British Airways Rumored To Be Considering A380 Order

A couple of days ago Emirates saved the A380 from extinction, as they placed an order for up to 36 A380s, including 20 firm orders and 16 options. The deal is worth $16 billion at list prices, though presumably Emirates got a much better deal than that.

This was really the lifeline that the A380 program needed. That’s because for years we’ve been hearing rumors that Airbus will be ending production of the A380.  I most recently wrote about this just a few weeks ago, as the plane hasn’t worked out quite the way Airbus was hoping.

While Emirates already has over 100 of these planes in their fleet and loves them, other airlines haven’t been as impressed, and we’ve seen very few additional orders. Airbus was approaching the point where they had to shut down production if they didn’t see more orders for the plane, so Emirates decided to keep the program alive.

There’s no doubt this was a tough decision for them. On one hand, they’d hate to see A380 production discontinued, given that they have over 100 of these planes in their fleet, and they’d quickly become obsolete if that happened. On the other hand, they don’t want to keep investing in a plane that they’re exclusively keeping alive.

Interestingly John Leahy, Airbus’ Chief Operating Officer (who is retiring soon), said that he’s “personally convinced more orders will follow Emirates’ example and that this great aircraft will be built well into the 2030s.” I can understand why someone in his position would want to be optimistic, though I was wondering if he actually believed that.

While nothing is set in stone yet, Bloomberg is reporting that British Airways is apparently in talks with Airbus over an additional A380 order:

Airbus SE is in talks to sell new A380 superjumbo planes to British Airways this year after securing a program-saving deal from Persian Gulf operator Emirates, according to people familiar with the matter.

The U.K. carrier, which currently has 12 A380s in its fleet, had said in the past that it was looking for six to seven second-hand A380s. Now it’s considering taking a larger number of new ones, said the people, who asked not to be named because the discussions are private.

John Leahy said in an interview on Friday that he was confident that Airbus would get one more A380 order this year, which seems fairly specific. I suspect this is what he was referring to.

What’s interesting is that there had been rumors of IAG (British Airways’ parent company) possibly buying or leasing some used A380s. Willie Walsh has even indicated that he could see some use for the A380 with Aer Lingus or Iberia.

Singapore Airlines is in the process of retiring the first five A380s they acquired about a decade ago. However, according to this story, British Airways has concluded that they’d be buying new A380s, as refurbishing used A380s would be too expensive.

That might seem counterintuitive, though perhaps it’s not totally outlandish. Not only can planes be expensive to reconfigure, but keep in mind that the first A380s built are also heavier and don’t have the same operating performance as new A380s, which is partly why Singapore Airlines decided to retire them. So I can see why they’d be avoiding these.

I’ll be curious to see if a British Airways A380 order comes to fruition. British Airways is in a unique position as they’re based at Heathrow Airport, which is slot restricted, and they own a large share of the airport’s slots. So their only way of growing out of Heathrow is to acquire bigger planes.

However, many argue that adding capacity at Heathrow isn’t necessarily in British Airways’ best interest. Given that they own the market, they also have control over a large percentage of the supply. If they started decreasing capacity (by using 787s in place of 747s, for example) they could theoretically increase prices, especially in the business market, given that a vast majority of corporate contracts in London are with BA due to their global network. Of course this doesn’t account for the impact of ultra low cost carriers like Norwegian flying out of airports like Gatwick. Still, I don’t think adding capacity for British Airways is a total no brainer.

I’ll be curious to see how this plays out. Who knows, we may even see A380s at Aer Lingus or Iberia!

Do you think British Airways will place an order for new A380s?

Comments

  1. I don’t think the Aer Lingus speculation will come to fruition… Runway at DUB is too short (8600ft).

    Iberia will be interesting, but not sure about economics. MAD is huge with a ton of opportunity for growth into a massive connecting hub if IAG wants.

    LHR I can see taking on more A380s since BA doesn’t really have a replacement in place for the remaining 744s. I think a mix of 77W and A380 makes the most sense. 77W would be perfect for routes like SAN/AUS/PHX that are currently served by the 744.

    If the infrastructure at AMS doesn’t change soon enough then KL might find themselves in a spot where the A380 will make sense.

  2. BA actually at its limit in terms of slots it can own at Heathrow after it bought BMI for extra slots, so by UK law it can’t expand by frequency any more. This was put in place to stop a complete monopoly and ensure competition remains at Heathrow. So if BA does want to expand, it would only be able to do so by adding capacity to existing routes which would make sense to order more A380s.

  3. @EP gk

    The 747-800 isn’t meaningfully cheaper than the A380 (especially if IAG negotiates a good deal), it has a cruise speed essentially the same, it’s smaller by about 80 passengers, and it burns almost exactly the same amount of fuel.

    The only reason the 747 program is still alive is the cargo version.

  4. If BA is really buying Emirates’ J class seat, to keep the same number of seats in its CW cabin it will need more real estate to accommodate what is a less dense layout. J cabins on the main business routes out of LHR are pretty often full at the moment, so they can’t reduce capacity without leaving profits on the table.

    And as others have said, there are no more LHR slots available to them. They need to get maximum revenue from their monopoly position (and the 3rd runway / additional terminal space looks more likely now, so their competition at LHR will in future increase).

