- Airbus Facing Harsh Reality That A380s Time Is Almost Up
- Program Write Down More Brutal Than That Of 787 For Boeing
- Asset Values, Lease Rates Will Plunge, Second Hand Market Dead
Airbus’ poor first half results can always be turned around when the company prioritises LEAP-powered A320neo deliveries ahead of its exposure to the struggling GTF engine.
However, Airbus cannot turn around the A380s miserable fortunes. Cutting production to just eight units in 2019 points to Emirates likely not now ordering a further mooted 20 units. Even if they did, it’d be further loss-making A380s that Airbus would have to produce. If this deal was secure, perhaps Airbus would not have lopped rates. Emirates has started to focus its widebody strategy elsewhere given the A380s market failure.
Can Airbus escape a massive write-down on the A380? Probably not.
Given the $30bn+ sunk into this white elephant, pseudo job creation exercise, Airbus’ widebody strategy has no competitive response to the 787-10, 777-9, 777-8 or the proposed 777-8X Freighter.
As Emirates’ heavily used A380s start to come off lease, lessors will struggle to remarket them all – especially when Airbus will be targeting the same customer base to try and sell new ones. Appraisers are marking down A380 values already.
How long it will take Airbus to finally kill off the A380 instead of holding on to it when the true backlog is 50% smaller than advertised and no hope of said customers ever taking delivery of what is essentially a technologically, economically and environmentally irrelevant airplane?
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