Why was the Airbus A380 a Failure

The largest commercial passenger aircraft in the world, the Airbus A380, will officially turn 12 years old this month. This incredible aircraft comes with four massive engines, a wingspan of nearly 80 meters, and can hold more than 500 people. It first entered service on October 25th of 2007, when Singapore Airlines made the aircraft's first commercial flight between Singapore and Sydney, Australia. Despite the aircraft being a technological marvel, it is sadly meeting its end. Since its inception, 239 A380s have been delivered to various airlines around the world. However, Airbus now concedes that its $25 billion investment in the aircraft can no longer be recouped. Emirates, the aircraft's largest customer, having ordered 162 aircraft out of the total 313 orders, decided to cut its A380 fleet earlier this year to just 123, spurring Airbus to reconsider the viability of the A380 project and ultimately decide to cancel production by the end of 2021. So how can such an amazing aircraft be so short-lived? The Boeing 747, after all, has been around since the late 1960s and it is still being produced to this day. It all starts with the idea for the A380, which began in the year 2000, when Airbus performed its global market forecast and estimated that the demand for very large aircraft with greater than 400 seats would be over 1,250 over the next two decades. However, Airbus never foresaw the many challenges that this technological marvel would incur. Unlike their counterparts at the time at Boeing, whom had previously dropped out of talks about a possible joint venture to build a very large airplane together, the Airbus team stayed the course, determined to build the world's largest passenger aircraft. Whether you blame it on political grandstanding or national pride, or in this case continental pride, as Airbus is a multi-nation European company primarily consisting of the United Kingdom, Spain, France, and Germany, whatever you choose to blame it on, there are plenty of options and when Airbus announced earlier this year that it will stop making the A380, it came as a surprise to no one in the airline industry. In short, the problems with the A380 can be summarized into three main points. First, the aircraft is a logistical nightmare. Number two, Airbus never foresaw the changing airline market. And finally, the A380's very poor operating efficiencies. Starting with point number one, the A380 is an absolute logistical nightmare and supporting the plane is extremely difficult. With a wingspan stretching almost 80 meters, the giant four-engine jet is much larger than any other commercial passenger aircraft, even outpacing the Boeing 747 which itself has a wingspan of nearly 68 and a half meters. As a result, airports that support the A380 are required to undergo all sorts of changes to support the aircraft such as longer and wider runways, wider taxiways, more gate space, and dual boarding bridges for the top and bottom levels of the plane. As an example, New York's JFK International Airport estimated that it spent up to $175 million on infrastructure upgrades for the A380 alone. These enhanced requirements and increased costs severely limit the airports that are able to accommodate the aircraft. For example, across the US and Canada, there are only 16 airports that are capable of accommodating the A380 compared to nearly double that for the Boeing 747. Apart from the logistics, Airbus' theory on how they believed air travel would evolve into the future was also fundamentally wrong. The thesis essentially was that long-haul and higher volume flights between large markets would be handled primarily by the A380 and other very large aircraft, while medium and short-haul connections would be handled by smaller aircraft with more frequent flights. Airbus originally thought that there would be something like 15 to 20 of these major international hubs across the world. However, the market changed and this never came about. What is becoming increasingly outdated for the international travel market is what is known as the hub-and-spoke model. In this model, airlines aim to collect passengers from many cities at a central collection point or hub and then fill larger planes such as the A380 for flights to international destinations. This same model is used by many domestic airlines but by using planes at half or even a third of the size of a typical international carrier. At the time, the Boeing 747 was incredibly successful and longer and more fuel-efficient aircraft had yet to be developed or enter service. But as more and more advanced aircraft came onto the scene, such as the Boeing 777 and the Airbus A350, providing customers with direct, point-to-point service became much more practical and appealing. The international hub-and-spoke model wasn't helped by other industry and economic factors that led to the rise in additional airline destinations and the dilution of powerful mega hubs. This led carriers that once operated primarily out of single mega hubs to increase their services and destinations across the world. This increase in size of the airline industry by the mid to late 2000s led to the rise of new hubs of service and created new airline giants like Emirates, Qatar, and Etihad. As the global airline industry grew over the next decade, annual passenger volume grew with it as it increased over 500% in just 15 years. Another contributing factor to this was the increasing amount of open skies agreements signed between countries which allowed airlines a higher degree of freedom to choose where they fly. Where before an international carrier may have only been able to fly to Delhi, for example, these new agreements allowed new flights to arrive in other large regional cities, which counterbalanced the power that the large hub once had. Likewise in China, Beijing became counterbalanced by cities like Shanghai and Guangzhou as they grew in size. It became clear that travelers would prefer to take direct routes to their destinations regardless of whether the plane was a bit smaller. This of course was something that Boeing managed to position itself well for in the early 2000s. The A380 also suffers from specific problems related to its operating economics on almost any of its routes. The airline business is not consistent year-round. There are peaks and valleys generally coinciding with certain seasons and holidays, but generally speaking, the northern hemisphere summer represents the peak of the business for something like 90% of the world's most important airlines. During this period there are plenty of routes where the A380 can be filled to maximum capacity, ranging from London to Los Angeles, Bangkok to Rome, and New York to Munich. But in the wintertime, it is a much different story. You may fill up the most popular route of the bunch, such as the London to Los Angeles route, but the other routes don't stand a chance. Unfortunately for most airlines, the A380 is not an airline you can fill up year-round. A few airlines do have hubs large enough to fill say 10 to 15 of the jets, but only Emirates has the hub volume to nearly always fill its A380s. According to Qantas, on a recent flight of their A380 from Sydney to Los Angeles, it cost the airline $305,735 to operate the flight and transport 484 passengers to their destination. This roughly 14-hour flight brings the cost per hour to operate the A380 to $21,838. Compare this to the Boeing 777, which Qantas states cost them $190,422 to fly the same distance and transport 361 passengers to their destination, and the operational cost is just $13,601 per hour. This means that although the A380 can carry 34% more passengers than the 777, it also costs 60% more to fly the same distance. Now of course, not all passengers are equal. First and business class passengers certainly do pay more and oh does the A380 cater to them. However, you get the picture. The A380 is expensive to fly and this is especially true when the plane is not at full capacity. With a list price of nearly $465 million, it is critical that airlines sell their seats on the aircraft to recoup the cost. The future of the very large aircraft market that was invented by the original Boeing 747 and now encompasses the A380 is looking grim. The latest variant of the 747, the Dash 8i, is essentially on its last legs. With the advent of newer, more fuel-efficient aircraft such as the A350, the 787 Dreamliner, and the upcoming 777X, the cost of operating these planes will essentially match the unit cost of the A380s, while seating fewer passengers when needed. This means that as long as the airlines can fill their aircraft profitably in the summer months, they can at a minimum break even in the winter. If you have not had the chance to fly on the A380, you still have the time as the production doesn't end until 2021. Current orders are still being filled and airlines are destined to fly this plane for years to come, even after production has ended. I myself am excited to be flying on my first A380 flight this December when I have the to visit Australia. Let me know in the comments below on what your thoughts are on the A380 and where you see the airline industry headed going forward. And as always, thank you so much for watching this video.