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Who’s On First?

It is two years late, has cost Airbus hundreds of millions of dollars in penalties and cancellations, and exposed the soft underbelly of the European airplane builder’s management structure.


November 30, 2007
By David Carr

Topics

It is two years late, has cost Airbus hundreds of millions of dollars in penalties and cancellations, and exposed the soft underbelly of the European airplane builder’s management structure. But none of these setbacks mattered on Oct. 25 as the first commercial flight of the A380 touched down at Sydney’s Kingsford Smith International Airport and entered the record books.

Launch customer Singa-pore Airlines (SIA) sold tickets for the inaugural flight through a global online charity seat auction. Now the heavy lifting is under way. SIA has ordered 19 A380s and will quickly follow Sydney with service to London Heathrow and the US west coast, although concerns that LAX will not be ready to receive the double-deck behemoth before 2009 are forcing customers to look north to San Francisco. Not on the planning horizon is Vancouver International Airport, where SIA operates a three-times-weekly service.

The A380 made a stopover at YVR last November as part of its certification process – the only North American stop during a 10-city tour.

Seven of Airbus’s 15 A380 customer airlines fly into Canada including Emirates, which began service to Toronto in October, and British Airways which recently jump-started a stalled order book with a US$8.2 billion order for 12 A380s and 24 Boeing 787 Dreamliners. Montreal, Toronto and Vancouver are each equipped to handle the A380, but without a Canadian order the airplane is expected to have a marginal presence in Canada over the immediate future.

The smart money remains on Montreal’s Pierre Trudeau International Airport to become the first to welcome the A380 after Air France begins delivery of its 12 aircraft in 2009. The airline already flies up to three daily flights into Trudeau and has listed Montreal as a second North American destination after New York. Montreal’s prospects were given a boost in October when the airline announced a mid-November goodwill visit to the city.

British Airways has the strongest market share of all scheduled international airlines flying into Canada, and a presence at Toronto’s Pearson International Airport similar to Air France in Montreal. But a reading of the tea leaves left after the BA order suggests that Canada doesn’t fit into a European-based A380 operating profile.

Rather, BA intends to use the A380 on high-demand longer-haul routes such as Shanghai, Sydney and San Francisco, where capacity trumps frequency, while using the smaller 787 to increase the number of daily flights in mature North American markets such as New York and Toronto.

The wild card might be Emirates. The Dubai-based airline operates three weekly Boeing 777-300ER services to Toronto, the maximum number of flights allowed to Canada under an existing bilateral agreement with the United Arab Emirates. The government-owned airline will begin taking deliveries of 45 A380s in October 2008 and has been accused by competitors of distorting the market by expanding too quickly and flooding long-haul routes with too many seats.

Interestingly, the British Airways order, while eclipsed by Emirates, is seen by several industry analysts as the one Airbus needed to ignite a series of orders from BA competitors such as Japan Air Lines (a country where Airbus has been shut out) and Cathay Pacific, an existing Airbus customer with a significant Vancouver operation.