  5. @ “EP gk says:
    January 20, 2018 at 11:35 am
    Why wouldn’t they consider the 747-8i?”

    That would be even more expensive since adding diversity to fleet portofolio would mean more resources are needed. Especially if it’s only about 5 or 10 fleets extra. Of course that might be different case if they’re ordering 50 or 100 more. They’d go better with A380 and 777X.

  6. I wonder how the operating costs of the 747-8I compares with the A380? While A380 makes sense for BA, if they buy at least 10-12, could the 747-8I be competitive, especially if they get a good price on it? With Emirates’ new order, Airbus now has enough orders to approximately 2024 or so.

    I am rooting for the 747-8I not because it is American but because it is potentially cheap.

  7. @Golfingboy – Dublin is building a second runway with a length over 10,000 feet, which I believe is slated to open in 2020. Will probably be later than that as they were facing some legal hurdles but that is the plan.

    Also Emirates was supposed to fly in an a380 for a visit, but has postponed it. I believe a fully loaded a380 minimum runway for takeoff (with room for aborted takeoff) is 9800 feet, so a premium-heavy a380 should be able to use Dublin’s existing runway.

    I think the real issue with Dublin are the gates, I don’t know if any are a380 capable, its a pretty tight squeeze at Terminal 2. Not withstanding the actual plane being able to park, the afternoon departures flood the US preclearance facilities as is with a few a333’s, can you imagine adding an a380 to the mix? And what routes could realistically support an a380 demand, even if its a premium heavy config? JFK which is already twice daily? Boston? What about when JetBlue enters the mix as believed? Thats a lot of added capacity.

  8. These rumours in the airline industry seem to be true almost always. Even Emirates order is the same number that was rumoured last year.
    I bet that EK waited and got a bloody good deal and BA is riding on that and has probably got a great deal too.

    BA hasn’t ordered the 777x and once the B747 is retired latest 2024, they’ll need bigger capacities on some roots like LA where at times to do 3x daily 747. I’d expect more than additional 7 A380s.

  9. Reportedly, BA management is looking into making it 4-5-4 in economy, but that will be mitigated by their new and improved tacos for everyone policy!

    Seriously though, I like seeing them take some risks. Only because it might oust Senor Cruz so he can go back to wherever he came from and this former crown jewel can shine anew.

  10. I completely believe that BA will order more a380s because at present that send their a380s to far too many destinations for their 12 a380s to operate all the time. I expect they will order 12 to 20 a380s in order to increase capacity for example the London Heathrow to Los Angeles route is operated by aircraft as small as the 787-9 and as big as the a380 as well as when the a380 flies to Miami one flight is operated by a 747 instead. I think BA will also use it to fly to other destinations that need more capacity such as New York JFK. If BA does order the a380 they will likely use it to replace the once daily 777-300er flight to Singapore which will then allow them to increase capacity on other routes such as to Tokyo. However I highly doubt that we will see an aer Lingus or Iberia a380 as these airlines do not have anywhere near the passenger numbers or route demand to operate an a380. Finally I can see them operating an 11 abreast configuration in economy and deploying these aircraft on leisure routes such as from Gatwick to Orlando. With this BA could then utilise their densified Gatwick 777 fleet more effectively to combat the increasing pain that is Norwegian. They could also open up more business focused routes from Gatwick such as to New York and also branch out to other airports in the UK such as London Stansted and Manchester.

    So this a380 order could not only change the entire make up of the British Airways long haul operations allowing them to increase capacity, improve customer satisfaction, open new routes and compete more effectively against Norwegian and other European airlines. Will BA order more a380s? I believe so. But how they will use these aircraft is what puzzles me most. I guess we’ll just have to wait and see.

  11. British has always liked their A380s and could use more as they retire the 747s. Additional 380s something that makes sense at slot constrained LHR and is a good match for the BA route network. Don’t see them going to Aer Lingus or Iberia but the BA order has a good chance of going through. Maybe there are still a couple of orders from China as well as existing operators that see the plane has its own niche.

  12. Noah

    Agree with much of that but LHR-JFK doesn’t suit an A380 because, on that route, it’s all about business flyers and they need frequency. BA’s routes there are almost a shuttle and a 777 is perfectly adequate.

  13. Would love to see Aer Lingus get the 380 on Dublin to Boston. Perhaps reducing the frequency of 330 flights to take advantage of the larger plane?

  14. BA will not use an A380 to JFK mainly because of how many business travellers they have travelling on open tickets. These travellers demand high frequency of departure times. BA have planes leaving every 30 mins from JFK in the evenings and using an A380 would ruin this model. AF and LH use A380 to JFK as they don’t have the same demand for business travel. If BA are to order more A380 perhaps see HKG up to 2 per day MIA daily all year round and has been mentioned in past DFW or ORD as new A380 routes

  15. Surprised that heads of states have not selected the 380 as it is one of only two four engined aircraft in production.

  16. I assume they will need to make additional gates configured for the A380. If they do, let’s hope they learn how to do it from other airports. Currently takes about 10 minutes to connect air bridges at LHR compared to about 2 minutes in SFO, LAX and HKG.

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