State of the Airlines

Thursday, February 03, 2005

NEWS: A380 - Flying Cruise Ship or Super Economy Model?

USA Today has a good article regarding some of the hype surrounding the Airbus A380. Specifically, industry analyst are questioning plans to put high end amenities like work out rooms, casinos, beds and duty free shops right on the aircraft. Not surprisingly, Richard Branson, Chairman of Virgin Atlantic Airways, is at the center of that hype. Instead the analysts believe airlines who operate the A380 will need to fly it very close to its 840 passenger limit to make money on it.

Branson's plan would put him somewhere in the 500 seat range. Airbus believes most operators will average around 555 seats with 3-class (first/business/economy)set up. That's a really wide discrepancy between what the analysts think and what the Airbus marketing plan says. I tend to think it will end up somewhere in the middle with the analysts being closer to reality. I do not believe that this aircraft will be even close to cost effective for the first few years of operation and will be only marginally successful after that. It will be a niche aircraft much like the Concorde...just slower...and with way more people.

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