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TheStreet Open House

Airbus Hopes Lift With A380

The flight carried 200 passengers, including at least half a dozen executives from airlines that are Airbus customers. Gangwal, for instance, has ordered 100 A320s for Indigo. Also aboard was Dave Barger, president of JetBlue (JBLU), which will celebrate the arrival of its 100th A320 on Friday.

"We want this airplane to be wildly successful," Barger said. "A strong Airbus is good for JetBlue and good for the industry. And I think there is definitely a place for (the A380)."

Both Gangwal and Barger compared the A380 to the 747, which was considered far too large to succeed when Boeing (BA) introduced it with about 366 seats in 1970. Today, more than 1,350 747s have been sold, some seating as many as 500 passengers.

Storied History, Hopeful Future

The A380 took off Wednesday beside a hangar once occupied by Pan American World Airways, which operated the first commercial 747 flight from Kennedy to London in 1970.

At the time, the DC8 and the Boeing 707 dominated transatlantic travel. But they quickly became obsolete, as the 747's introduction triggered an immediate demand for the aircraft. Airbus COO John Leahy said he expects a similar reaction to the A380's introduction.

"I expect a big ramp-up in 2008, just the way it happened with the 747," Leahy said. By the end of that year, Singapore Airlines and Qantas will fly the A380 in the Pacific, and Emirates will fly it in Europe and Asia. U.S. airlines may even become customers, he said, particularly 747 operators United (UAUA) and Northwest (NWACQ).

"Both are big carriers in the Pacific and this is an Asia airplane," Leahy said. "At some point in time an operator who competes (there) will, I believe, want a competitive aircraft." Are they actual prospects? Leahy, considered one of the world's best aircraft salesmen, allowed that he will have dinner Thursday night with United CEO Glenn Tilton in Chicago.

Airbus estimates that about 1,600 large widebody models will be sold over the next 20 years, and Leahy said Airbus expects to garner more than half the market. But industry experts say Leahy is dreaming because airlines don't want great big airplanes. Instead, they have overwhelmingly endorsed the Boeing 787 Dreamliner, placing nearly 500 orders for the 200 to 300-seat aircraft. "Everybody has been looking for smaller long-range planes," said consultant Richard Aboulafia of the Teal Group.

Flying a plane as big as the A380 means offering less frequent flights, while passengers prefer to have a wide choice of flight times, said consultant Robert Mann. Thus, the A380 makes sense only at highly congested airports like Tokyo Narita and London Heathrow, where access is severely limited. Yet "you can count those sorts of markets on two hands," he said.

Leahy says there is room for both airplanes. And JetBlue's Barger noted: "Boeing and Airbus look at the world totally differently. The question is 'which horse do you bet on?'"

To view an interview with Ted Reed on this story, please click here.

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