Airbus Drops A380 Super-Jumbo Jet

In June, 2006, I posted about the different strategies and market forecasts of Airbus vs. Boeing.

Airbus thought passengers would be flying hub to hub in giant jets like the A380. Boeing thought passengers would be flying point to point in smaller jets.

Now, more than 12 years later, Airbus has decided to discontinue its super-jumbo A380. Orders had been dropping off . . . and now Airbus will remove the 380 from its product line.

It turned out, Boeing's vision of how passengers would prefer to travel, coupled with tech advances in jet fuel economy and airline decisions, made a big difference in marketing new commercial jets.

Airbus's Strategic Vision

Ten years ago, I began this blog by contrasting the long-term projections of Airbus and Boeing, and the effect on their strategic decisions. Airbus saw great potential in building a huge jet to fly 500+ passengers between hubs...Boeing saw more potential in not-so-huge jets for point-to-point flights.

On its corporate website, Airbus says this about the A380:

Designed for air transport needs in the 21st century, its unique size allows airlines to maximize their revenue potential through an optimized, segmented cabin. 

Now Airbus has learned that Singapore Airlines will not renew its ten-year lease for the gigantic A380 passenger jet. Other carriers are thinking about smaller Airbus jets instead. Filling so many seats on the A380 is one element of how airlines consider what planes to lease or buy. Fuel economy is another element. Each airline also has its own strategy for satisfying customers' needs and making a profit.

Emirates Airlines has successfully built high volume on the basis of its A380 jets. The President of Emirates tells Business Insider: "Airport congestion around the world is getting worse. And up-gauging aircraft is a solution for this." Meaning: Emirates uses A380s to fly a lot of passengers from one huge hub to another.

The double-decker configuration requires a special airport gate, which means airlines must schedule carefully. In fact, although Chicago's O'Hare has had runway capacity to fit the A380 for a few years, it has only one gate for the jumbo jet (more are in future plans).

So Airbus's strategic vision has faced turbulence in part because of infrastructure issues and in part because of how its customers plan for their customers.