With agreements from two new customers in as many months, airframer expects busy year ahead for more order talks
Airbus is confident that the recent flurry of new business for the A380 signals the beginning of an upturn in fortunes for the sleeping giant.
After a lean sales spell, two new customers have been added in almost as many months as Airbus looks to underpin the orders from the original launch airlines. Many of these are - or are about to begin - earning money with the 500-seater that Airbus is convinced is a game-changer.
"We think this is going to be a busy year," says A380 product marketing chief Richard Carcaillet. "There are a number of campaigns and discussions going on."
The sales revival began in November when Japanese domestic carrier Skymark announced an agreement for four aircraft (which is yet to be firmed up), and this was followed by January's order from Asiana for six aircraft, taking total sales - 10 years since the launch - to 244 aircraft from 19 customers (including lessor International Lease Finance and a VIP operator). Carcaillet says that the earliest slots now available are for 2015 deliveries.
Who will be next to join the club?
South Korea's Asiana perfectly fits the Airbus A380 salesman's target airline profile. Based in one of the fast-growing Asian regions, facing direct competition from a (soon to be) A380 operator, Korean Air, and a long-standing Boeing 747 operator, Asiana would have been high on the sales team's list of prospects for the A380.
The airline operates four 747-400s and will replace them with the A380s from 2014. It will deploy the new double-deckers from its Seoul hub to points in Europe and the USA. "The significantly reduced operating costs and fuel efficiencies will enable us to enhance our productivity and reduce our carbon footprint," says chief executive Yoon Young-Doo. Most of the airlines that have already signed up for the A380 have had large 747 fleets, and there are still some significant operators that are yet to commit and must be viewed as key potential new clients for Airbus. These are largely Asian airlines - Cathay Pacific, China Airlines, EVA Air, Air China and the two Japanese network carriers.
However, Airbus's A380 head of product marketing, Richard Carcaillet, does not rule out the possibility of securing business from the two significant US 747-400 operators - Delta Air Lines and United Airlines. "There is clear potential [to sell A380s to US carriers], which becomes glaringly obvious with the consolidation between Northwest and Delta and United and Continental," says Carcaillet. He expects the A380's benefits to become increasingly clear to the US carriers as the competition grows from rival airlines introducing the double-decker on more of their routes. Intriguingly, Boeing did not have its stretched 747, the -8I, at the forefront of its Asiana campaign, says A380 product marketing director Keith Stonestreet: "The 747 wasn't coming out as one of the key competitors."
Stonestreet hints that Boeing's apparently unsuccessful pitch was based around the smaller 777-300ER and the view that the best way for Asiana to grow capacity was with a larger number of smaller widebodies. "I don't believe an airline [like Asiana] that has an existing network with key routes into congested points can do without the A380," says Carcaillet.
re-confirmed its faith in the A380 last year with a top-up order for 32 aircraft, taking its total commitment to 90, but this was the first significant endorsement for the A380 for several years. Before the Skymark deal, Airbus had added just two new airlines to its A380 customer list since 2006.
But Airbus's challenge is to secure the new business in its sights from the network carriers that are yet to commit, and achieve significantly better pricing on the deals than with the launch customers. All early A380 customers negotiated significant "launch discounts", compounding Airbus's efforts to recover the excessive losses that the programme incurred due to the lengthy production delays.
Airbus boss Tom Enders claimed recently that new contracts "are no longer at launch prices", but these may still be some way from the level targeted by the Airbus bean-counters. And to convince blue-chip network carriers to pay top dollar for the jet, which officially retails for $350 million a shot, Airbus must make its marketing line - much-touted by chief salesman John Leahy - that "it takes an A380 to compete with an A380", a reality. When it does, Airbus is sure that target customers such as Cathay Pacific and the Japanese network carriers should come knocking.
Japan's deep-rooted links with Boeing have always made the country's airlines a hard sell for Airbus, but Japan Airlines and All Nippon Airways - which have been major customers for the Boeing 747 - are longstanding targets for the A380 sales team.
They are already feeling the pressure from some of the existing A380 operators that fly the A380 to Japan, and this has been compounded by the recent breakthrough agreement with Tokyo Haneda-based domestic operator Skymark, which will use its four A380s for new long-haul services. "The Japanese carriers operate in a concentrated market and very much have the potential to use this aircraft. It is a matter of time," says Carcaillet.