Airbus A380 could be discontinued in 2018 says Airbus CFO

Posted on 19 Dec 2014 by Tim Brown
A380 Final Assembly Line in the Jean-Luc Lagardere plant at Toulouse, France. Image courtesy of Airbus.

With not a single order placed by an airline for the Airbus A380 so far in 2014, Airbus Chief Financial Officer, Harald Wilhelm, has told investors in London that the plane maker will need to make big changes if the jumbo is to continue production beyond 2018.

Speaking at the Airbus Annual Investor Meeting in London on December 10, Mr Willhelm said the company faced the decision of either making the Airbus A380 more attractive by offering new engines or discontinuing the program.

In July, Japan’s budget carrier Skymark Airlines cancelled all six of the planes it had ordered leaving Dublin-based leasing company Amedeo the sole buyer of the A380 this year. Amedeo, which purchased 20 planes, is yet to find a single airline customer for the jumbos.

Airbus boss Fabrice Brégier distanced himself distanced himself from the comments and told investors that upgrades to the A380 to use more fuel-efficient engines and a stretch version capable of carrying 1,000 passengers would happen “one day”.

Brégier said that an A380neo with more fuel-efficient engines and an A380 stretch (also known as the A380-900) are both on the horizon.

Other Airbus executives further sought to downplay the CFO’s comments and said the A380 programme was on track and that demand for the world’s biggest passenger jet would increase. “The A380 will dominate the market in years to come,” Airbus sales chief John Leahy told investors at the London gathering.

The production schedule of the Airbus A380 is near capacity for 2015, 2016 and 2017, and the company is expected to break even financially on the plane in those years. But Harald Willhem said that the outlook for 2018 was not as good and that the company would need to develop new, more efficient, engines (at an estimated cost of $2.5bn) for the aircraft to attract new orders.

Although the four-engine A380, which took its first flight in 2005, is considered by many travellers as the most comfortable of the long-haul jets, many airlines are tending towards smaller twin-engine jets that are more fuel-efficient and can be serviced by more airports.

“It’s an excellent plane, but it only works for the right destinations,” says Alexandre de Juniac, chief executive officer of Air France told Bloomberg. The carrier wants to cancel the last two of the 12 A380s it ordered.