Airbus SAS, the world's largest plane maker, today will unveil its 555-seat A380, a 12 billion-euro (US$16 billion) wager that airlines will order giant aircraft to ferry passengers between major airports over the next 20 years.
The A380 will surpass Boeing Co's 35-year-old 747 as the world's largest passenger plane and is meant to help the Toulouse, France-based plane maker maintain its lead in sales and deliveries over Chicago-based Boeing, said Airbus Chief Executive Noel Forgeard on January 12. Boeing has no plan for a competing aircraft.
Airbus said on December 15 it expects to receive demand for 1,250 planes that can each seat at least 400 passengers and 398 freighters through 2024. It aims to get contracts for 700 of those aircraft and says the A380 will break even with 250 orders. Boeing, by contrast, estimates demand for about a third of the large planes.
"This is a plane for big airports, flying to other big airports," said Joseph Campbell, an analyst at Lehman Brothers in New York who has "overweight/positive" ratings on Airbus parent European Aeronautic, Defense & Space Co (EADS) and Boeing. "Maybe there's no room for two planes, but now, there's only one."
The double-decker A380 plane has a wingspan of 80 meters (262 feet). It is 73 meters long and weighs as much as 569 tons when fully loaded for takeoff. It will have a range of 8,000 nautical miles (14,820 kilometers) compared with 7,600 nautical miles for the Boeing 747-400.
Rising shares
Shares of EADS have risen 28 per cent over the last 12 months while those of Boeing are up 19 per cent on expectations a recovery in airline passenger traffic will lead to increased demand for new planes. Traffic rose more than 10 per cent in 2004 from a slump that began with the 2001 terrorist attacks on the United States.
The European plane maker has invited about 5,000 people to attend the A380 inauguration at its Toulouse headquarters. Guests include French President Jacques Chirac, British Prime Minister Tony Blair and German Chancellor Gerhard Schroeder. France, Germany, Spain and the United Kingdom contributed 3.5 billion euros (US$4.58 billion) in loans to the 12 billion-euro (US$15.7 billion) development cost.
Airbus so far has firm orders for 139 of the planes and commitments for another 10. Customers include Singapore Airlines Ltd, Deutsche Lufthansa AG, Emirates, Air France-KLM Group, Virgin Atlantic Airways, and Korean Air Co. FedEx Corp and United Parcel Service have ordered the freighter version.
Korean Air, the world's second-largest air cargo carrier, last year ordered five A380 freighters. The A380 "saves flying time," enabling the airline to "move more goods on one flight and help save money," said Ken Choi, president of the Seoul-based airline's cargo division, when Korean Air placed its order in March last year.
Higher sales
Forgeard said on January 12 that the A380 will contribute as much as a third to the company's sales by 2008 and help revenue rise 50 per cent by 2010 to about 30 billion euros (US$39.21 billion). He said Airbus plans to build 35 of the planes annually from 2008. The plane has a list price of US$280 million, compared with US$198-227 million for the 747-400. A380 test flights are scheduled to begin in March. The first plane is supposed to enter service in June 2006 with Singapore Airlines.
Boeing has received orders for 661 of the 747s since the plane was launched in the mid-1960s, of which 629 have already been delivered. Orders have slowed since Airbus started developing the A380. Over the last five years, it received orders for 81 of the 747s and delivered 120, according to information on its website. No passenger versions have been ordered since 2002.
The US plane maker decided to develop a smaller plane, the 7E7, which would carry about 250 passengers on point-to-point trips such as between Chicago and Dusseldorf.
The A380 will carry passengers between major hub airports, such as London's Heathrow to Tokyo, and then passengers would catch connecting flights. Boeing says there will not be enough demand for that type of travel to justify the investment expense in the A380.
"It's just a big airplane for a small market," Randy Bassler, Boeing's vice-president of airline marketing, said in an interview on January 12. "We really believe in our forecast that there's a good market for about 400 of these."
(China Daily January 18, 2005)
