21 February 2019 11:46:07 IST

A management and technology professional with 17 years of experience at Big-4 business consulting firms, and seven years of experience in high-technology manufacturing, Rajkamal Rao is a results-driven strategy expert. A US citizen with OCI (Overseas Citizen of India) privileges that allow him to live and work in India, he divides his time between the two countries. Rao heads Rao Advisors, a firm that counsels students aspiring to study in the United States on ways to maximise their return on investment. He lives with his wife and son in Texas. Rao has been a columnist for from the year the website was launched, in 2015, and writes regularly for BusinessLine as well. Twitter: @rajkamalrao

The end of a glorious run for the A380

Airbus’ move to stop making the A380 reflects a changing market and lower demand for the mega carrier

For aviation buffs, last week’s announcement that Airbus Industrie, of Toulouse, France, would stop production of the A380 was expected, but thoroughly disappointing.

My first trip on the world’s largest commercially produced aircraft was in 2011, travelling from New York’s JFK to Paris Charles De Gaulle on a brand new Air France plane. Everything about the A380 was different. But one adjective defined it all: Big.

A structure larger than the giant hump-backed 747, the A380 is double-decked all the way to the back and has a tail taller than most airport terminal buildings. The plane can carry 525 people. The nose of the plane looks like that of a blue whale — and this is by design. The A380 is one of the most efficient flying machines ever built. The four engines are massive, so massive that the plane can reach cruising altitude with all of that weight in just 15 minutes from takeoff. The A380 has had an admirable safety record. During the early years, a few airliners reported engine fires when in flight but in each case, the pilots landed the planes safely without further incident.

Flawed business model

The A380 has been a mystical machine because it stretched (and often turned on its head) every assumption about modern aviation. Most airports had to be reconfigured to emplane and deplane passengers quickly. The plane was built on a flawed business model that airlines would embrace an airliner ferrying 500+ people from large city hub to large city destination. With fuel costs rising in 2006, the launch year, the company bet that the cost per mile per passenger would still make it viable for the airlines. It’s ironic that this announcement to cease production came when fuel prices are less than half of what they were in 2006.


So what killed the product? The simple answer is that there never was sufficient demand from airlines around the world — like that for a Boeing 737 or the Airbus A320. Not a single American carrier signed on to the A380. The fate then lay squarely in the hands of the large West Asian airlines — Emirates, Etihad, and Qatar.

From a marketing angle, these mega carriers had to distinguish themselves from the competition, and the A380 made perfect sense to them. Even today, glossy ads depict new planes with lots of features, such as mood lighting in the cabins, well-appointed toilets or bigger windows. Emirates and Qatar regularly promote luxury in the upper classes on long-haul flights — such as lie-flat beds, a fully stocked bar, and private showers.

Shift to point-to-point routing



From an operational view too, it made sense. Credit these three airlines for reaching out to dozens of developing countries and providing their citizens access to international travel. With all those passengers arriving into Doha, Abu Dhabi and Dubai, these airlines needed large aircraft to ferry them all westbound, to Europe, Africa, and North America. Emirates deserves special mention here. The airline has over 100 A380s in its fleet. It operates nine A380 flights to London from its Dubai hub every day; five to Bangkok and four to New York’s JFK.

But even Emirates saw that the market was steadily moving to the point-to-point model. Here, credit Boeing for refusing to tow Airbus’s line and not creating a competitor product. Boeing flatly said that it would rather invest its resources on developing the 787 Dreamliner, a smaller, two-engine, wide-body aircraft that can carry about half the passengers on an A380. And today, there has never been a more successful wide-body plane ever built.

Because of a carbon-fibre based body and super-efficient engines, the Dreamliner can travel extremely long distances. If you could travel from Mexico City to Tokyo Narita non-stop without connecting through a massive hub and thereby avoid 250 plus fellow passengers, would you still want to fly the A380? Boeing got this answer right and Airbus got it wrong.

Writing on the wall

When Emirates recently announced that it was slowly beginning to exercise its options to convert its A380 orders to the A350, a 787 Dreamliner competitor, the writing for the A380 was on the wall.

In a world where American Airlines still operates McDonnell Douglas MD-83 aircraft (built in 1982), the end of the A380’s production does not mean that we will stop seeing these planes any time soon. Most A380s will fly into 2040 and beyond — and then, will be repurposed as freighters.

The lesson here is that when it comes to aviation, the West Asian airlines rule the industry with an iron hand. Their blessing often launches new aircraft models (the A350 started with a huge order from Qatar) and their lack of interest stops existing production lines. Now, who in the world could have predicted this even two decades ago?