Because its the most inexplicably stupid aircraft to have been deigned and built since Thunderbird 3.

http://www.glgroup.com/News/Honey-Those-Ba...gain-42987.html

So deferrals are the new cancellations in the aerospace industry?

Is that anything like white being the new black in the fashion industry?

Mr. McVitie introduces us to a completely new definition of the word "consultant"

Well they all ordered and / or operate the "most inexplicably stupid aircraft to have been deigned and built since Thunderbird 3". This says something about those airlines I guess. They probably need some serious consultation from Doug McVitie.

It works pretty good for a bad joke IMO http://www.youtube.com/watch?v=NfAxkZQXWh8

There is not a single consultant in the industry that does not have biases. When folks attack the messenger, it usually means they can't attack the message.

Yeah... Look at all the "consultants" that are commenting on just this thread alone!

Ok, I'll attack the message.

A deferral is not a cancellation. Therefore, no A380s have been cancelled and the order book has not shrunk. So Mr. McVitie's statement that it has is wrong.

Please show me the word cancellation anywhere in the article. I must be reading something different.

The title of his article states that airlines have shrunk the order book for the A380. That means that the A380 order book is smaller now than it was before he wrote his article on 3 September, 2009.

How does an order book get smaller? It's through cancelation of orders. So even if he didn't outright say it, he implied it.

But semantics aside, his title is still wrong because the A380 order book has not shrunk in the seven months prior to his writing the article. It has remained at 200 since 3 February, 2009, when KE ordered two. His implication that a deferral shrinks the order book is an incorrect one.

Well near term deliveries have certainly shrunk! Near term production has clearly shrunk! It looks like you do agree, no where did the article use the word cancellations.

The world economy being what it is, would anyone here be surprised if there were some Whalejet cancellations? If I'm not mistaken, Thai has been attempting to cancel their order without much success. But let's face it, at this point there are no cancellations other then those for the A380F.

A rumor (And that's all it is, a rumor) from inside LH is to keep an eye on their fleet adjustments.

But where in the title did he say production or deliveries?

Gee, I just noticed that the Boeing order book for B777's has shrunk - courtesy of two outright cancellations of B777-200ER's from Continental.

That's what I call 'real' shrinkage. But Mr McVitie apparently chooses to ignore that. Vendetta ? Objective reporting ?

Take your pick.

Again shoot the messenger instead of arguing against the message.
The heart of the article seems to be:
"The ramifications to the A380 project as a whole are serious because the deferral suggests SIA is finding it increasingly hard to fill its premium seats on this plane -- 60 business and 12 first class suites -- especially on the London-Singapore sector.

"SIA is seen as a bellwether in the industry and if the market leader has difficulty in maximizing yields on the A380, then other airlines that have ordered it will find the going even tougher."

But every airline is finding it hard to fill premium seats on any plane they're flying. Every sector on the planet is seeing double-digit declines in premium cabin traffic and revenues.

However, if large Economy cabins are now the way to go, when it comes to the ratio of Economy Seating to Premium Seating, the A388 has the best ratio in SQ's fleet at 5.5:1 vs. 5:1 on the 744 and 4.6:1 on the 77W.

For LH, it's 3.7:1 on the A388 vs. 3.5:1 on the A346, 3.4:1 on the 748 and a lowly 2.4:1 on the 744.

For AF, it's 5:1 on the A388 and only 3.3:1 on the 77W.

EK is the only current or near-term A380 operator with a superior ratio on the 77W: 5.7:1 vs. 4.4:1 on the A388. That's likely coming in handy since Economy Class travel in the Middle East is climbing, but consider that their two-class "regional A388s" will see a ratio upwards of 9:1, those planes will really rake in the bucks.

As for QF, well they've already admitted their cabins are too premium-cabin heavy and their A388 ratio of 2.8:1 and 744 ratio of 2.66:1 bear that out (both in four classes and counting Premium Economy as a premium cabin).

What a silly argument.

It's clear that smaller jets are the way to go.

Then, since McVitie bills himself as a 'consultant' .. don't you think it is strange that he doesn't choose to analyse the reason why SQ's premium traffic has taken such a hit ? Hmm, maybe it's 'easier' to blame the A380-800 instead ?

