Why The Airbus A380 Is On A Dead Track And Will Be Beaten By The Boeing 777X

Aug.18.14 | About: The Boeing (BA)


Boeing about to take advantage of the slow market for VLAs.

New engine technology obsoletes the Airbus A380.

Boeing already has the fuel efficiency the Airbus A380 misses.

The Airbus (OTCPK:EADSF) A380 is one of Airbus' prestige projects and entered service with Singapore Airlines in 2007.

The Airbus A380 was introduced to dethrone the Boeing 747, but also hauled in significant orders from Asian airlines. At the time of service entry the Airbus A380 used technologies that made the A380 a fuel efficient airplane, a suitable alternative to the Boeing (NYSE:BA) 747-400. The A380 was able to replace multiple 777 flights per day by an A380 flight, thereby reducing costs.

With new engine technology being applied on airplanes such as the 777X, the Airbus A380 concept is being challenged and airlines are demanding a more fuel efficient A380 to reduce fuel costs.

Airbus has postponed the development of the Airbus A380-900 and Airbus A380F, meaning Airbus solely relies on the Airbus A380-800 for the A380 program.

In one of my previous articles I already noted that the 777 concept is favorable over the 747 concept, meaning that I don't expect the Boeing 747-8I to be able to actively compete with the Airbus A380.

The airplane that would be able to compete with the Airbus A380 is the Boeing 777-9X, an airplane that does have the new engine technology that the Airbus A380 is missing.

The table below shows how the Airbus A380 performs relative to the 777-9X:


Boeing 777-9X

Airbus A380


Passengers [-]




LD3 Containers [-]




Range [km]




Wing Area [m2]




Span [m]




Aspect ratio [-]




Fuel [L]




L/100 passengers/km *




Click to enlarge

* Cannot be seen as fuel burn numbers and should not be interpreted as such

Looking at the main characteristics one can see that the Boeing 777-9X can generate more revenue, due to its ability to carry more LD3 containers and having more LD3 available for storing cargo after loading in luggage.

The Airbus A380 has a wing with a rather low aspect-ratio, resulting in a higher lift-induced drag. However the friction and form drag of the A380 make up for this quite a bit.

Numerical values for the range and fuel capacity for the 777-9X are not yet known, but looking at the fuel burn per seat for the Boeing 777-300ER it can be assumed the Boeing 777X will perform much better than the Airbus A380.

No exact fuel efficiency numbers can be derived from the table above, but the following numbers should give an indication of the fuel efficiency on the Airbus A380:


Airbus A380

Boeing 747-8I

Boeing 777-300ER

Boeing 777-9X

Fuel efficiency [L/ passenger /100 km]





Difference [-]





Click to enlarge

* Data used from Emirates

** Date obtained from direct contact with Boeing

*** Data obtained from performance sheet for the Boeing 777

**** Estimation based on the improved fuel efficiency of the 777X

It should be taken into account that fuel efficiencies also depend on the mission profile (range of the flight and number of passengers). The fuel burn for the Airbus A380 might differ per operator, since there are various seating configurations. Lufthansa uses their super jumbos in seating configurations that yield comparable fuel efficiencies for the A380 and 747-8I.

Comparing the fuel efficiencies, it can be seen that the Airbus A380 performs 8% worse relative to the Boeing 777-300ER. Official numbers for the Boeing 747-8I show that it consumes almost 10% less fuel per 100 passengers-kilometer than the A380. The 777-9X consumes even 19% less.

The new engine technology returns higher fuel efficiencies, giving new airplanes, such as the 777X, a major advantage over the A380. With the 777-9X being more efficient and being able to generate more revenue (by transporting cargo), the A380 concept is being challenged.

Low orders

Next to being less fuel efficient, the order inflow for the Airbus A380 is small. The A380 program solely depends on the A380-800 at the moment, since the stretched A380 and the A380F have been postponed and there seems to be no use in offering those versions of the A380 before the A380 has been brought to today's standards.

Year-to-date Airbus booked 14 orders from Amedo, firming up an earlier commitment.

Airbus has a total of 318 orders and 180 orders in backlog for the A380, while having delivered 138 A380s. Emirates, with 140 orders, is the biggest customer of the A380. This puts Emirates in the position to acquire high discounts (less profit for Airbus on the A380) and demand better fuel efficiency on the A380s.

Since 2013 Lufthansa and Kingfisher (financial problems) have canceled their orders for the A380. Airbus canceled the order from Skymark Airlines due to payment concerns. Deliveries were reduced from 30 to 25 per year. The lower production rate was not seen as a long term cut back, but with low order inflow Airbus might be forced to permanently lower the production rate for the Airbus A380. This would result in Airbus not meeting their break-even point.

The fact that Boeing also reduced the production rate shows that the market for Very Large Aircraft (VLAs) is small and slow.

Market forecast Airbus

Airbus expects demand for 1711 VLAs for the coming 2 decades, this number seem to be high. If demand for VLAs would be as high as Airbus predicts, Airbus would have had more order in the order book for the A380 to accommodate the increasing demand for passenger transport. The break-even point of the A380 has been increased from 270 to 420 units and by now this number might be outdated and needs to be revised as well. In 2015 the production of an A380 is expected to be less than the sales price, but with the huge discounts given by aircraft manufacturers this doesn't say anything about profitability of the air frame.

Boeing stock might climb higher

BA Chart

BA data by YCharts

With low order inflow for VLAs, such as the Boeing 747-8I and Airbus A380, orders for the 777-9X might grow. Year to date Boeing lost 9.7% of its value after a year of climbing. With the 777X being ahead of its competition, Boeing stocks might fly higher again.


Having low order inflow and order numbers that are below the break-even point, it can be questioned whether the A380 program will ever be profitable. With competition from the fuel efficient 777X, orders for the A380 probably will not grow that much. This makes Airbus' prestige project a potential financial drama, if it already wasn't considered to be one.

Bringing the A380 to today's standards might be the last chance for Airbus.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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