Tuesday, January 12, 2010

A380 continues to be Airbus' problem child

Ok forget the A400M problems (it's a military program anyway and I can cover that one in a separate post) but the A380 is going to be Airbus' problem child for years to come and, in my opinion, will never make a cent for EADS/Airbus.

The fact that Airbus could only deliver 10 vs the 12 (and that 12 was down from the 45 that Airbus had promised only a couple of years ago) that was promised in 2009 shows that this is a program in deep, deep trouble. Cost have increased and that only means that the breakeven amount for Airbus has only increased.

What is very interesting is that two analyst in the field, Saj Ahmad and Scott Hamilton, whose views sometimes run 180 degrees apart from each other are in agreement about the what Airbus should do with the A380. Both agree that the A380 program should be shut down because of the limited chance that Airbus would profit from the program. Saj Ahmad has advocated the A380 shut down for a few years now before the situation had worsen.
The major issue with the A380 is not the engineering or even the design but the huge flexibility that Airbus gave their customers in customizing the interiors of the A380. You have all these airlines with the A380 trying to out do each other in terms of on board passenger amenities and Airbus' salespeople basically said, in a nutshell, "no problem, we'll do that for you." This, in my opinion, went on without regards to the engineering and production issues that would be involved in producing each and every A380 and is now pacing the A380 production. When you have to hand wire and in some cases put in specialized equipment like plumbing for the showers on Emirates' A380s, the production is going to slow. Airbus is promising to deliver at least 20 A380s (they have to be deliberately ambiguous as the truly don't know how many they'll be able to produce) this, I think, is going to be a big reach for them.

Fleetbuzzeditorial.com : A380 Continued Woes

Financial problems aren't the only gremlins in the A380 program. In the two years since the aircraft's entry into service, the aircraft is still experience technical issues that have grounded flights or forced them to turn around in mid flight. It was widely expected that given the two year delay in delivering the aircraft, that the A380 would be service ready with few technical glitches forcing the cancellation of flights.

But this doesn't seem to be the case as the A380 has been experiencing a large number of technical issues. This presents problems for the airlines as you can imagine, first off off loading over 500 passengers and finding hotels and meals for them. Finally getting other aircraft to get them to their destination.

Airbus Works to Stamp Out Superjumbo Bugs Haunting A380 Flights

At the end of the day even Thomas Enders, EADS CEO, has called the A380 program "a big disappointment."

What remains is can Airbus fix this program if at all? It is clear that EADS and possibly the EU will lose money on this program but if they can lessen the technical issues and get a few more orders, the financial pain may not hurt as much. What can be a really big problem is that if the A380 (and the A400M) continues to take resources away from the A350 XWB then that very important program will be delayed and will suffer the same issues that the 747-8 had suffered due to the reallocation of resources from the 747-8 to the 787. However, with two large programs in serious trouble, the effect on the A350 can be more severe than the 787's delays were on the 747-8.


A380 said...

Not really an Airbus fan are you? The quote by Thomas Enders has been taken out of context and really only refers to the fact that they didn't deliver the expected number of A380's in 2009!

fahd En Leon said...

what should be the contingency plan for airlines who are waiting for a380s to be delivered so that they can expand their long haul operations