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Airline Mismanagement

Designing the biggest passenger airplane in the world is a massive task, because you have no guidelines to work from.

Airbus, and other manufacturers, considered many different alternate design concepts before settling on what we now know of as the A380.

 
 
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The Airbus A380 Super Jumbo Part 2

From vague concept to actual airplane
 

Airbus continues to explore new future airplane designs, as is shown by this computer image of a plane known perhaps as the A20.30.

Part 2 of a four part series on the Airbus A380 - please also visit

1.  Airbus A380 antecedents

2.  Differing plans for a 747 successor

3.  A380 completion, configuration, and controversy

4.  Inside an Emirates A380

 

 

 

Designing and selling a successor to the 747 proved to be a very challenging process; with Boeing in particular not wanting to lose its current dominant position with the 747 and unwilling to invest the huge costs involved at a time when the 747 had no competitors.  'If it ain't broke, don't fix it' seemed to be Boeing's strategy.

Airbus, on the other hand, needed to develop a competitor to the 747 so as to give it a complete product range of airplane types.

The different business situations of Boeing and Airbus caused Boeing to defer a 747 replacement, while driving Airbus to develop one.

Boeing's Various Plans for Successors to the 747

Boeing toyed with the idea of a completely newly designed successor to the 747, which it termed the NLA - the 'New Large Airplane' - in the early 1990s.  This was proposed to have a passenger capacity of 606 passengers, but Boeing ended up discontinuing development of the concept, preferring instead to pursue less costly (and, it felt, less risky) further enhancements to its existing 747 design.

Boeing publicly considered several new versions of the 747.  In 1996 Boeing announced new 747-500X and 747-600X designs, and a more tentative 747-700X.  The -500X would have been a longer range plane (462 passengers up to 10,000 miles) and the -600X a higher capacity plane (548 passengers up to 8900 miles), both being simple extensions of the 747 design.  The -700X was more fanciful with a wider fuselage and capable of carrying up to 650 passengers.

These plans came to nothing, and in 2000 Boeing announced a 747X as a counter to Airbus' first announced plans for a super jumbo, then designated the A3XX.  Both planes were specified as having a 550 seat capacity, but after a year of unsuccessfully trying to find any airline that would order the proposed stretched 747 design (while Airbus had already obtained orders for 66 A380 planes), Boeing abandoned the concept, choosing instead to misdirect its energies towards its short lived and ill fated 'Sonic Cruiser' concept (a plane that was to fly slightly faster than previous jets, but still slower than the speed of sound) and was silent on the concept of any further extension of its 747 for several years.

Note also our five part series on the history of Boeing.

Boeing then contented itself to a role on the sidelines as an A380 naysayer, claiming the plane would never be successful - a claim that looked increasingly far-fetched as Airbus continued to rack up more and more orders for its A380.  And so, in late 2005, Boeing was forced to change its position, and it instead said that a bigger than 747-400 plane was needed, but not one as big as an A380 - a fairly untenable statement to make due to the fine shade of difference between a bigger than 747-400 and a regular A380 plane.

Boeing's new 747-8

Boeing accordingly announced its plans for yet another updated 747, named the 747-8.  This should have more sensibly been called the 747-500 but Boeing by this time had now fully entered its ridiculous phase of including the number 8 wherever possible in any airplane designation in the hope it would help boost sales of the plane to China, due to the good luck ascribed to number 8 by the Chinese.

The 747-8 is simply a stretched version of the 747, adding 19' to its length, and making it the world's longest (but not largest) passenger airplane.  This stretch will add potentially 51 more seats to the plane.  The 747-8 is also to have long range (about 8800 miles, more than any previous 747, other than for the oddball and unsuccessful 747SP).

In the almost three years since announcing the new plane, Boeing has had only one sale of the 747-8.  This was a sale of 20 747-8s to Lufthansa (which has also purchased A380s from Airbus), and the first planes are currently expected to start commercial service in 2010.

This is a disappointing level of sales, although Boeing has enjoyed much greater success with the freighter version of the plane, having received 78 orders through the end of 2007.  The 747's design and origins have always been very strongly influenced by freight carrying issues, and exactly as anticipated in the original design of the 747, when the plane's appeal as a passenger transport reduces, it still remains a firm favorite of freight companies.

