A380 superjumbo expects 2010 to be a better year than 2009

After poor deliveries and few orders in 2009, the Airbus' giant aircraft, A380 expects a better 2010.

However, whether the European manufacturer can deliver it is another matter.

The Toulouse, France-based manufacturer Airbus is expected to set its production target for the year sometime this month, said a report by the Centre for Asia Pacific Aviation (Capa).

It said the A380, which is entering its third year of commercial service, is a hit with both passengers and airlines despite continued operational problems and production difficulties at the manufacturer.

Currently, 23 A380s are operating worldwide, with just four airlines, and the aircraft is flying to 12 destinations, on 18 routes.

Airbus delivered 10 A380s last year – three to Emirates, four to Singapore Airlines, two to Qantas and a single aircraft to Air France.

The Capa report said this is "two less than it delivered in 2008" and less than half of its initial target for the year. Airbus had planned to deliver 21 A380s last year, but cut its production target four times, in the face of ongoing delays to manufacturing and airline deferrals.

Two A380s, one for Air France and one for Qantas, are due for delivery in early 2010. Emirates, the largest A380 customer having ordered a total of 58 superjumbos, is currently operating seven of them, to seven destinations.

The Dubai-based airline has mostly chosen flagship routes for the type, according to Capa report.

The aircraft, first deployed to New York, was withdrawn from the service after 10 months, reportedly due to low load factors and waning premium demand.

And then bilateral restraints prompted Emirates to operate the aircraft to destinations where its is frequency limited, such as Toronto. The airline is also using the size of the aircraft to maximise capacity into some smaller markets such as the Hong Kong route, which Emirates would add to A380 routes in May-2010, operating via Bangkok.

However, the A380's launch customer, Singapore Airlines, has adopted the relatively conservative deployment strategy operating mostly long-haul routes to major population/business centres.

Singapore Airlines began flying A380 in October 2007 and now operates the superjumbo to just six destinations with plans of adding a seventh one, Zurich, in February this year, the report said.

Meanwhile, Australian operator Qantas already has five A380s in its fleet and is due to take delivery of another this month.

Qantas' A380s are mostly deployed on the lucrative "Kangaroo route" between Australia and Europe, as well as the important trans-pacific route to Los Angeles, said the Capa report.

"But the airline is not alone in using Airbus' giant on the route, with Singapore Airlines and Emirates also using the A380 to link Europe and the Asia Pacific," the report said.

The newest operator of the A380 – Air France, which took delivery of its first A380 in October 2009, deployed the aircraft on Paris-New York JFK service, becoming the first European operator of the aircraft. The French carrier will also be the first to operate the A380 on regular services to Africa, announcing plans in late 2009 to launch a daily service to Johannesburg in February.

Where next?

This year will see Lufthansa taking the delivery of its first A380. The carrier, which delayed delivery of its first aircraft from late 2009 to mid-2010, plans to deploy the aircraft to New York, from Frankfurt hub.

Next, Korean Air is reportedly due to join the list of A380 operators late in 2010, according to Capa report. Although the Korean national carrier has made three orders of the type, it has not yet announced destinations, but has said it will be operating early aircraft to the US West Coast.

And while several carriers are due to join the A380s operators club in the next few years, others have pushed back their deliveries. After the initial delays in production in 2006, Virgin Atlantic and aircraft lessor ILFC pushed back their A380 orders, said Capa.

It said the global financial crisis saw more carriers push back deliveries, including Qantas, British Airways and Kingfisher Airlines.

Will A380 break even?

After two big years of orders from airlines since the start of the decade, Airbus has received 17 orders for A380 in past two years.

"The combination of more than two years of production delays, ongoing manufacturing problems, ballooning development and production costs and slow deliveries and heavy customer penalties, means the A380 programme has struggled to break even," Capa said.

It said that with the ongoing production difficulties, Airbus suspended the A380 freighter programme in 2007, resulting in the loss of all 20 orders for cargo version. It has instead opted to concentrate production on the more popular passenger version. The initial break-even target of about 200 aircraft was pushed back to 270 aircraft in 2005, Capa said, adding that it was revised again to 420 in 2006.

As of November 2009, Airbus had 202 firm orders and 51 options for the aircraft, as well as four unconfirmed orders from Vietnam Airlines.

Positive response

All said and done, airlines using A380 are reporting higher yields and higher load factors, as passenger reaction to the improved product have been so positive, said Capa's report.

It added: "As the global economy recovers, a number of airlines are now increasingly interested in the A380. The aircraft has proven itself as a valuable addition to airline fleets, but it is still causing headaches for Airbus and EADS.

"If the manufacturer can hit its targets, and drive down the cost of A380 production, the future of the aircraft looks brighter," adding that the US carriers, too, may consider using the aircraft as their finances improve.

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