Summary
What do Air France-KLM, British Airways, China Southern, Kingfisher, Lufthansa, Qantas, Singapore Airways, Thai Airways and Virgin Atlantic Airways all have in common?
Simple. All nine airlines -- 66% of the entire airline customer backlog -- has ripped up their A380 delivery contracts and told Airbus to go think again.
And people thought the Eiffel Tower was a bad joke?
Analysis
They've all this year postponed deliveries of the most inexplicably stupid aircraft to have been deigned and built since Thunderbird 3.
Production cuts for 737s and A320s? Well, Airbus is trimming its production rate from 34 to 32/ month (they say 36 to 34 but they're arithmetically challenged in Toulouse -- all that sun, chemists' queues and bald heads).
The ramifications to the A380 project as a whole are serious because the deferral suggests SIA is finding it increasingly hard to fill its premium seats on this plane -- 60 business and 12 first class suites -- especially on the London-Singapore sector.
"SIA is seen as a bellwether in the industry and if the market leader has difficulty in maximizing yields on the A380, then other airlines that have ordered it will find the going even tougher." [emphasis added]
Indeed.
Doug McVitie consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
