John Leahy, Airbus chief operating officer customers, says there are two A380 slots available by the end of 2015 and a few more in 2016. “I'm not concerned right now,” Leahy tells Aviation Week. But at any given time, he says he would like “to have around two years of production” as a backlog. He points out that potential A380 customers often do not want to wait several years for deliveries, thus ordering rather late.
Airbus has delivered 92 A380s to nine customers serving 73 routes and 32 airports. It plans to hand over 30 aircraft this year, although it collected only four firm orders in 2012 (from Transaero Airlines). It also signed a letter of intent for five more with Singapore Airlines, and while that commitment has yet to be firmed up, Leahy predicts it will be before year-end, bringing the 2012 A380 orders total to nine. Leahy also hints that he is talking with another customer that could place a “significant order” before Dec. 31, but that commitment would be initially a memorandum of understanding.
Next year, A380 production will drop to fewer than 30 aircraft per year because of the introduction of fixes to the wing, but Airbus says that it will average 30 per year over the next two years. It eventually targets a rate of four aircraft per month. Even at that rate, the current backlog would be sufficient for more than three years of production; at the slower output, it is equivalent to over four years, not counting cancellations from Hong Kong Airlines and Kingfisher.
Leahy says he is still convinced “that we made the right decision” in building the A380. He expects demand to improve next year and “certainly” in 2014. He attributes the current market weakness to legacy airlines being more affected by the downturn than low-cost carriers, which have placed most of the big orders for other models such as the Boeing 737 MAX and Airbus A320NEO. But he asks, “how are we going to double [revenue passenger kilometers] in the next 15 years,” other than by using larger aircraft?
Unlike the A380, which is tied solely to the fortunes of the high-capacity passenger market, the 747-8 backlog mostly consists of freighters, making it largely beholden to the ups and downs of the international air cargo business. Having recently sustained the loss of five valuable 747-8F orders from the leasing unit of Dubai Aerospace Enterprise (DAE), Boeing acknowledges that the cargo market is battling tough times.
With the DAE cancellation, Boeing is left with net firm orders for just two 747-8Fs in 2012, following orders for five from Air China and two from an unidentified customer. The result is that, after 37 deliveries and despite Boeing's best sales efforts, the firm-order backlog has shrunk to 71, or just under three years of production at the current rate of two per month.
Launch customer Cargolux has already taken seven of 13 747-8Fs on firm order, but it is searching for a new strategic partner after Qatar Airways indicated it wants to sell its 35% stake. The two carriers have clashed on strategy issues, particularly Qatar's proposal to convert some of the 747-8 orders into those for the much smaller 777F.
The Cargolux case highlights a fundamental concern about the 747-8F: It is a very large freighter and, with cargo markets in a crisis mode now, there are few who can afford it. “The aircraft is simply too big for us,” says one airline CEO, who has both considered buying the type and looked at investing in Cargolux.
Yet Boeing has no plans to change the production rate and maintains its faith that the 747 freighter and passenger model market will return to health in the longer term. However, with deliveries outpacing orders, will that occur in time to sustain the 747-8 production line? The answer is “yes,” according to 747 Vice President and General Manager Elizabeth Lund, who says that despite the current market softness, freight operators continue to take delivery of the more efficient, newer models while grounding older, less economical ones such as converted 747-400BCFs.
In the short term, Lund notes that the order hiatus is allowing Boeing to burn off its backlog which, thanks to the program's earlier delays, swelled to a large size. “We're pleased with the 37 [deliveries] over 14 months,” she says. Nine were handed over in 2011 and the balance in 2012. Of these, all but 10 have been freighters: Four passenger models were delivered to launch customer Lufthansa and six to completion centers for eventual use as business jets.