What Airline Will Lease Hi Fly’s First A380?

Filed Under: Other Airlines

It’s an interesting new era for the A380.

Last August, Portuguese aircraft leasing company Hi Fly announced that they’d be acquiring two A380s. They’re getting these A380s from Singapore Airlines, given that they’re retiring their first five A380s. What makes this so interesting is that it’s the first time that an A380 is available on the secondhand market, and what’s even more interesting is that these planes will be available for short term leases.

Hi Fly will be maintaining the same configuration that Singapore Airlines had on their A380s, meaning it will have 471 seats, including 12 first class seats, 60 business class seats, and 399 economy seats.

Hi Fly just recently showed off the new plane at the Farnborough Airshow, and the plane should be available for lease as of August, which is just a few days away. For those of us aviation geeks, this sure creates a fun opportunity to guess what airline will be the first to operate the A380.

What Hi Fly has said about their first A380 lease customer

An article a bit over a week ago quoted Hi Fly’s CEO as saying that there were two parties immediately interested in the A380, including:

  • A major European airline that doesn’t have any A380s, and that wants to use the plane for North Atlantic flights
  • An Asian airline that already has A380s (my guess would be Thai Airways, followed by Asiana)

Then a few days later, an article stated that the first wet lease contract had been signed, and that it’s for a major European carrier, and that it will fly longhaul sectors during the summer period, with the possibility for an extension.

The challenge with Hi Fly leasing out an A380

Right now is a great time for aircraft leasing companies, given the challenges that the 787 is having. With many of the planes grounded or with limited range, some airlines are taking all the planes they can get.

The challenge is that an A380 is a big airplane to replace a 787. Beyond that, this A380 has a pretty premium heavy configuration. So as much as some low cost carriers might on the surface need planes and capacity, the economics of leasing an A380 with so many premium seats might be tough.

For example, Norwegian’s 787-9 has 344 seats, while this plane has 471 seats. So it has 36% more capacity, which doesn’t nearly make up for the increased operating costs, and lack of ability to charge a premium for flat beds.

So the way I view it, a Hi Fly customer will fit into one of the following groups:

  • An airline that’s desperate for planes due to 787 issues, and they’ll take whatever they can get (I’m sure Norwegian doesn’t want to lease Wamos 747s, but they don’t have much of a choice)
  • An airline that actually has premium demand (given the 72 premium seats), and that has major seasonal fluctuations in demand, and/or is limited by their growth due to a conservative fleet strategy

My speculation

There are lots of rumors about what airline has the first contract with Hi Fly. I imagine we’ll find out in the coming days, though I’ve heard people throw around Air Austral, KLM, Swiss, TAP Air Portugal, Turkish, Virgin Atlantic, and more.

Oddly Air Austral seems to be one of the prevailing theories, but I just don’t see it. The argument is that they had two A380s on order, and planned to configure them with over 800 seats each, but ended up canceling the order in 2016. Now their biggest plane is a 777-300ER, which has just 33 fewer seats than Hi Fly’s A380. They have a total of 12 business class seats, so a plane with 72 first and business class seats doesn’t seem like a great fit. They also wouldn’t be operating transatlantic flights. I just don’t see it happening, but I could be wrong.

Personally I think there are four options that are most likely. Earlier I shared the two reasons I think an airline could lease the A380, and that’s either because they’re desperate for planes due to 787 issues, or because the A380 could actually be a good fit for them. That leads me to believe that the lease is most likely with one of four airlines:

  • Norwegian and Virgin Atlantic are both having major issues with the 787, and Norwegian in particular is picking up any planes they can get. In terms of configuration the A380 could be a good fit for Virgin Atlantic since they actually have premium seats, so an A380 could make sense on some routes.
  • Turkish Airlines has been growing significantly, and there have long been rumors of them being interested in A380s. They have legitimate premium cabins and I could see some routes where they could use the capacity, though I’m also not sure what they’d really be hoping to accomplish with this. The airline isn’t doing that well financially (though they’re doing better in the past), and I can’t imagine a one-off A380 would really help them that much.
  • The only other logical option I can think of is Swiss, because they’re the airline that could actually benefit from the premium seats and where they have multiple frequencies to non-business destinations. For example, seasonally Swiss flies twice daily to Miami, which is definitely more of a leisure market than business market. Rather than operating two A330s per day, they could operate one A380, and could use the A330s for something else. Swiss’ A330s have 236 seats, while Hi Fly’s A380 has 471 seats, so it’s a perfect fit capacity-wise. I think the big issue is going to be that I’m not sure they’d be willing to drop service standards, since Hi Fly crews would be providing the service.

None of these options seem like perfect fits, though they seem more likely to me than the other options.

KLM? I just don’t see why they’d need them, especially since their 787s aren’t impacted by the current issues. TAP Air Portugal? Their yields are so low, I’m not sure why they’d want even more capacity.

I’m curious what you guys think — which airline do you think will be the first to lease a Hi Fly A380?

