Wednesday, September 14, 2016

Singapore Airlines Won’t Extend Lease on First Airbus A380 Jet

By GAURAV RAGHUVANSHI and ROBERT WALL

Updated Sept. 14, 2016 10:56 a.m. ET



The origins of building a superjumbo go back to 2000, when Airbus gambled that over the next 20 years it would win half the market for very large aircraft, which it estimated at around 1550 planes. Until 2015, Airbus has booked 317 A380 orders, of which 158 have been delivered. Unlike the 747, which is now more of a rarity, it did not make a larger version or a freighter. Boeing latest variant, the 747-8, has also not taken any orders lately as airlines opt for twin-engine wide body aircraft rather than the bigger four-engine models. Although some have suggested the A380 could go out of production around the end of the decade unless orders pick up, Airbus officials have been at pains to say the A380 project won’t be abandoned.

In the 11 years since the mammoth Airbus A380 first took the air, the superjumbo has not become the game-changing aircraft the company had originally hoped it would be. Although Airbus has taken 317 orders for the jet, the company has struggled to expand its customer base past the dozen or so airlines that currently operate the airplane. And nearly half of those orders are by a single airline — Emirates.

The A380’s size has become its disadvantage as airlines prefer relatively smaller planes such as the Airbus A350 and rival Boeing Co.’s 787 Dreamliner that can fly nonstop to their ultimate destinations, bypassing large hubs such as London Heathrow and Singapore’s Changi Airport. The Singapore flag carrier currently operates 19 of the jets. The first five were taken on a 10-year lease deal. “Decisions will be made on the four others later,” a spokesman for Singapore Airlines said.

Singapore Airlines isn’t the only airline turning its back on some of its A380 jets. Malaysia Airlines has decided to replace its A380 jets with the smaller A350 jets and is looking for customers to buy or lease its six jets, the airline’s chief executive, Peter Bellew, said in a recent interview.

Tying back the article with Global Marketing concepts, it seems that Boeing is far more focused on their customers and their customer’s customers from the very beginning of the design process. For all of the trials and tribulations that the 787 program has undergone, it has undoubtedly enabled the creation of new routes. No aircraft in history has been able to fly as few passengers as far as the 787 can or as efficiently.

Further Reading
  1.  http://blogs.wsj.com/corporate-intelligence/2015/05/28/airbus-reckons-superjumbo-just-the-ticket-for-budget-carriers/?mod=yahoo_hs
  2.  http://www.businessinsider.com/budget-airlines-could-save-the-airbus-a380-superjumbo-2015-5
  3.  http://www.nbr.co.nz/article/carry-kiwis-love-a380-airlines-not-so-much-ng-172171


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