In 2018, low-cost carrier Air Austral rented an Airbus A380 for its Paris to Reunion island
route. The purpose of this temporary acquisition was to ferry holidaymakers
down to the tropical paradise. The A380 was provided by Portuguese wet lease company HiFly,
which was the first leasing company to have an A380 available for rent.
In the end, however, the aircraft was unfortunately struck - or struck by a boarding
ramp and subsequently had to be grounded while it awaited repairs to become airworthy again.
But Air Austral’s attempt to use the A380 in 2018 has us wondering:
Could the jet be used for low-cost operations? Let’s examine this question for today’s video!
It seems as though one airline had actually tried to put A380s into low-cost operations.
In case you didn’t know, Air Austral originally had two A380s on order
and planned them to be an all-economy configuration. Naturally, you would not
spend over $800 million on two aircraft if it was not a solid financial idea, right?.
The carrier eventually canceled, but one has to wonder what could have been.
Had Air Austral taken delivery of its A380 double-deck aircraft,
they would have outfitted the planes with 840 seats each in an all-economy configuration.
This is a much higher density when compared to the standard configuration of around
480 seats (split over economy, premium economy, business, and first classes).
This type of layout is often found in the majority of the A380s being operated today.
In terms of operation, our best two examples would be looking at airlines like Ryanair,
easyJet, and Wizzair and their marketplace dominance alongside
how Emirates operates a fleet of over a hundred large-capacity aircraft.
Many low-cost carriers operate a fleet of hundreds of planes - aircraft like the Boeing
737. These smaller narrowbodies can quickly and easily fly between many smaller destinations.
Emirates, on the other hand, flies primarily to big hubs on incredibly
long-haul routes such as London to Dubai, and Dubai to Sydney. These routes have
the demand for big passenger numbers that can be accommodated by widebody aircraft.
An A380 would only be viable if it flies route pairings that can handle the large
aircraft in terms of infrastructure and have sufficient passenger demand to fill it up.
However, many routes that the low-cost carriers fly to are smaller secondary
destinations and regional airports - routes that do not require large
capacity planes - and certainly not 500+ daily seats on an A380!
So could a low-cost a380 operation be made economical?
The overall business model of operating a low-cost A380 would be oversupplying
economy seats in order to reduce the per-passenger operation cost and beat
out competing carriers by setting lower prices than competitors can afford to operate with.
We have gone into great depth with articles on our website, analyzing if Norwegian Airlines made any
money from the duration in which the carrier operated the A380 through a lease with HiFly.
This is very telling if this concept is even possible.
Additionally, we also have mentioned that economy is usually a break-even or even a
loss for airlines with them making the most money from their more premium offerings.
While this analysis is based on the current seating capacity of an A380 of around 400–500
seats, consider the possibility that the type had an all-economy configuration of over 800 seats.
While much focus of this tought exercise could go to what an low-cost A380 interior would look like,
it’s worth thinking about the ramifications on the rest of the industry. What if a low-cost carrier
decided to run a fleet of A380s? How would that affect the commercial aviation landscape? For
this example, consider Ryanair operating a fleet of 500+ Airbus A380s instead of the Boeing 737s.
As noted by Teodor Negru, in an assumption that all of Ryanair's aircraft were to
be the A380 and the airline had the required number of flight and cabin
crew to operate these aircraft, the following two things would happen:
1. The passenger capacity per aircraft would grow from around 180 passengers to over 800,
which is over 400% increase in capacity. This would also mean that Ryanair,
with over 500 A380s, would be the type's largest operator worldwide.
2. The airports Ryanair can serve would drastically reduce. This is because there
are very few airports within Europe that can handle the enormous Airbus A380 and very few route
pairings that can sustain enough passenger numbers to make the use of the A380 economically viable.
Considering the fact that the low-cost airline would be massively constrained to the number of
airports it can operate to, and face further difficulties in filling up its aircraft with
800+ passengers for each flight, the leading probability is that the airline would fail.
Furthermore, as the industry has learned by now, the A380 has a negligible second-hand market,
thus making it hard for the airline to sell any of their aircraft as well.
Additionally, even if the airline managed to make it work, it could potentially face difficulties
in securing the right priority at airports; some airports have limited facilities, such as gates
capable of handling the A380. A prime example is Norwegian unable to land at JFK at the time
the airline preferred, due to the limited A380 gates being used by other operators of the type.
Thus, we think that a low-cost airline exclusively operating a fleet of A380s is bound to fail as
it would not be economically viable. While an argument could be made for the airline utilizing
a second type of aircraft for lower-demand routes, this is unlikely as low-cost carriers (usually)
tend to stick with a single aircraft type for operational simplicity and fleet commonality.
Just a few years ago, airlines (apart from Emirates) were questioning the need for the
A380s within their fleet for the future at the height of the COVID-19 pandemic.
While the A380 no longer has a future with airlines such as Thai Airways, Malaysian Airlines,
and China Southern, the type has made a decent come-back with carriers such as Etihad, Lufthansa,
and even Qatar Airways, despite the airlines initially removing the A380s from their fleet.
Emirates still sees the A380 as a core part of its operations and has
even been vocal about wanting Airbus to provide an update to the type.
Nevertheless, despite being popular with passengers worldwide, the airlines have
made it clear that the type will eventually be retired as the carriers receive more aircraft,
such as the Boeing 777-9, which is set to replace most of the capacity offered by the Airbus A380.
While HiFly was the first airline to operate a second-hand A380,
recent reports suggest that a new startup airline - Global Airlines, has agreed to
purchase more Airbus A380s and intends to operate these aircraft starting in the Spring of 2024.
The carrier plans to operate the double-decker on highly popular transatlantic routes including
London Heathrow to New York, and London Heathrow to Los Angeles International.
Notably, the airline plans to offer a premium experience for passengers,
and NOT a low-cost or budget offering. This plans gives us further confirmation that
a budget airline operating the A380 would NOT result in airline success.
But what do you think? Under what circumstances could a low-cost
A380 airline work? Share your thoughts by leaving a comment!
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