How Will The A380’s Swan Song Play Out For MRO?
The fate of the much-vaunted Airbus A380 superjumbo, seen by some as the future of widebody air travel when it went into service just 14 years ago, was effectively sealed long before COVID-19 entered the public consciousness. Its manufacturer announced the cessation of production in early 2019 after Emirates, the model’s largest operator, canceled an order for 39 of the aircraft. Reflecting the appetite of the wider industry for smaller, more fuel-efficient aircraft, the Dubai-based airline replaced its booked A380s with commitments for newer Airbus A330-900s and A350-900s.
However, despite much of the A380 fleet being still relatively young in comparison to other widebody programs, its swan song into the 2020s in the fleets of several operators looks likely to become even shorter because of the novel coronavirus pandemic. The crisis has given some cash-starved airlines extra motivation to retire their most expensive assets. No fewer than nine carriers have either accelerated their A380 retirement plans or phased out the aircraft entirely over the past 18 months.
Some of these phaseouts occurred immediately: Air France offloaded its nine remaining A380s in June 2020. Other operators, including Thai Airways and Malaysia Airlines, moved their exit strategies forward, while Qatar Airways has outlined plans to halve the size of its A380 fleet. Lufthansa has said its remaining A380s will likely never return to service, while the CEO of Etihad Airways says he does not see the superjumbo as commercially viable in the long term.
Questions now turn to what sort of long-term aftermarket will be left for the A380. Aviation Week’s Fleet & MRO Forecast projects its aftermarket value will be $17.3 billion over the next 10 years but will travel in a downward trajectory, with a -3.9% compound annual growth rate from 2021 to 2030.
With more retirements anticipated, a lot of future maintenance work will center on even fewer airlines. Most future A380 MRO will come from Emirates, which will still operates more than 100 of the aircraft for the foreseeable future. The Middle East region, including other regional A380 operators Qatar Airways and Etihad, has the largest projected level of A380 MRO spending of any region, at $12.4 billion over 10 years—dwarfing the $2.9 billion generated from the Asia-Pacific region. That region will see A380 MRO spending generated by carriers like Qantas, which plans to start reactivating its A380 fleet, in storage since last year. Five will return to service by mid-2022, one year earlier than first anticipated.
British Airways, one of the A380 holdouts that this year reaffirmed its commitment to the aircraft, is updating its MRO plans. In August 2021, it signed new terms with Lufthansa Technik to oversee heavy maintenance on its A380 fleet, which numbers 12 aircraft, extending the existing MRO agreement through to 2027. The carrier plans to bring the aircraft back into service in the final quarter of 2021.
The drop in line maintenance services was perhaps the biggest hit in the wake of the crisis. However, this is likely to pick up as more A380s, along with other widebody aircraft, ready for their return to service over the next one to two years. Prior to the COVID-19 crisis, Mandeep Rana, head of sales at Netherlands-based specialist Direct Maintenance, says the market for line maintenance services on the aircraft was vibrant. “The A380 market for Direct Maintenance was stable but still growing incrementally for stations and customer-wise,” he says. “Typical work performed were the transit checks defect rectification, recurring checks, and smaller work packs upon request of the operator.”
But during the crisis, this work has been almost nonexistent, barring a few flights. “At the start of the pandemic, there were still some A380 flights to and from Direct Maintenance stations, but these were either the last scheduled A380 flights, repatriation flights, special charter services or one-off events. Other than those, we have not performed any line maintenance activities on the A380 during the pandemic,” he says. Rana expects an uptick in line maintenance starting in September, when operators have scheduled the return of their A380s to its line stations.