QANTAS is deferring delivery of 2 Airbus A380 aircraft until the 2016 and forward time period in an effort to lower costs in order to compete more successfully with Virgin Australia.

It’s a bit of a blow to the A380 program in some ways and it adds to the pain of cancelled orders from China for the A380 as well.  However, Airbus will be able to deliver the aircraft to other airlines at present.   I suspect that airlines with a substantial A380 fleet are finding the aircraft quite successful on the routes it can be deployed on and I know that Lufthansa regards it as having lower seat mile costs.

However, I continue to believe that there are only so many routes it can be deployed on to earn regular profit.  QANTAS would take delivery of these if there was enough demand as they are replacing aging 747-400 aircraft.  Lower seat mile costs are great but only if you can fill the aircraft regularly all year round.

I’m not sure all airlines are doing a very good job with that and Lufthansa’s choice in having both the 747-8i and A380 kind of speaks to the fact that while seat mile  costs are important in the equation, filling the aircraft is just as important.  A full 747-8i earns more money than an A380 at 85% load factor.

The A380 will continue to sell . . . slowly.  It will continue to be delivered and it will continue to get deployed on various routes but it remains a niche aircraft at best.  That’s OK, so is the 747-8i.  The real profit earners going forward are going to be the 777 series from Boeing and the A350 from Airbus.

Filed under: Airline Fleets by ajax