Thanks largely to the A380, Airbus is for the first time number one in the class. However, the mood in Toulouse is cautious rather than celebratory

On many levels, the Paris air show will represent a scene of triumph for Airbus. The consortium will arrive in town for the first time in its 33-year history as the undisputed leader of the commercial aircraft industry, bringing with it 57% of the firm orders for new airliners, this after netting a scant 18% of orders only eight years ago.

And nothing represents Airbus's ascendancy as much as the A380. The super-jumbo has already become the leading model of very large aircraft, even though its first commercial flight will not occur for another three years when Singapore Airlines takes the first of its order of 10. Since it was formally launched in early 2000, the A380 has generated 95 firm orders, with eight more awaiting final signature. The tally for Boeing's venerable 747 in the same period is a more modest 61.

However, if there are celebrations in Toulouse, they are surely muted: market leadership is less fun in a market like today's. Similarly, even as it has supplanted the 747, questions linger around the $10.7 billion A380 programme as it moves into the critical stages.

The key tests for the A380 are both technical and market related. While no one doubts the aircraft will fly, it does remain to be seen whether it will operate as promised and also whether the programme upon which Airbus has staked so much will be a commercial success.

On the technical side, the paramount issue is weight. Airbus speaks of the A380 posting 15% direct operating seat-cost savings versus the 747-400 as if it were already achieved, but reaching this goal will necessitate that the aircraft meet its weight targets - always a cause for hand-wringing with a new type.

Aerospace analyst with Bank of America Robert Stallard says Airbus is entering the key period for the programme and the time when claims are first subject to a reality test: "This is when the most can go wrong - now the engineers have to turn their computer programs into real metal." He adds that stricter noise and emission requirements have recently brought unanticipated added weight to the engines - weight that must be subtracted from the airframe.

A380 programme technical head Charles Champion concedes that weight remains "an on-going fight", and, although the engineering team is "still above internal targets", it is "converging on them". In vowing that the aircraft will hit its weight specifications, Airbus marketing chief Colin Stuart says the A380 is like any new aircraft programme, in that it "goes through a pretty long gestation period - weight is added to the airplane and we find ways to take it off."

Turnaround times

The other key technical challenge has to do with airport operations, particularly turnaround times. A key Airbus promise to airlines was that they would be able to turn the A380 around in a time roughly equivalent to the 747. The company maintains that - because main deck door placement is roughly similar to its Seattle counterpart's - it will require no special airport modifications for airlines to be able to unload the aircraft in 15 minutes.

Boeing believes this is unrealistic. A source says the US manufacturer's evaluations of A380 operations with two airbridges predict it will be 40 minutes from the time the door is opened until the last passenger disembarks. Toulouse takes strong exception to such estimates. "Even with two airbridges, airlines will be able to turn the A380 around in under 90 minutes," says Stuart.

Much is made of the notion that airports might want to equip themselves with special A380 gates, which would feature a third airbridge. But Airbus says such facilities would only be necessary in special instances, such as will perhaps be the case with largest customer Emirates. The Dubai carrier plans to configure some of its 20 passenger variants of the model with two classes of service, allowing it to fly over 600 seats into the Indian subcontinent.

As important as the aircraft's ability to get off the ground will be the take off in sales, a test made more difficult by the current climate within the airline industry. Worryingly for Airbus, the poor climate has extended to Asia. Until the recent outbreak of the SARS epidemic, the region - upon which the company is counting to provide a home for many A380s - had seemed immune to the global airline gloom.

Airbus, however, believes that the current environment ultimately will have little impact on A380 sales. "The airlines are looking beyond where we are right now," says Stuart. "There are only a few delivery slots open in 2007, and there's no talk of deferrals." In fact, the company is talking of imminent new orders, even in the face of the downturn. It predicts that by year's end its tally of 95 will hit 125.

As the manufacturer is equipping its final A380 assembly line to produce four finished aircraft per month, this would keep the factory busy for the first two and a half years of assemblies. More importantly, it would take Airbus half way to the 250 units that are needed for the programme to break even, calculates Merril Lynch aerospace analyst Charles Armitage.

If sales in general look strong, however, those to the main carriers flying the high-density routes the aircraft was ostensibly designed to serve - routes such as London-New York and Tokyo-Los Angeles - remain stubbornly low.

Stuart says the absence of orders from these carriers does not overly worry him. To begin, he says: "The A380 has a very long life in front of it - we're talking an aircraft for the next 30 years and beyond." Secondly, he points out that the aircraft will be flown on the key routes almost from outset, pointing to the planned Tokyo-Los Angeles flight of Singapore Airlines and that of Virgin Atlantic Airways on London-New York. What is more, Stuart thinks these services may pressure the incumbents on the routes into placing orders of their own, as the newness and superiority of the A380 service will draw passengers away from the 747-flying home carriers.

Even so, he admits: "We have a lot of work to do to capture the major 747 operators." He concedes, for example, that the degree of interest so far shown by British Airways "is not at a level we would hope to see".

More significantly, Airbus has yet to make in-roads in Japan. Boasting the third largest economy and a densely packed population, the Japanese market would seem a perfect target for the aircraft. Indeed, when the programme was still called the A3XX, Airbus used 10 city pairs to illustrate the need for a 550-seat aircraft. Of these, nine included Tokyo.

The prospects of an A380 sale in the country any time soon appears remote. Flag-carrier Japan Airlines has an all-Boeing fleet and is the world's biggest user of 747s, currently flying 74 of the model, with another 5 on order.

Second carrier All Nippon Airways (ANA), which operates 33 of Boeing's largest aircraft, until recently looked to be a decent bet to get the A380 on the board in its most natural market. Any hopes of this happening, however, were dealt a blow in April, when the carrier announced it will replace its narrowbody fleet - at present evenly split between Boeing and Airbus - with 45 next generation 737s. The order means that ANA, too, will be an all-Boeing carrier.

No one, however, is completely closing off the Japanese market to the A380. There is little denying that both carriers could use more capacity than the 747 provides, as both fly long-distance flights - which minimise the value of multiple frequencies - from Tokyo and Osaka to large metropolitan areas in other continents, often several a day.

Bank of America's Stallard, for one, suggests the last chapter has yet to be written. He says that, while the Japanese thus far have been hesitant to buy Airbus because many of Japan's heavy industry firms do business with Boeing, market realities ultimately may force their hand.

The Japanese carriers are going to need to start thinking about replacing their 747s in about five years or so. When this time arrives, if the A380 has clearly proved itself a winner - with both passengers and accountants - Stallard believes a cheque from Tokyo is definitely conceivable. If such an order does make its way on to the Airbus books, there surely will be nothing muted then about the celebrations in Toulouse.

Half way there:A380 timeline




Authorisation to offer


Concept selection


Programme launch



Critical industrial commitments


Qantas places first firm order


End of concept phase


Emirates orders first freighter variant



First metal cut


FedEx places first freighter order


Definition phase completed



Main component assembly starts



Final assembly of prototype begins



First flight



Type certification


First delivery (to Singapore Airlines)

Source: Airline Business