Comments
  1. It could be British airways. They already have A380s, so they know they can make our work, and have been having problems with their 787s recently. It works be interesting to guess which of their transatlantic destinations would get this new A380 if they did lease it…

  2. I would also put my bet on BA, or at least IAG. Though I think it could also potentially work for Virgin Atlantic

  3. I could definitely see Turkish.
    They have so many different aircraft types another one won’t make much difference. Presumably they have huge summer demand to places like JFK, and their hard product is both good enough and bad enough that the SQ old product will be an appropriate substitute.
    If they can still get their Do and Co catering on board there won’t be much difference to passenger experience.

  4. @Ben Holz: If they service IST, yes but if they service SAW (highly unlikely with an A380!) no.

    It would be great for me, personally, if Turkish were to add a large amount of capacity from east coast US to Istanbul with award availability in, say, the next 48 hours. . .

  5. Turkish or the Lufthansa group (LX prolly)

    A crazy idea our colleagues were considering was WOW (high improbable given that no accommodation for an A380 at KEF, but could be a great idea given the high traffic to/fro the US, especially with flights to India now).

  6. My guess is BA. They are lacking capacity in the summer time, but they have too much of it in the winter, when they still have to keep operating their flights to keep their slots at LHR (not operating flights causes and airline to lose such slot).

  7. If it’s an airline that doesn’t already operate the A380 then it’s not BA, unless that line from the CEO was a bit smoke and mirrors.

    Virgin seems unlikely as they cancelled their own order and are using the ex-Air Berlin aircraft to help with the 787 cover.

    Turkish would be my bet, there were always rumours of them ordering the aircraft so maybe lease it for a while and see if it works prior to ordering.

  8. Id say Turkish or SWISS.

    I know LX can pack their 777s that have 340ish seats. Of course there is a significant increase in capacity but I think it could easily work. Or as you said, swap out the couple of 333s for 1 380 frequency.

  9. I don’t think Virgin would want a plane configured with 3 classes
    They have always claimed that Upper Class is part way between business class and first class so true first class could cause long term brand damage

  10. It definitely won’t be TAP Portugal. The A380 can’t land at Lisbon Airport. It had to land in Beja, Portugal this week because Lisbon can’t handle it.

  11. @lucky

    You mentioned that in the article, Hi Fly’s CEO is quoted that a major European carrier with intention for North Atlantic flights was interested for the A380 immediately for summer and possibly an extension afterwords.

    Does summer indicate NOW, as in 2018? or next summer (2019)?

    One thought I have is that if its right now for immediate use, is it possible Turkish is interested for now and a brief extension since they are opening their new Istanbul Airport in October? They could utilize the A380 for the US flights for the summer and then use it for their grand opening…

    Turkish could be interested in using the A380 for not only its premium offerings but also due to its range compared to their current long haul aircraft. Their A330s have a range of 6,350 miles, 777-300ER have 7,370 miles and A340-300 have 7,130 miles. The A380 has a range of 8,500, putting Sydney, Australia in range of flights to Istanbul. Australia is the only continent that Turkish currently doesn’t fly to (disregarding Antarctica).

    If Turkey really wants to make a huge splash with their new Istanbul Airport (which i’m certain they do). What better way to show that Turkey (and Turkish Airlines) has arrived than to have scheduled nonstop flights to every continent?

  12. @Traveler

    Virgin are already operating 3 classes, as they have a very nice Premium Economy product.

    I do feel Turkish is more likely though.

  13. I can’t believe nobody is mentioning Iberia when IAG CEO Willie Walsh has said he wants to see Iberia operate A380 flights. Seems most reasonable, especially as the group operates A380 and Madrid is capable of such flights.

  14. I think best short term is for Saudia, Malaysia, EgyptAir etc. flying to Hagg absolutely huge peak in demand and Hi-Fly could charge a huge premium to an airline on a short-term high demand lease

  15. What about El Al? (Not European per se, but I could see them being referred to as such).

    They seem short airframes and need to retire their 744s. TLV-JFK and LHR are high-capacity routes.

  16. I would bet against Turkish on the basis that until new IST is open it cannot be accomodated at Ataturk. No airline including Emirates flys there with the A380 and when TK were interested in using it the interest was post the new airport opening for which there still seems to be no firm date.

  17. @Niko_jas

    The A380 can land in Lisbon. What Lisbon can’t do is having the plane parked at a bridge…but a lot of planes park in remote gates in Lisbon anyway. I don’t know the details but I think the reason why the A380 landed in Beja is because that’s the airport where Hifly park their planes. That’s all the use that airport has anyway.

  18. My money is on Lufthansa… Especially to west coast cities San Francisco and Los Angeles where they are replacing some plans with the A380 out of Munich instead of Frankfurt…

  19. Aer Lingus is a good idea. Didn’t the IAG CEO say that Aer Lingus could operate them sometime? But honestly with that much OW capacity from Europe to USA I don’t really see it.
    IB would be another good bet but they seem to be doing ok in terms of planes right now… E.g. their new A350 delivery.
    I’ll go a different way and say Austrian. They seem to be reconstructing their whole network to a more US centric network so apparently there’s enough Star Alliance demand… Maybe they could use one for some high capacity US market?

