Their A380 Lost Billions; Here’s Why Airbus Considers It A Success

This February we learned that production of the Airbus A380 will end in 2021. As of February, Airbus only planned on building another 17 A380s, including three that are going to ANA, and 14 that are going to Emirates.

The A380: was there even demand?

With the huge global increase in air travel, it’s on one hand surprising to see that the A380 has been such a flop. While Emirates has loved the plane, no other airline has embraced it.

Emirates A380

You’d think there would be a fair amount of demand for the A380, given that the plane has significantly lower per passenger operating costs than the 747, and back in the day that plane ruled the skies.

The problem is that the A380 was introduced around the same time as the 787 and only years before the A350, which are long range, lower capacity, fuel efficient aircraft. Airlines ultimately decided that they’d rather operate smaller planes that are easier to fill with good yields, rather than buying planes this big.

What I’m still conflicted about is whether the A380 was a plane for which there was never demand, or if it was simply a plane before its time. With airports getting increasingly congested, is the issue just that the world wasn’t ready for the A380? Would there have been demand for this plane in a decade?

No one really knows, though I guess we’ll see if we ever see another “double decker” plane, or the 777X is the biggest jet that airlines will want going forward.

Rendering of the 777-9 in Lufthansa colors

Airbus lost a lot of money on the A380

Airbus most definitely lost money on the A380, though we don’t quite know how much. Their development costs upfront were somewhere in the range of 17-25 billion USD.

Then when it came to production costs, Airbus allegedly only barely broke even. So it’s safe to say that Airbus lost a lot of money on the A380, though we don’t know how many billions.

Why Airbus claims the A380 was a success

Airbus lost billions of dollars on the A380, and production ended much sooner than they were expecting. Yet Airbus’ new CEO claims that the plane was a success.

Some might think he’s just trying to put a positive spin on it, but I actually think there might be some merit to what’s he’s saying.

As Leeham explains, Airbus CEO Guillaume Faury claims the A380 was a success because it paved the way for Airbus’ successful development and production of the A350, and the transformation of Airbus as a company into what it is today.

In 2006 Airbus had problems with the final assembly of the A380, which exposed problems between the French and German plants where the A380 was produced. The two plants used different versions of a program to create the plane’s wiring, and when they put it together, it was a few inches short.

This disaster led to a delay of nearly 18 months for the plane being put into service.

Airbus believes that if it weren’t for this snafu, the same problems would have happened with A350 production. The A350 has been a huge success for Airbus, with nearly 900 sales of the plane so far. All things considered production of the plane has been smooth, and they credit much of what they learned from the A380 for that.

Malaysia Airlines A350

Beyond that, I do think there’s something to be said for the fact that the A380 gave Airbus a lot of credibility, both among consumers and among airlines. It showed what a versatile plane maker they are (they can building everything from an A220 to an A380), and it has been a favorite among customers.

Back in the day Boeing had more market share than Airbus, but Airbus has come a long way, even if the project didn’t pan out to be as popular as they had hoped.

What do you guys think — is Airbus’ CEO onto something when he says the A380 project was a success?

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B. McGrail Guest

Maybe not a commercial success like the B787 or A350 but as a passenger it is by far the best jet to fly long haul from a comfort point of view. Cabin pressure is more like 5,000 feet (as is B787) compared to the normal 8,000 feet which means a less tiring flight. Having flown all of the current jets except the A350, it is far superior to anything else in the skies. The B787 may be technically superior but is nowhere near as pleasant to fly in compared to the A380. Any long haul flight, the 7 - 14 hour type, is always a bit arduous, but the A380 justs seems to smooth so much out. With the multiple entrance/exit points, loading/unloading is completed in good time. Just as Concorde is missed by the cash rich (the few) for its speed, the A380 will be missed by the average traveller (the many), for its extemely comfortable passenger experience.

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Kim Guest

Perhaps Emirates was successful because of the way they configured business class. Just 6 seats per row, where Lufthansa has 8. The first class On Lufthansa is more like business on Emirates.

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Joe K Guest

I think calling the A380 a success is probably generous spin. True, they have made major organizational changes - such as being more responsive to the market than governments or national egos. Probably the best example of this positive change was the decision to cancel the continuing production of the aircraft. However, fixing IT issues and major organizational challenges aside . . . this is an aircraft that should never have been built. I've sat for hours (don't ask how many) in the lounge at the Renaissance at LHR watching planes arrive and depart. I've been at Border Control at Gatwick when A380s deplane. The one issue that no-one ever raises about this is feeder flights. For all the aircraft the A380 should replace, unless passengers are only flying hub to hub, you have to have 737s, A319s, Embraers, and other small jets ferrying passengers from their home airports to the hubs, and from the hubs to their final destinations. Point to point flying with these new aircraft is going to be quicker, likely cheaper, and more environmentally friendly. The business model, and the routes, for the A380 just aren't there.

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Mattux Member

In my experience I prefer the A380 when flying in First but avoid it when flying in Business. The extra space airlines can play with often means a more innovative first class product with amenities like showers and expansive private suites. Business class seating tends to be more standard (as in the same as on offer in other widebody aircraft in their respective fleet) and the 80+ seats result in a less private feeling... For some reason I didn’t want to like the A380 when it first came out but it was/is indeed an impressive experience. The A350 is equally impressive, especially how quiet it is. However I find the forward cabin to be awkwardly designed, and it always looks like flight attendants are stepping over one another in a small galley, and passengers stepping over the mess to get to forward lavs. I would love to see real airline spreadsheets (not manufacturer estimates) comparing costs on the A380 vs the 787 or A350. I recall the QANTAS CEO once remarking that it was cheaper to fly two 787s nose-to- tail than one A380. But, while easy to visualize, these comments don’t dig at the nuance of why airlines generally find the A380 bad for the bottom line. The airline industry can be so opaque to outsiders and it is easy for us to speculate but seeing an honest presentation of the numbers would be pretty cool.

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Larry Walker Guest

Having dealt directly with multiple airlines as my primary direct customers (two of which are in the top five in the world) for several years, I can assure you the airlines are far more than well attuned to the desires and particularly the disappointments of pax air travel in all its aspects. No matter how it gets sliced, there's only a few revenue bases for the airline, even though they are trying mightily to change that. I guess those of us in the 1% "geeks" to make sure our customers know how well we love the A380, as that component will not change for me.

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