380, is the end near

[moa999]

Would also be interesting to see what sort of financing deal that EK got on these aircraft.

While the sticker price may have been low, I suspect the imputed lease cost has increased given the minimal (possibly zero) second hand market

 

[BAM1748]

Yes I would go so far as to say Airbus might be panicked by the idea of second hand 380s that can't be sold die to a lack of interest. Making the value of an aircraft the sum of the scrap parts, some reusable some not.

Book value will be high for the owner and market value zero.

He problem is the equity to debt ratio which will worry the banks and an airline might find themselves having to refinance a plane they have parked.

The more 380/ the have the bigger their financial debt problems.

Financiers won't want to touch them for refinance so their interest payments will go up as the equity debt ratio chamges or risk increases and the airlines will need to pay down chunks of debt in larger amounts.

Ah, if only they'd bought the tried and tested 747 which is loved for its versatility and longevity.

 

[dajop]

Ah, if only they'd bought the tried and tested 747 which is loved for its versatility and longevity.

Ah, yes, because the 747-800 has been so successful

Both being killed by the nimble twins, both light and heavy.

 

[BAM1748]

Ah, yes, because the 747-800 has been so successful

Both being killed by the nimble twins, both light and heavy.

But if I was a finiacier I would have preferred my customer want a 747, I could provide better rates because I know I have some resale residual in it when the first owner wants to turn it over because of increased maintenance costs which is part of the lifecycle plan.

Airlines own nothing except the equitiy in what they are paying off, so they need to lease things that have some value at the end not a huge hole of debt.

In reply, the airlines that did and do go with 747s will be getting a far better finance deal now when they need to roll over the debt. That could be in part why some airlines are wanting to take the 380s out of their fleets as the debt comes due on them.

Airlines wanted the 380 and have failed to follow through and support it and now the ferry man needs paying.

My employer does this in the rail sector here and North America and there it's also road and airport ground equipment at 50 plus airports. We finance the gear there and lease it out to the people who put there names on it.

It's simple but a wrong decision 10 years ago on what brand to buy will come back like karma.

 

[TheRealTMA]

...

Financiers won't want to touch them for refinance so their interest payments will go up as the equity debt ratio chamges or risk increases and the airlines will need to pay down chunks of debt in larger amounts.

...

No. You forget the politics in the situation. They override the base financial basis for calculations.

 

[BAM1748]

No. You forget the politics in the situation. They override the base financial basis for calculations.

Yes indeed, and the egos.

 

[juddles]

Forgive my ignorance, but with all this gloom and doom stuff about A380's, are any actually parked up rusting due to no interest in them?

 

[moa999]

are any actually parked up rusting due to no interest in them?

I believe at least one of the early SQ aircraft have been returned to the lessor (German fund Dr.Peters) with another four to follow in 2018.

MH also has some lightly used frames.

I think the rest are in active use.

 

[Must...Fly!]

Interesting article on SYD airport in papers on how the 380 flights have generated record business for them.

A380 boom delivers Sydney Airport record

Ah yes, good for them.

Airport Corporations - the only people guaranteed to make money at an airfield.

 

[andyhui01]

Forgive my ignorance, but with all this gloom and doom stuff about A380's, are any actually parked up rusting due to no interest in them?

9V-SKA is about to be scrapped due to no buyers after SQ returned it
9V-SKB is parked
9V-SKC is parked
9V-SKD hasn't flown for awhile

MH ones are basically parked most of the time anyway.

I believe SKB/SKC are due to be returned to the lessor and will most likely be scrapped for parts like SKA unless a buyer is found.

I am not sure how long Emirates plan on keeping its A380s but remember at one point, they were getting 1 delivered a month. Pricing on a used market (even for planes for parts) is based on demand/supply. Airbus must have had a guarantee on the retiring A380's and the newly ordered ones so Emirates could finance the planes.

 

[moa999]

I suspect it's good for all operators if a few are scrapped - as it adds some cheap parts into the chain (rather than having to pay Airbus for new).

But you can't scrap every model.

--

On engines.
Rolls Royce is currently testing it's Advance3 engine - essentially a new core with bits from the Trent 1000 (787) and Trent XWB (350) (both derivations from the A380 Trent 900)

Combine that with the UltraFan presently under development and you have a new engine due into service in around 2025 that could power the A380, 787 or 350

 

[TheRealTMA]

Ah yes, good for them.

Airport Corporations - the only people guaranteed to make money at an airfield.

My shares in SYD are going great guns! Make me more than 15% annual ROI since 2003.

Wise man once said 'Don't buy airlines, buy Airports.'

 

[rock86]

No. You forget the politics in the situation. They override the base financial basis for calculations.

Yep, doesn't matter how EK financials start to look as the government won't let them fail at any cost.

Yes indeed, and the egos.

While there's most definitely ego's within the Arab country sheikh's, I do respect them for having the tenacity to try to provide viable alternative industries for their economies and look towards the future and not just rely on their resources thinking they will always be the golden goose - it's something a number of governments could take note of rather then just looking for short term fixes to be re-elected.

 

[Strategic Aviation]

British Airways Rumored To Be Considering A380 Order - One Mile at a Time

 

[Ansett]

I hope there is a flurry of new A380 orders and they keep the programme alive for many more years. All that is needed now is for Qantas to leave the 787 on Asia runs and utilise the A380 and A350 ULR for long and ultra long routes.

 

[Must...Fly!]

It would be super interesting to see an economic calculation of flights of 6, 10, 14 and 18 hours between the 787, A350 and A380.

 

[Flying Fox]

9V-SKA is about to be scrapped due to no buyers after SQ returned it
9V-SKB is parked
9V-SKC is parked
9V-SKD hasn't flown for awhile

Not sure which of these birds will be flying again but Hi Fly will be taking delivery of an A380 according to this article.

Retired superjumbo no one wanted will take to skies again

I'll believe it when I see it fly. Happy to be proven incorrect.

 

[andyhui01]

Not sure which of these birds will be flying again but Hi Fly will be taking delivery of an A380 according to this article.

Retired superjumbo no one wanted will take to skies again

I'll believe it when I see it fly. Happy to be proven incorrect.

Looks like one of them (again, everyone talks about A380 to drum up press coverage so I will only believe when it flies). I suspect it will be SKB/C/D. SKA already had its engines removed and sold? I believe

 

[BAM1748]

Hi Fly has all Airbus so logical but the fact they have 11 aircraft might mean one super large one is going to be a strain unless they have a customer signed up for a few charters or lease customer.

 

[Flying Fox]

Hi Fly has all Airbus so logical but the fact they have 11 aircraft might mean one super large one is going to be a strain unless they have a customer signed up for a few charters or lease customer.

IIRC there was a comment that SQ was paying $1M USD/month for the A380 lease. Even at 25% that figure for a used aircraft lease, that's a huge fixed cost each month even before the engines turn.

I hope that Hi Fly are successful in getting their plans into the air.