The iconic A380, the biggest airliner in the world, is going away forever - and that could be great news for Airbus
- Airbus will end production of its A380 superjumbo in 2021.
- Airbus made the announcement after Emirates decided to reduce its commitment to the A380 from 162 aircraft to 123.
- According to aviation analyst Richard Aboulafia, only 17 A380s are left to be delivered to airlines; 14 to Emirates and three to ANA.
- The end of the A380 program is good for Airbus in the long run, Aboulafia told Business Insider. It will allow Airbus to concentrate its efforts on more important and lucrative segments of the market.
On Thursday, Airbus announced that production of its flagship A380 superjumbo airliner would end in 2021. The European aviation giant made the decision after Emirates, the aircraft's most loyal customer decided to reduce its total A380 order from 162 planes to 123.
"As a result of this decision we have no substantial A380 backlog and hence no basis to sustain production, despite all our sales efforts with other airlines in recent years," Airbus CEO Tom Enders said in a statement. "This leads to the end of A380 deliveries in 2021."
Even though the A380 proved to be immensely popular with travelers, its size and expense made the plane persona non grata with the airlines.
"The market wasn't there and I never understood why they launched it," long-time aviation industry analyst Richard Aboulafia said in an interview with Business Insider. "Big is not good."
"If you're looking for international long haul aircraft you want 250 to 300 seats," he added. "That's what the markets want and there doesn't appear to be a lot of deviation from that."
The A380 usually fly with 470 to 600 seats.
Aboulafia, the vice president of analysis at Teal Group, said that there are only 17 undelivered A380s left before Airbus shudders the production line in 2021. Of those, 14 are planes slated for Emirates and three for Japan's All Nippon Airways.
According to the analyst, Airbus made the right call to bring the A380 program to an end.
"Rip off the band-aid, it feels better that way," he said. "With this out of the way, they can take advantage of all of the other market segments with their far more important products."
Specifically, the end of the $25 billion A380 program allows Airbus to concentrate its time and resources on other more lucrative segments of the market like their hot-selling single-aisle A320neo family of jets or a clean sheet middle of the market aircraft to bridge to gap between its large single-aisle jets and its smaller twin aisles offerings.
The A380's loss is the A330neo's gain.
One of the positives to come from the end of the A380 is the shot in the arm Emirates gave to the underperforming A330neo program.
The Dubai, United Arab Emirates-based airline announced an order for 40 A330neos, an updated version of the popular A330ceo airliner.
The A330neo's reputation is certainly bolstered by the addition of Emirates to its customer base. "It helps a lot," Aboulafia said.
Does the end of the A380 program mean that Airbus is out of the business big twin-aisle jet? For now, yes.
"Right now, no one wants a bigger twin-aisle, but in a few years, they aren't going to want to cede the market to the Boeing 777-9X," Aboulafia said. "They'll do a growth version of the A350-1000."
The Boeing 777-9X is expected to enter service in 2020. With the discontinuation of the A380 in 2021, the 777-9X will be the largest passenger plane in production.