Common-sense would tell anyone that SQ's 'First Class' on prime routes on the A380-800 .. is actually an 'R' Class (Suite) surcharged fare - which is higher than it's competitor's F Class.

For instance, just this last weekend, advertised First Class prices for SYD-SIN-LHR return on the A380-800 - in the Australian market - were advertised. QF at $15,600 and SQ at a nip over $20,000. It's no wonder that SQ is taking a larger proportional hit on premium fares than anyone else.

Now, I have no doubt that SQ is offering corporate and Goverment discounts for those upper echelon individuals that may be candidates for a cushy First 'suite' on the SQ A380-800 .. in order to meet the competition. But that causes an automatic loss of potential profit, in order just to meet the competition.

Being somewhat 'greedy' and seeking to capitalise on your reputation may be great for SQ in times where the developed world is 'flush' with funds - but it doesn't do much for your loads, profitability and yields .. when the 'a$$ falls out of the market'. One could say that, with 'Suite' pricing, SQ has made an ugly rod for it's own back.

Contrast this policy with that of QF - who is directing it's lower yield / discount fares to the parallel B747-400/400ER flights .. and keeping the higher yield traffic on the A380-800.

Oh, and lets not forget that the A380-800 is such an ugly 'revenue' beast for SQ .. that it is introducing it on another prime route (MEL-SIN-LHR) .. as we speak.

Gee. Stitch's comments on Economy Class size / configuration might well be correct - and McVitie (the lauded 'consultant' chooses not to comment in his article - on such a basic premise.

So .. yeah. I'll attack the messenger .. particularly when his original premise is weak and based on emotional rhetoric.

" the most inexplicably stupid aircraft to have been deigned and built since Thunderbird 3". Not much of an analysis - but good for 'headlines' and attention, I guess ?

I think some folks are ready to defend clearly incorrect mud throwing if it supports their preference.

A bit dissapointing.

You might be correct - but only in respect of EK's comparitively short Transatlantic A380-800 services. Gee, perhaps that might be why EK withdrew them ? I seriously question how the likes of AF and LH think they will make profit on relatively short Transatlantic sectors with the A380-800. Oh yes, both have opted for a denser Y Class load configuration than the true longhaul operators such as SQ, EK and QF.

But, from this part of the world, your statement is sadly incorrect. The dynamics of the market are entirely different to the greater majority of those in the northern hemisphere (hence the reason that aggregation of passengers at hubs such as SYD / MEL / SIN etc) is critical. Far longer stage lengths, limited slots, constrained airports, notional time-window arrivals and departures .. all make an aircraft with lower seat/mile costs the most attractive proposition. Perhaps that is why the major carriers have purchased the A380 ?

We've already seen the effect of 'more and smaller' in the US marketplace ~ and looking at the inglorious operating results for all the US-based carriers, I'm not at all sure that this (suggested) model is the one that anyone should be following.

You see, the difference is that .. in the Australia-USA and Australia-Europe market - profitability depends on volume and the ability to move large numbers of passengers on a single service, rather than fragmenting the passenger base onto several services. The real problem here is fare-levels, not yields.

Yes, the yields are tragic .. but the ability to restore fare-levels is the 'key' here. Passenger numbers have remained reasonably resilient, ex Australia (that does not negate the fact that there has been a drop, but that 'drop' has not been as numerically as large as many other ports).

The problem is not aircraft size per se, but the number of new competitors in the Australian market and the constraining effect on fare-rises that they bring. Perhaps the fact that Delta and V-Australia have both introduced new daily B777 services into the Australian market has passed you by ? That's an additional 700+ approx. seats per day (or 4,900+ weekly seats), on the Australia-USA route alone. Naturally, some will yell 'capacity'. However, QF's decision to order the A380 dates back to 2000. V-Australia's decision to enter the market - 2006. DL's decision to enter the market - 2008.

So, it is plainly evident that DL and V-Australia's recent inept market entry timing .. is providing a barrier to fare-raising, which is happening in other markets. In these times, the GFC is ensuring that competition (not economics) becomes the major deominator of fare-levels .. and that in turn, affects yields. Yes, QF might be hurting on Australia-US, but so is every other operator, irrespective of frame type or frequency. I would hate to see UAL's figures on these routes with their smaller B747 and B777 fleet. The figures are clear for V-Australia and their smaller B777-300ER - a huge loss. And DL ? Well, it's not quite 'reporting' time for them yet. Naturally, it is in DL and V-Australia's interest to keep fares as low as possible in the short term, to ensure that they actually attract some market share. But their timing is hurting everyone - including themselves. Hence, the necessity for DL and V to file for code-sharing on the route.