Amusingly, it was first anticipated, back in the 1960s, that the 747 would be replaced by a supersonic passenger jet within a decade or so, what was briefly termed the 2707.  This of course has never happened.

A piece of trivia - why the 747 has an upper deck

Interestingly, the upper deck on the 747 wasn't developed with the prime intention of providing more seating.  Rather it was due to the 747's cargo plane origins, and the desire to allow direct loading into the front of the plane by way of lifting up its nose.

This meant the cockpit was innovatively designed to be above the main deck in the 'hump' and it was only subsequently that the hump was extended and made into extra passenger seating.

The short length of this hump initially, and then its subsequent extension, was a tantalizing hint of the future of very large sized airplanes - it begged the question 'Why not make it a complete second level?' - a question that has only now been answered by Airbus.

Other Manufacturers and Their Plans

McDonnell Douglas

McDonnell Douglas had also looked at a successor to its MD11 that would be larger than a 747, and had developed a concept plane, the MD12, that was to be a double decked plane, and with four engines rather than the three on the MD11 and DC10.

This was first offered to airlines in 1991, then evolved into a new form in 1992 that would have had its first flight in 1995 and first commercial flight in 1997, but it did not get any orders and was cancelled.

In 1996, McDonnell Douglas offered a new plane, the MD-XX, an MD-11 derivative that wasn't as large as the MD12.  No interest was received, and the company cancelled the project later in 1996.

Boeing/Airbus Joint Venture

An industry joint venture of sorts was formed in January 1993, comprising Boeing and several of the companies that were members of the Airbus consortium, with the objective being to pool resources to create a new super-jumbo, the belief being that while there was enough potential market demand for one super-jumbo, there was insufficient market demand to support two competing planes.

This joint venture coined the term VLCT to refer to its idea of a 'Very Large Commercial Transport'.  It worked on the concept until April 1995 when it was abandoned.

With this as the marketplace background, we can now understand Airbus and what it was doing.

Development of the Airbus A380

Airbus was (and still is) an aggressive and fast growing airplane manufacturer, and was quickly expanding its product range.  Its first plane, the A300, was a mid-sized medium range plane, good for intra-European flights, and first flew in 1974.

The company then added smaller planes (the A310 and A320 series, with models of each series first flying in 1983 and 1988) and then larger planes (the A330 and A340, with first flights occurring in 1994 and 1993).  By the time the A330 and A340 were in production Airbus arguably had planes to match Boeing's planes across the board in all categories except for the 747 category.

Unsurprisingly, Airbus now focused on coming up with a plane to compete with the 747, and recognizing that the 747 in its present form was no longer significantly different or better than newer planes that were almost as big and often cheaper to operate, it decided to develop a bigger and better plane, rather than a direct 747 competitor.

This concept was first announced at the Paris Air Show in 1991, when Airbus revealed vague plans for developing a 600 - 700 seat super jumbo jet.  This concept went through various interesting variations, including one which proposed two A340 fuselages joined together, side by side.

Airbus then participated in the VLCT study with Boeing with a view to possibly jointly developing a 747 successor, while continuing its own development work on a plane of its own.  Airbus was seeking to have its cake and eat it too.

The joint venture concept failed, with Boeing ostensibly deciding the risk associated with developing a 747 successor was too great, and Airbus deciding the greater risk would be in not developing a 747 successor (and thereby leaving the top end of the market exclusively with Boeing).  Airbus also perceived that Boeing may have been using the VLCT study as a way to slow down its own direct development of the A380 (then referred to as the A3XX).

Airbus continued to develop its A3XX plan, and Boeing took an on-again/off-again approach to trying to compete against it.  However, by the end of 2000, Airbus had firm orders for its A3XX and Boeing had no orders for its 747X concept, and so the Airbus board committed to proceed with the A3XX project, now named the A380 and Boeing, yet again, stepped back from pursuing a new enlarged improved 747 derivative.

The first A380 took to the air on 27 April 2005, and after some unfortunate delays, the first customer plane was delivered to Singapore Airlines on 15 October 2007, operating its first flight (between Singapore and Sydney) on 25 October.

The production delays stemmed in large part from the organizational challenges inside Airbus.  It is a combination of formerly independent airplane manufacturers in different European countries, and the merger of the different companies and their different design processes resulted in some of the designs done in France not equating to the supposedly matching designs done in Germany.  Wiring in particular proved particularly intractable to resolve, and the first production planes have had to be essentially rewired by hand.

