A-380 WhaleJet: Even Less Demand Than Earlier Predicted

We are now revising our current Global Fleet Demand Forecast to accommodate the decision by Boeing to build a follow-on to the 747.

As before, the net in-fleet requirements for airliners in the +400 seat category is not expected to be particularly robust in terms of growth. However, the advent of the 747-8 represents the injection of new dynamics in the demand mix.

First, if this slightly larger model has significantly better economics, it would face strong demand mostly as a one-on-one replacement for the -400, as well as some A-340s. Since used widebodies will likely have very limited aftermarket demand as passenger airplanes, this would tend to shove a lot of additional 747-400s into the cargo conversion arena, which could have no telling what effect on residual values.

However, one effect it could have would be to yank just enough potential orders out from under the A-380 to make that program really, really financially challenging for Airbus. Just a dozen feet longer than the -400, the new 747 would not face a world where relatively few airports could handle it, making it a much more flexible aircraft than the A-380. And if the 747-8 can deprive the A-380 of say, 50 or 60 orders it would have otherwise registered, it could make sleeping at night much more difficult for the folks at Toulouse.

You Want the A-380? Or What's Behind Door #3? Boeing by no means holds all the cards. The A-380's flying now. The 747-8 is at least three years away. That means the pressure's on Airbus to peddle as many A-380s as fast as possible in the next 12 months to keep potential customers from deciding to wait for the new Boeing.

So for airlines, it's going to be let's-make-a-deal time with the local Airbus salesman. That, however, puts pricing pressure on Airbus - pricing pressure created by what right now is essentially a concept airplane.

The pressure is also on at Airbus to assure that the A-380 doesn't disappoint when it comes to promised performance and delivery dates. Otherwise, the Europeans will find that they've essentially built the successor to the MD-11.

Regardless, The 747-8 Will Take A Toll. As it stands, the A-380 has about 160 orders, give or take what might be announced this week at the air show in Dubai. With the 747-8 on the horizon, our initial pass at global fleet needs now points to a demand for fewer than 350 A-380s over the next 15 years.