Home > Commercial > Requiem for a Dream: The Demise of the Airbus A380

Requiem for a Dream: The Demise of the Airbus A380

[Photo: Maarten Visser/Flickr]

This week, Airbus made news with their announcement that they “will end A380 superjumbo production in 2021.” Despite being an engineering marvel and a passenger favorite, the A380 failed to achieve the sales success – 750 airframes – forecasted by Airbus at the outset of the program, with only 251 aircraft expected to be delivered when production ends in 2021.

Although rumored for some time, the announcement from Airbus was still a bit of a surprise. When it launched, the A380 presented a juxtaposition to the 747: a fresh, clean-sheet concept vs. a proven – yet aging – design, the future vs. the past. Perhaps Jon Ostrower of The Air Current put it best with his tweet below.

But when the evidence is examined, the demise of the A380 program isn’t that surprising after all. Peter Cohan, writing “How Boeing Lured Airbus Into Now-Busted A380” in Forbes, contends that the end of the A380 was, “an outcome that rival Boeing anticipated about 25 years ago when it outplayed Airbus with a brilliant bit of judo strategy.” It can be argued that Airbus’ misreading of market demand for large aircraft resulted in a lack of sales and ultimately doomed the program.

Beginning in the 80s, some at Airbus felt the need to compete with Boeing in the Very Large Aircraft (VLA) segment in order to cement Airbus’ position as a major player in the commercial aviation market and they launched studies for the A380 in 1988. Airbus was determined to challenge Boeing’s dominance in the wide-body, long-haul marketplace, driven mainly by the 747, then more than 30 years old.

One of their market research initiatives was the Very Large Commercial Transport (VLCT) study, which Airbus undertook in conjunction with several partners including Boeing, as well as Aerospatiale, British Aerospace, CASA and Daimler-Benz Aerospace.

When the VLCT study was completed, Airbus and Boeing had radically different interpretations of the study. Airbus believed that the increase in passenger numbers projected in the report, coupled with reduced slots and capacity limitations at airports, favored their vision of an aviation future in which major hubs were served by very large aircraft. Airbus was convinced that given airport congestion, limited landing slots, and increased passenger numbers in growth markets across Asia and the Middle East, the hub model was the way forward. They were determined to move ahead with a very large aircraft capable of challenging Boeing’s dominance.

[Photo: Richard Vandervord][Photo: Airbus][Photo: Rulexip][Photo: Mohammed Zaheer][Photo: British Airways][Photo: Steve Lynes]

As a result, Airbus publicly announced the A380 project in 1990, and the A3XX was declared in 1994. Airbus launched the $12 billion program in December 2000 and the prototype was unveiled in Toulouse on January 18, 2005. Launch customer Singapore Airlines took delivery of the A380 on October 15, 2007, and revenue services commenced on October 25.

But Boeing believed the report showed something very different: that airlines would benefit from an aircraft – the 787 – which would allow more frequent service on longer, thinner routes in a cost-effective manner.

Boeing’s strategy was clearly spelled out in their Commercial Airplane Group’s 1998 “Current Market Outlook,” in which they declared:

“Small airplanes will capture the largest segment of the market over the next 20 years. The annual forecast projects seven out of 10 airplanes delivered during the next two decades will be single-aisle airplanes – the size of the Boeing 717, 737 and 757. Airplanes of this size will account for 43 percent of the dollars invested in new airplanes, or 12,260 airplanes.

Intermediate-size airplanes, such as the Boeing 767 and 777, will represent one out of four future airplane deliveries. Airplanes of this size will account for 44 percent of the dollars invested in new airplanes, or 4,360 airplanes.

The report estimates the smallest market segment, 747-size or larger airplanes, will total 15 percent of the dollars invested in new jetliners, or 1,030 airplanes…

…This forecast was the basis for our decision not to build an airplane larger than today’s 747. Unlike our competitor, we think that market forces are moving toward frequency over size. The market is simply too small and too far into the future to risk investing large amounts of money on airplanes larger than the current 747-40.”

On July 11, 1995, Aviation Week reported, “Boeing confirmed yesterday that it and its Super Jumbo study partners have reached a conclusion telegraphed more than a year ago-a very large commercial transport, or VLCT, would be a lot easier to build than to sell.” 

Unfortunately for Airbus, Boeing’s interpretation of the data and the expected needs of airlines around the globe proved correct. Airbus has acknowledged that the more than $25 billion invested in the A380 program cannot be recovered.

[Photo: Simon Boddy Wikipedia]

Both companies continue to offer market forecasts which detail competing visions of the future:

Airbus Market Forecast 2018-2037
Boeing Market Forecast 2012-2031

If you are interested in reading more about market forecasts from Airbus and Boeing, you can download several examples from our Media Library:

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1 Response

  1. Andrea

    All of the airports that invested in terminals to accommodate the A-380 hopefully have back up plans for what to do with those once the A-380 is finally retired.

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