
Boeing 747 Gets a Reprieve and the Airbus A380 Gets a Cutback
Production of both of the world's two best-known four-engine jumbo jets is in decline, but the two airplanes took different directions at the 2016 Farnborough Airshow.
The Boeing (BA) - Get Report 747 found a new customer, albeit a cargo customer. The Airbus A380 took a production cut.
The 747 may or may not have been given a "modest reprieve," said Richard Aboulafia, Teal Group aerospace analyst. ""The A380 is on its way to an inevitable death, hastened by {Tuesday's} Airbus announcement,"
The Boeing 747, once the most glamorous passenger airplane in the world and even today the airplane that carries the president of the United States, is now viewed largely as a cargo aircraft with diminishing production. Boeing slowed production to one jet a month in March.
But the program got a reprieve on Tuesday, when Russian cargo carrier Volga-Dnepr said it will acquire 20 747-8 freighters. The deal includes four aircraft that have already been delivered.
The Volga-Dnepr fleet also includes a third classic jumbo jet, the Antonov An-124. "Volga-Dnepr intends to provide strong evidence to the market that the unique An-124 and Boeing 747-8 four-engine freighters are still essential to serve the fast-changing requirements of our customers worldwide," said Alexey Isaykin, president of Volga-Dnepr Group, in a prepared statement.
"We continue to be committed to the future of these glorious aircraft," he said.
Meanwhile, Airbus said Tuesday that it will reduce 2018 production of the A380 to just 12 planes a year, about half of 2016 production. The plane, first delivered in 2007, never won broad acceptance but rather accumulated estimated production costs of about $28 billion that will never be made up.
"We are establishing a new target for our industrial planning, meeting current commercial demand but keeping all our options open to benefit from future A380 markets," Airbus CEO Fabrice Bregier said in a prepared statement.
Airbus once projected it would sell more than 1,200 A380s over 20 years, but so far it has delivered 193 of them and has orders for 126 more. Emirates, which has ordered 172 and taken 75, is the primary customer. The carrier said its scheduled deliveries "will not be impacted" by the production slowdown.
"If Emirates is taking a dozen a year, and there are other customers, where are they?" Aboulafia asked.
"It's annoying that even though we have always had pessimistic {order} numbers, our numbers have always been higher than what it turns out to be," said Aboulafia, a longtime A380 skeptic. "We're really chasing its death this time."
Both the 747, introduced in 1970, and the A380, introduced in 2007, were conceived at times when their planners assumed the world wanted bigger and then even bigger four-engine airplanes.
The 747 was successful and Boeing built more than 1,500 of them.
But what the world wants today, it turns out, is smaller, lighter, two engine long-distance airplanes, which is why the Boeing 787 and the Airbus A350 appear to represent the future.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.









