Airbus A380

Superduperjumbo: Airbus Markets a Higher Seat Count on Its A380 Jet

Airbus A380

The Airbus A380 superjumbo plane has just gotten bigger—at least on paper.

Airbus Group NV has upped the advertised average seat count on its flagship plane in a bid to convince airlines the double-decker jetliner is a money maker.

Until recently promoted as a plane carrying on average 525 passengers, Airbus now markets the plane as seating 544 passengers. More seats mean lower unit costs, a key measure for airlines when they decide what jets to buy.

Airbus has been struggling to sell the A380, which first flew almost a decade ago and entered service with Singapore Airlines in 2007. The company has booked only 317 orders for the jet, with about half already delivered. Some airlines, such as Deutsche Lufthansa AGDLAKY and Air France-KLM, have reduced purchase plans, and Virgin Atlantic Airways has said it doesn’t expect to take the six A380 jets on order.

Airbus Chief Financial Officer Harald Wilhelm said in December that absent further deals, the company at the end of the decade may have to face the decision to cease building a plane that cost $15 billion to develop. Airbus only this year expects to start delivering A380s that no longer lose money.

Fabrice Bregier, who heads Airbus’s commercial-jetliner unit, insists the company will win more orders for the plane, which can accommodate up to 853 passengers in a single-class arrangement.

To help sway buyers, Airbus has worked on optimizing the inside of the plane so airlines can make more money with the jet. Airbus now advertises the A380—which has a price tag of $428 million, though buyers typically get discounts—with a four-class cabin, adding premium-economy seating. Those seats promise higher returns than standard economy and have been gaining popularity among carriers.

“Airlines can gain a revenue boost approximately equivalent to a 50% saving in fuel burn through applying this market-matched cabin segmentation and the latest cabin innovations,” Airbus says. The Toulouse, France-based plane maker also is offering an 11-abreast economy-class configuration to enable airlines to pack in more passengers.

The 13 airlines now operating the double-decker plane have them configured with fewer than 544 seats. Many have opted for cabins with fewer than 500 seats as they bet on making money by luring high-paying passengers with premium seating and luxury items, such as suites at Etihad Airways and on-board showers at Emirates Airline.

That reality prompted Airbus to drop the then-advertised 555 average seat count several years ago. Now the plane maker is trying to woo a new group of customers that may not be able to fill as many first- and business-class seats.

Emirates President Tim Clark—the biggest buyer of the plane, with 140 ordered—is urging Airbus to do much more, though, than just optimize the plane’s interior. He wants the plane maker to fit new engines to the A380 to boost efficiency more than 10%. Mr. Clark said this month the airline would buy as many as 200 A380neo aircraft, as the upgraded model is referred to.

Airbus says it is studying the business case for such a program. Airbus Chief Executive Tom Enders said in February that if putting new engines on the plane doesn’t make business sense, “we would certainly continue with important improvements that pay off for our customers in the future.”

Source… http://blogs.wsj.com/corporate-intelligence/2015/03/19/superduperjumbo-airbus-markets-a-higher-seat-count-on-its-a380-jet/

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