engine selection soon, said it would have a final configuration of 506 seats in three classes. The airline also promised a range of onboard facilities, including bars. “We want to make flying more luxurious, and we want to focus on high-yield passengers,” said HH Dr. Ahmed Bin Saif Al Nahyan, chairman of Etihad Airways. Qatar Airways, which has placed firm orders for two A380s and taken options on two more, also promised that its aircraft would give passengers greater levels of onboard comfort. The carrier will seat no more than 490 people in its aircraft, which are due to arrive in 2009. “Though we are four years away from taking delivery of our first A380, we are already working on creating spectacular interiors to make it an experience of a lifetime for our passengers,” said Akbar Al-Baker, CEO of Qatar Airways. “We believe in luxury for our passengers… and our aircraft will have innovations that other airlines have not thought of yet,” he promised. Although details on what these innovations will be have not yet been released. Emirates, which is by far the biggest customer for the A380 with 43 orders including two freighters (and a deal to lease two more A380s from ILFC), was a little less tight-lipped about its plans. It has stated that it is planning to install showers and lounges onboard its planes and, Tim Clark, president of Emirates Airline, promised ‘innovations not seen elsewhere on civil aircraft.’ However, full details will not be released until ‘later in the year,’ which, presumably, meant at the Dubai air show in November. The carrier has announced some parts of it plans for the A380s, including the selection of Matsushita Avionics Systems’ ex2 inflight entertainment system and the signing of a US $80 million deal with B/E Aerospace for first class seat pods. The airline will also set up its superjumbos in three different configurations. The most spacious for passengers will be the long range/low density configuration, which will seat 489 people in three classes. Then there will be a medium range/low density set-up, consisting of 517 seats in three classes. The densest configuration will be a two-class 649 seat arrangement. Emirates is making use of these different configurations firstly because it has enough aircraft to justify a variety of set-ups and also because it will fly the planes to a wide number of destinations that will offer different types of passenger mixes. “The A380 will appear everywhere on our network,” said Clark.||**|||~||~||~|The other passenger airlines that have ordered A380s are also promising similarly luxurious configurations of around 500 seats, dispelling suggestions that 800+ people would be crammed inside the plane. Air France, for instance, which will receive the first of the 10 aircraft it ordered in April 2007, is intending to carry 538 passengers, with nine in first class and 80 in business. Singapore Airlines, which will be the first carrier to fly the A380, is planning less than 500 seats in each of its 25 superjumbos, while Qantas will fit 501 seats in its A380s. The Australian carrier has also outlined plans for onboard lounges for all classes and facilities for business meetings and presentations. The most outlandish plans so far though, have come from Virgin Atlantic, which has six A380s on order. At the Toulouse event, Sir Richard Branson, the chairman of the airline, stated that the carrier would install a host of facilities on its planes, including gyms, bars, 35 double beds and a casino. “We will seat no more than 500 passengers, so we can create a really special product,” said Sir Richard. However despite the razzmatazz and celebratory atmosphere at the Toulouse event, there is still much to be done before the A380 can enter commercial service, let alone be called a commercial success. On the one hand, there is still a host of tests to go through — including the maiden flight, which is scheduled for March — before the aircraft can fly its first revenue service. Work also needs to be done at major airports around the world so they can handle the aeroplanes. Airbus is confident that airports will be ready to deal with the A380 once it enters commercial service, but one or two snags have already appeared. Within the region, Dubai’s preparations for the arrival of the A380 are well advanced. Terminal 3, which is currently under-construction, will have 23 A380-compatible departure gates offering two storey access onto the plane. There will also be a business lounge for 500 people, which will offer direct access onto the upper deck of the planes. Other airports in the region that will host A380 operations have made less progress on development work though. Abu Dhabi International Airport had finalised designs for a wide-reaching expansion, which included A380 support, but these have now been scrapped and new, bigger plans are being drawn up. In Doha, delays in constructing the new airport have forced Qatar Airways to push back the delivery