Jumbo Airbus A380 Defies Skeptics

PARIS (TheStreet) -- Four years ago, when the Airbus A380 first flew, the skepticism was overwhelming because the plane was big, the delays were long and the demand seemed limited.

Today, the A380 story is a far different story, one of new service to popular routes. This month, Air France began Paris-Washington Dulles service, and Lufthansa began Frankfurt-Miami service.

It is not just major international gateways that have A380 service. Air France also flies the plane between Paris and Montreal, while Emirates flies it from Dubai to Manchester, England. "We've been surprised by the number of places it's gone," said Airbus spokesman Clay McConnell. "It's not just flying to London Heathrow."

Still, the route selection is a bit puzzling. Lufthansa, a United ( UAL) partner, flies into Miami, an American ( AMR) hub. Air France, a Delta ( DAL) partner, flies into Dulles, a United hub.

Aviation consultant Robert Mann said the European carriers sought out markets where they do not require more than a single daily frequency. "At JFK, you need frequencies" to meet business travelers' schedule demands, he said. Additionally, connecting with a partner in the partner's hub could interfere with a carefully calibrated operation that feeds appropriately-sized aircraft at several times during the day.

Nevertheless, as the Paris Air Show opens, the A380 "continues to be the belle of the ball," McConnell said. At least one carrier, Hong Kong Airlines, is expected to announce an A380 order. Airbus currently has 234 A380s on order and has delivered 49. More than 20 deliveries are expected this year.

Late in 2007, Singapore Airlines became the first airline to fly the A380. It currently has a dozen of them, operating from Singapore to Sydney, Melbourne, Hong Kong, Tokyo, Zurich, Paris, London and, as of July 1, Los Angeles. Singapore originally ordered 19 aircraft, and awaits its remaining seven; it also has options for additional planes.

"The A380 has fantastic reliability, gets consistently high marks from our customers, and is very fuel efficient," said Singapore spokesman James Boyd. The aircraft is 12% to 20% more fuel efficient than its competitors, airlines say.

Singapore carries 471 passengers on its A380, including 299 in coach, 60 in business, and 12 in luxurious suites. The carrier has elected to develop new levels of air travel luxury in the aircraft; one unique feature is suites that can be turned into doubles with double beds as well as two 23-inch TV screens. This service is not inexpensive -- the fare on the Los Angeles-Tokyo-Singapore flight is about $13,500 per passenger.

Airbus' Jumbo vs. Boeing's Dreamliner

It is interesting to compare the development of the A380 and Boeing's ( BA) 787. Boeing looked at developing a larger aircraft, competitive with the A380, before deciding on the 787 because its customers indicated they preferred something smaller. Now, both airplanes have suffered long delays and face years of sales before breaking even on all the development cost.

The principal problems in development of the A380 were that the airplane is so big -- "one A380 is the equivalent of eight A320s, in production terms," said consultant Scott Hamilton -- and that Airbus found incompatibilities between French-developed software and German-development software.

As a result, early delivery aircraft had to be hand-wired. This is fine when you are fixing an electric light, but tougher in an airplane that contains 330 miles of wiring.

"Over time, the A380 will break even or be profitable," Hamilton said. "The question is how much time? It will easily be ten or 15 years."

Hamilton offered a similar estimate for the 787, saying that profitability may be delayed until Boeing has sold about 1,100 aircraft. The A380 development program faced far fewer problems than the 787 program, which sought to develop a new global production model with suppliers assuming much of the risk and responsibility.

Said McConnell, "Development wasn't that big an issue for us. Our issue was never one of a problem with the aircraft; it was production. It is such a large piece of real estate that is highly customizable for airlines, so candidly we didn't do a good job figuring out how to customize all that real estate."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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