Production has therefore been slow to date, but continues to increase as the underlying design issues are resolved.  One plane was delivered in 2007, 12 will be delivered by the end of 2008, and 21 more in 2009, with a hope to get deliveries up to an impressive annual rate of 40 a year in 2010.

Singapore Airlines' experience with the A380 - it has operated over 100 commercial A380 flights at the time of writing this in August 08 - has been extremely positive to date, with the airplane proving to be outstandingly reliable in service and enjoying close to a 100% uptime record.  The plane's fuel economy targets have reportedly been met and even exceeded.

Financial Issues

The development cost of the A380 has massively increased beyond the initial estimates (of $10 - 12 billion), and is currently estimated by various sources as being in the order of $18 billion.

Airbus had earlier anticipated that the project would break even after selling about 200 A380s, but now will only admit that the break even figure is in excess of 400 plane sales.  The reason that the break-even point has more than doubled, even though the total development costs have 'only' increased by about 50% is due to extra production costs per plane sold, greater than anticipated discounting, compensation paid to airlines for delivery delays, and losses due to exchange rate changes (the planes are priced in US dollars which have been weakening, while the manufacturing costs are mainly in Euros, which have been strengthening).

The list price of an A380 is in the realm of $320 million (depending on options), but actual negotiated prices are substantially less than this, perhaps sometimes even dropping below $200 million (ie up to a 40% discount).

As expensive as the A380 is, one plane has already been sold to a private individual, Prince Al-Waleed bin Talal, the billionaire investor dubbed the Saudi Arabian Warren Buffett, to be made into a 'flying palace'.  Airbus projects selling as many as 30 A380s as flying palaces, variously to wealthy individuals and national governments.

As the A380 becomes more widely accepted and consolidates its position as a bona fide large airplane successor to the 747, it is probable that Airbus will not need to discount as heavily as it has done to date to buy business for the A380 program.

A380 - lower costs to airlines but probably not to you

Depending on how you cost out the claim, the A380 probably costs an airline about 15% - 20% less to operate than a 747.

This simple statement needs a lot of detail to be made more exact, because operating costs vary enormously, and depending on what is included into operating costs also can change the equation.

For example, a plane flying a short distance will have a greater operating cost, per mile flown, that a plane flying a long distance.

Operating costs may variously include airplane depreciation or not, and if it does include this, a new plane might have higher depreciation costs than an old plane making it seem like it has higher operating costs, but in both cases, the costs are 'semi-fixed' (ie they vary only slightly whether the plane is flown or left on the ground) and arguably should perhaps not be included.  Plus is it a fair comparison to compare the minimal depreciation on a 20 yr old plane against the high depreciation on a brand new plane?

And so on and so on - these are all things that accountants love to discuss, and hence the imprecision in establishing exactly how much difference in operating cost there is between an A380 and a 747 (or other plane).

But, whatever this difference is, it does exist, and will save airlines money.

Just to take some numbers wildly at random, let's say the operating costs on a 747 are 8c per passenger mile; and let's say an A380 has a 15% lower cost - ie, 6.8c a mile.  This means that on a 5000 mile flight across the Atlantic, an airline can save $60 per passenger each way, or $120 roundtrip.  That's a lot of money, and on a 490 seat A380, that is $58,800 extra revenue per roundtrip.  If we say the airline can operate the plane on six roundtrips a week, that is $18 million in extra profit the plane can generate every year.

So how much of this $120 saving are you likely to see reflected in the price you pay for your ticket?  Is it likely airlines will start charging lower fares for A380 flights compared to flights on other planes?

Alas, the answer, at least short term, is 'nothing' and 'no'.

But, longer term, we can expect that the lower costs of the A380 will help airlines to keep their fare increases down and eventually the lower cost of the A380 will become a shared benefit between them and us.

Part 2 of a four part series on the Airbus A380 - please also visit

1.  Airbus A380 antecedents

2.  Differing plans for a 747 successor

3.  A380 completion, configuration, and controversy

4.  Inside an Emirates A380

 

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Originally published 8 August 2008, last update 02 Jul 2017

You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.

 
 
 

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