The two behemoths of the sky, the A380 from Airbus and the Boeing 747, may be coming. With airlines much more interested in not-as-big but much-more-efficient planes and the market for freight models shrinking, both companies are likely to end production in the not-too-distant future.
Boeing has already told financial regulators, in a filing quoted by Reuters, that “If we are unable to obtain sufficient orders and/or market, production and other risks cannot be mitigated, … it is reasonably possible that we could decide to end production of the 747.”
And the A380, which has had no real new orders for several years, is now largely down to one customer, Emirates, which owns or is in line for about half of all the A380s ever built or on firm order. Because so many others have cancelled orders, it is now receiving them at a faster rate than it has intended…or can really use.
Airbus can barely cover costs at the current production rate, and will never recover some €25 billion in development costs that went into getting the plane into production. As a 4-engine plane that can only make money with large numbers of passengers, it can’t compete well against the B777/B787/A350 planes that have fewer and newer engines, and allow more flexible routes.
Even Emirates, committed as it has been to the A380, has seen that; it’s booked an order for 150 of Boeing’s next-generation 777-9X with deliveries to start in 2020. Same range as the A380, more cargo room, 20% fewer seats—and two, not four, hyper-efficient new engines.
The 747 is in a different situation: The four-engine/old-engine math applies there, too, but it has been a commercial success over the nearly 50 years since it was first introduced, and over 1500 have been built. It’s credited with changing the industry by creating relatively cheap seats for mass travel. In recent years, the freight version has been a seller, but with shrinking air cargo and planes that can carry it cheaper, the end may be near.
For more details, here are two stories from Forbes.com and USA Today.
