Why Some Airlines Are Retiring the A380? Part Two
Created on: April 17, 2019
Updated on: April 17, 2019
Within the last article, we discussed how airlines are using the A380 to fill gaps or periods of high capacity. In this article, we will look at the cost implications of flying the world’s largest jet airline.
The A380 is just approaching its 12th birthday at the moment and right now on some airlines the interior is starting to age.
For a lot of airlines, it’s the business passengers that generate the most revenue and if the interiors start to age then they need to be replaced, right?
Yes, this is correct however how do you replace these interiors when your revenue isn’t growing as quickly as you had forecast because of the higher fuel costs overall. This is a growing problem with some airlines at the moment. The A380 is a huge plane and the cost of refurbishing these planes is a lot of money.
Some airlines tend to dry lease these planes so that they could use them for a certain period because they weren’t sure whether they fit their business models. Others purchased them and realised later on that they weren’t a good fit for their business.
Some of us tend to forget that planes and cars have some similarities in terms of depreciation. I know this first hand because I bought my car and this is a VW golf in 2002 for £12,000 new. If I were going to sell it right now I would get a few hundred pounds for it.
The same goes for the A380 in 2007 the list price was $US445 million and now its list price is $US250 million. This means it has lost nearly half of its original value in a period of just over 10 years.
Recently Air France announced that it was scrapping its A380’s https://airwaysmag.com/airlines/airfrance-reduce-a380-fleet/
Besides the fuel another reason why they are scrapping the A380’s is because it requires pilots that are high in seniority due to the sensitive nature of the plane. This means that the airline has to pay more to fly this type of plane.
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