dates for its A380s to 2009. However, this is unlikely to have any wider repercussions, as no other airline has expressed any interest in flying an A380 to the airport. By contrast, possible hold-ups at Los Angeles were a concern to a number of carriers, particularly Virgin Atlantic, which cited the delays as a reason for postponing the delivery of its A380s. However, the problems at LAX have now been overcome and work on expanding the airport is expected to begin this year. In general though, Airbus is relaxed when it comes to airport-readiness, highlighting the fact that comparatively few airports need to be A380-compatible. For instance, according to the manufacturer, currently 80% of Boeing 747 flights are between just 37 airports, and these are the ones that will need to handle A380s. However, because the A380 fits in the same size ‘box’ as the 747-400, and has shorter landing and take-off requirements, the airports do not have to do too much work. Furthermore, they also have plenty of time to undertake what needs to be done before the first A380 arrives. “Airports know when the aircraft will be flying and they are working to that date. We are confident that they will be ready, and that they can make the changes that will be necessary by then,” said Thomas Bürger, senior marketing analyst, A380 customer affairs, Airbus. “Most of the airports we want to fly to are already dealing with the issues,” agreed Clark of Emirates.||**|||~||~||~|The pressure is also offset by the fact that not all airports need to be ready by the time of the first commercial flight, by Singapore Airlines in early 2006. “It is going to be a staged rollout,” noted Bürger. “You are not going to have 149 aircraft on the scene at the same time, so some airports do not need to be ready until 2008, for instance.” “However, we are looking at introducing 10-15 new airports a year that will be ready for A380 service,” he added. “Eventually, I would say we will have in the region of 60 [A380-compatible airports] around the world, maybe rising to 100 in the not too distant future.” The more important question for Airbus over the longer term is whether the A380 will prove to be a commercial success. This will directly relate to sales, with 250 seen as the magic breakeven number. At present, the manufacturer has secured 149 firm commitments, with the latest coming from UPS, which ordered 10 freighters with 10 options in early January. As Aviation Business went to press, media reports suggested that China Southern would also sign up for five of the planes before the end of January, which would raise the total of firm orders to 154. This is clearly progress, but the manufacturer is still some way short of 250 firm orders. However, the manufacturer notes that adding in agreed options brings it close, and the company is expecting to hit 250 sales by 2008. In order to be considered a commercial success, Airbus will need to top the 500 sales mark. To do this, the manufacturer will need to secure more orders from both existing customers and new customers. Finding more airlines to sign up may prove tricky in the short term at least, as Airbus has already sold the plane to most major airlines that have the money and requirement for such capacity. Another one or two Chinese airlines may place new orders, but beyond that it is hard to see where new orders will come from, despite the noticeable absentees at Toulouse. There were, for instance, no North American majors among the launch customers, but none of these have the resources to buy large planes at present. Similarly, Japan’s airlines were notable by their absence, but these carriers have long been among Boeing’s staunchest customers. Furthermore, despite seeming to have the finances and requirements for A380s, British Airways has also re-affirmed that it has no interest in the plane at present. “Buying new aircraft is the single biggest capital outlay for any airline, and it is not something we do simply to keep up with the Joneses,” BA’s chief executive, Rod Eddington recently wrote in the airline’s staff newspaper. Existing customers are therefore likely to be Airbus’s main focus for future sales over the next few years. These carriers are also likely to be receptive, as they will have already invested in the A380, and many have options in place that they are looking to quickly exercise. At Toulouse, both Virgin and Lufthansa, for instance, were among carriers talking about more orders to come soon. The three Gulf carriers that have already made A380 orders are also seen as key sources of future sales. “The A380 is a 30 year programme,” emphasised Bürger. “The orders we have received to date will satisfy a certain network, and I hope, as the networks of the carriers in the Middle East develop, they will have requirements for follow-on orders. That is obviously part of the plan if you are looking over a 30 year period,” he added.||**||

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