So, as said above, McVitie's comments miss the mark (and the market) entirely. And, lest you think I am being 'too market-centric', remember that the majority of A380's currently in service are flying this market almost exclusively.

What is being forgotten here .. is that the A380-800 is changing the current and future markets - and the way we fly. Co-incidentally, that requires time for the market to adapt and change, let alone the travelling public and their expectations on the travel experience. Perhaps that change is not yet as direct or obvious compared the manner in which the original B747 was in the late 1960's-early 1970's. But then, airlines have learnt an awful lot about the mistakes made by operators of the early B747's in the 1970's.

One thing that is entirely evident is that the aviation market was in complete turmoil in 2007 (remember, the 'good' years - when airlines were mainly still losing money, SQ EK and QF excepted ?) before the A380-800 even began flying. Rather than being 'ridiculous', the A380-800 is becoming an agent of change. Those that fail to realise or acknowledge it .. are deluding themselves. The frame will be around for a long time hence .. and will eventually prove it's detractors wrong. Right now, it - like the industry itself - is facing the greatest single challenge to the industry in it's 90 year history.

Gee...I remember some old conversations about the U.S. carriers lacking "pricing power" in the U.S. domestic market due to low barriers of entry and too much competition. What goes around....

If you think its bad now, what happens when EK and QR start dumping capacity?

It will happen.

There are some fundamental differences, Aurora.

In the US domestic market, there are considerably more competitors (often 4-6 and sometimes even more, depending on route) .. and losses on a domestic market / sectors can often be hidden / sustained or ameliorated by feed, network structure, strategy and 'subsidisation' by other parts of the network. Entry costs are relatively low and market share is often 'king' - leading to an aversion to withdrawing from routes unless absolutely necessary.

On international routes, the number of competitors is often small. Entry costs are high ~ and the need to turn a profit (or break-even) on a long-range route is of paramount importance - for commercial, non-government backed carriers, at least. Operating costs are always higher .. and yield is often superior as well. But there is little tolerance (from either shareholders or management) for losses on prime routes.

What would happen on (Australian) routes where ME airlines start dumping capacity ? Simple. If proven, their authority to operate particular routes would be withdrawn by the Australian Government. And not just to 'protect' Qantas.

While Australia has embarked on one of the most radical 'Open Skies' policies with the rest of the world, there is still - within Government - a recognisanze of basic 'level field' operating policies. Predatory practices, such as 'dumping' capacity, fare-level pricing, unreasonable incentives etc .. would affect other foreign carriers into Australia as well as Qantas .. and such behaviour would be deemed by the Federal Government to be outside the scope of agreed behaviour patterns. It would become grounds for terminating a carrier's authority to operate here.

If you doubt the above, consider NW's short tenure in Australia, as an example. Both the Australian and Japanese Governments got very close to terminating the carrier's authority on Australia-US routes .. until NW saw the writing on the wall and voluntarily withdrew.

It's the world economic crisis, it doesn't take a genius to figure that out.

Let's see, 200 sold in nine years and half of them deferred. Brilliant!

Gee, I was unaware that all the 767, 777, A330 & A340's ever produced were purchased by US carriers. Who knew!


Australia is a unique market off the beaten path. 21 million people make it the 55th biggest country in the world. So I'd be careful making sweeping generalizations to the global market based on what's happening in Australia.

Did you forget who started this thread?

You got exactly the reaction you were looking for. Now you pretend to be disappointed.

I stated the thread with an exact replication of Doug McVities latest analyses. He is frequently qouted and his opinions used to start threads and draw conclusions. The reason I posted was to give a more complete impression of his analytic skills.

You can shoot the messenger all you want but the A380 will prove to be the most costly aviation disaster in commercial aircraft history-even worse than the Concorde.

Nothing wrong with that--just don't pretend to be disappointed.

You have to remember that a whole lot of folks would be more apt to believe any former Airbus employee than anyone working at EADS now, especially if the current employee is in sales or upper management.