  20. @Lukas I don’t think that deman would be enough to fill up these planes. If Iberia wanted to try and make it work, they’d probably go with one a380 instead of multiple frequencies. Given that MAD is sort of a significant getaway from Europe to Latam, I highly doubt they’d sacrifice that much their connecting traffic

  21. As crazy as it might sound I wouldn’t rule out Alitalia.
    Yes they are not well placed but at the same time they have limited US flights due to the transatlantic agreement with KLM/AF/Delta.
    So essentially switching to an a380 for one of their always full routes (Rome or Milan to NY, Rome to LA) might make perfect sense. Plus they could switch the A330 or B777 to places they can actually fly more often to.

  22. I agree with Jack on this one. Hajj is just weeks away and one would think that Malaysia would want to capitalize on high demand for travel to the Middle East. MH makes sense as a trial run. Doesn’t that fit in to your second group, Lucky?

  23. I’ll throw my hat in the ring on the guessing.
    Not AF as they may not survive long term I think, sadly.
    Maybe BA as it fits their fleet and they service airports that can handle the gate issues.
    KLM doesn’t really seem to have a need.
    Norwegian maybe just because they are a wild card but I don’t know if the gate handling of an A380 would work for them on a lot of routes.
    Lufthansa is a maybe.
    It could also another IAG line like Iberia, etc.
    It won’t be Alitalia and I doubt any other LCC’s
    Turkish I kinda doubt and aren’t they really a Middle East carrier, sort of?

  24. Swiss is so known for their consistency in product, i don’t think there’s any way they would be willing to accept the old and worn out singapore seats. And Portuguese crew wouldn’t really work with the Swiss either. My bet is on Turkish. They operate to so many markets where they barely make money just to be able to put in their ad campaigns “we fly to more destinations than any other airline!” Because of that, I think they’re crazy enough to lease an a380 just to operate to new york or something.

  25. TAP Air Portugal yields are low? From where is this information? Their yields to Brazil are sky high. GRU or GIG would be a perfect match for the A380. GRU some days of the week has 3 daily TAP LIS-GRU flights. TAP could even use the A380 during specific Northeast Brazil markets. Flying over 70 flights per week to Brazil (GRU, GIG, POA, BSB, REC, SSA, FOR, CNF, NAT and BEL-MAO) indicates the A380 could come in hand to TAP.

  26. @ Michael — Their yields to the US are incredibly low, and the statement was that the first lease was with an airline that would use the plane for North Atlantic routes.

  27. @Maurício Matos
    It can ‘technically’ land in Lisbon but not as part of any commercial operations. Therefore TAP cannot be leasing the A380 this summer which was the point. It’s not suitable for the current airport infrastructure so can’t be used for commercial flights. This is not my opinion, this is what ANA who run they airport say. A quick search of Portuguese news will reveal that ANA will make modifications at Lisbon Airport for the A380 to operate only from 2021.

  28. It’s important to consider that a carrier probably couldn’t operate it to the west coast daily, as that would take more than one frame. It will either be to the east coast or on one (or more) non-daily flights.

    I doubt it will be VS. If they got an A380 and operated it to the USA, it would deteriorate the ALPA situation further at DL. Plus, they’ve been moving towards the DL model of “right-sizing” markets with equipment. Presumably it would operate LHR-JFK, and I that market is too important for those carriers to outsource. The only other destination I could think of would be MCO.

    Alitalia makes sense given that they’re in need of seasonal capacity, but I think the configuration might be too premium-heavy to meet their seasonal needs. From a wet-leasing standpoint it’s not that risky. This also wouldn’t have as bad an ALPA impact as VS I think.

    One carrier I haven’t seen mentioned in Aeroflot. They operate a number of JFK flights daily, but don’t have that many premium seats on the 77W. I wonder if that market could absorb more premium seats.

    I actually think a great business model for this would be for Airbus to subsidize a leasing carrier to lease it for a year so they experience A380 operations without the risk. Carrier would pay 77W operating costs, and Airbus would kick in the difference.

  29. I think Air Italy will get one 🙂 They, Qatar and Italian aviation in general have done weirder things!

  30. Some of you commenters, get a grip people!… The article clearly states: “A major European airline that *doesn’t* have any A380s”…. So stop dicking around about LH or BA… please, some basic level of cognition here.

  31. My money is on Air Europa, they have Dreamliners on their flights to Miami, and although they are not technically a major a European airline, they big enough. Also they seem to me like the type of airline which can easily cope with the non consistency of service across their fleet (as opposed to the likes of Swiss).

  32. It’s Norwegian! LGW-JFK twice daily being combined into a single rotation.

    You heard it here first 😉

  33. Definetely not Swiss. The LH group likes to maintain consistency and i don’t think that they would want passengers to experience the SQ suites then back to what LX offer. Though the heavy premium configuration speaks volumes for Swiss.

    My 3cents are on Norwegian. The publicity alone is from a marketing point of view a golden opportunity for the carrier. The airline can sure fill the seats from Gatwick.

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