Another Threat to the Airbus A380?

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By Paul Ausick Updated Published
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Airbus A380 Emirates
Emirates
The battle for supremacy between the world’s two jumbo jets may be turning into a war of attrition. Neither Boeing Co.’s (NYSE: BA) venerable 747 nor the Airbus A380 received a single new order in 2014. The aircraft makers are not just battling with each other, though. They are also fighting with themselves and their new, more fuel-efficient jets.

The latest example comes from Qatar, where the country’s flag carrier Qatar Airways said that it will compare the performance of its new A350 wide-body against the double-decked giant A380 and decide in 2015 whether to exercise its option to purchase three more A380s or to switch those options to the A350, which is the Airbus answer to Boeing’s 787 Dreamliner.

Qatar Airways received its first A350 on December 22, the first of 80 that the airline has ordered. The company also received the fourth of 10 A380s it has ordered on the same day.

The CEO of Qatar Airways, Akbar Al Baker, told the Financial Times that he would compare the performance of the two planes, but that he expects a “huge gain in fuel efficiency” from the A350 and that the aircraft will allow the airline to “open new routes and increase frequencies on its existing network.” He also said that the A380 has demonstrated “very positive performance indicators.”

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The primary customer for the A380 is Dubai’s Emirates airline with 56 of the jumbo jets currently in its fleet and another 88 on order. But Emirates is pushing hard for Airbus to put more fuel-efficient engines on the A380. So far only Rolls-Royce has shown interest in developing a new power plant for the plane. And there seem to be no other airlines beating at the door demanding an updated A380.

At the company’s recent investor meeting, Airbus CEO Fabrice Bregier said that Airbus “will one day launch an A380neo and one day launch a stretched A380.” Was that just a pep talk or will the company really follow through? Putting a new engine on the plane to satisfy a single customer is a huge risk, and one that Airbus would rather not take. At the same time, the company does not want to push Emirates into the arms of Boeing.

For its part, Boeing appears to have no plans for its 747 except to wind down production. The company first announced a production cut from 24 per year in April 2013 and most recently said it would cut production to about 1.3 planes per month in the second half of next year.

Airbus appears to want to continue building the A380, but customers want a more fuel-efficient version that will take several years and billions of dollars to develop. Boeing appears to be happy to let Airbus get out of this fix on its own.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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