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A380 operators finding configuration sweet spot as value halo persists

When the latest A380 delivery to China Southern occurs at the beginning of March, there will be 70 Airbus A380s criss-crossing the globe. With close to 30 more expected to be delivered over the year, the in-service fleet will approach 100 by the end of 2012.

This year, two new operators – Thai Airways and Malaysian Airlines – will join the existing seven airlines family of A380 operators. Airlines are still finding the sweet spot in terms of A380 seating but more and more configurations are edging above 500 seats, after much experimentation.

Several carriers have more than one configuration

Delivery customer, Singapore Airlines, which now operates 16 A380s, has two different configurations for its A380s. It has a low-density 409-seat configuration with the upper deck reserved exclusively for business class and a higher density 471-seat configuration, with economy seating at the rear of the upper deck.

The other large A380 operator, Emirates, has 20 in service and 70 more to come. It too operates two different configurations for its A380: an ‘ultra long-range’ configuration with 489 seats and a ‘long range’ configuration with 517 seats, adding an extra 28 economy seats to the lower deck. A planned medium-haul configuration, with around 620 seats in two classes, has been considered by the airline, but so far has not materialised.

Air France, with six A380s in service, also has two different configurations. Its first configuration featured 538 seats in three classes, a figure close enough to the 525-seat standard configuration that Airbus suggests. However, the carrier has phased this out in favour of adding 38 premium economy seats, at the expense of 60 economy class seats, resulting in a four-class, 516-seat A380.

Also going the premium economy route is Qantas. The Australian carrier operates its A380s with just 450 seats in four-class configuration. Its A380s work as high yield-focussed machines: if the premium economy seats are included, 26% of the seats on its A380s are a premium product. 

The only other carrier with a comparably high proportion of premium seats is Korean Air. Its A380s operate with three classes and just 407 seats, the lowest density of any current operator. Startlingly, it has just 301 economy seats on its A380s. Like Air France, it has an all-business upper deck, which includes a bar and lounge area.

Emirates and Korean make an art form of marketing the A380 brand

Korean’s A380s also feature a duty free “showcase area”, for those very active duty free-buying Korean passengers wanting to purchase luxury items in-flight. Adding to the marketing impact by using the aura around the A380, the carrier also introduced a ‘Celestial Bar’, supported by vodka brand Absolut which, according to The Moodie Report, simultaneously launched a super-premium vodka, Absolut Elyx, especially for the occasion.

Just as the marketing value for Emirates of introducing in-flight showers in a relatively dead part of the fuselage was worth thousands of news reports, so the success or otherwise of Korean’s duty free area was assured – in marketing terms – even before the aircraft flew. The airline’s “Where dreams are made” promotional video made no secret of the profile it sought to create from introducing the new aircraft.

Lufthansa has one of the highest density configurations

Lufthansa’s A380s also feature 106 premium seats, eight first and 98 business all on the upper deck. However, Lufthansa fits 420 economy seats on the lower deck, for a total of 526 seats, one of the highest all around seating densities of any A380 operator.

Around 510 seats appears to be the norm that airlines are settling for with the A380, although in a multitude of different configurations. China Southern, Malaysia Airlines and Thai Airways have all settled for just under 510 seats in three classes, although the number of premium seats varies considerably.

Two low-cost airlines, Skymark and Air Austral, plan to set the extreme parameters

It may now be a couple of years before we see any truly radical A380 configurations. Perhaps the most intriguing is Japan’s Skymark Airlines. To date, the only truly successful independent Japanese domestic LCC, Skymark, with six orders, has paradoxically proposed the lowest density of all, a two-class, 394-seat configuration, with 114 60-inch pitch business class “near lie-flat” seats and 280 premium economy 38-inch pitch seats for long-haul services to New York, London and Frankfurt initially, beginning in 2014.

Meanwhile, leisure airline Air Austral, at the top end of the scale, is planning an all-economy layout of “around 840 seats”.


A380 seating configurations

Airline

First delivery

A380s in service

Total Seats

First

Business

Premium Economy

Economy

 
 

Singapore Airlines

 Oct-2007

16

409

12

86

 

311

 

471

12

60

 

399

 

Emirates

 Jul-2008

15

489

14

76

 

399

 

517

14

76

 

427

 

Korean Air

 Jun-2011

4

407

12

94

 

301

 

Lufthansa

 May-2009

8

526

8

98

 

420

 

Qantas

 Sep-2008

10

450

14

72

32

332

 

Air France

 Oct-2009

6

516

9

80

38

389

 

538

9

80

 

449

 

China Southern

Oct-2011

-

506

8

70

 

428

 

Malaysia Airlines

 2Q2012*

-

508

8

54

 

420

 

Thai Airways

 Aug-2012*

-

507

12

60

 

435

 

Skymark Airlines

 2014*

-

394

 

114

280

   

Air Austral

 2014*

-

“around 840”

         

Not all the popular attention is welcome

As the aircraft moves into its fifth year of commercial service, the A380 still attracts attention out of proportion to the numbers in service. The story surrounding the cracking in some wing brackets in the aircraft has rumbled for more than a month and appeared in just about every conceivable form of media. Airbus, conscious of the need to safeguard the aircraft’s high brand recognition, is moving forward with a solution, which is expected cost up to EUR100 million.

Can the value halo survive higher density configurations?

Airbus expects A380 sales to roughly match deliveries this year. Despite the issue, the aircraft is proving popular with passengers and its operator clients, many of whom report both higher load factors and higher yields on the A380. Airbus chief operating officer, John Leahey, says he is confident that as the A380 network continues to grow and the aircraft carries a wider range of passengers that the order book will be self-replenishing.

There is still a long way to go before Airbus breaks even commercially on the A380, but it will be reassuring for the manufacturer that the aircraft is still able to attract a luxurious halo that converts to dollars for its operators.

Where the current 500-ish level of seating currently appears to be the norm, it will be interesting to see how this evolves over time, especially if its buyers are confronted by a much more price sensitive market. And, more importantly, if the configurations do trend upwards, whether the value halo persists.