Airbus follows Boeing with VLA production cutback

Seven months after Boeing announced it will reduce production of its 747-8 from 1.3 to 0.5 aircraft in September this year, Airbus has announced it will also be reducing production of the A380 from its current rate of 2.5 per month to 1.0 aircraft per month in 2018, underlining the current lack of demand in the VLA (very large aircraft) sector of the market.
However, in a bid to allay any concerns that Airbus may abandon the A380 altogether, company CEO, Fabrice Bregier issued a statement in which he confirmed that “the A380 is here to stay … we are maintaining, innovating and investing in the A380,” adding “With this prudent, proactive step we are establishing a new target for our industrial planning, meeting current commercial demand, but keeping all our options open to benefit from future A380 markets.”
Having delivered 193 of the aircraft to date, the company has orders for a further 319. The program broke even on a financial front in 2015 after delivery of 27 aircraft, but may now struggle to remain profitable on a recurring cost basis, particularly as a number of current orders have a high level of uncertainty attached to them. Virgin has already deferred an order for six of the aircraft a number of times, while aircraft lessor Amedeo, which has 20 A380s on order, has yet to announce any leasing agreements to airlines. Taking the opportunity to speak at the Farnborough Airshow on July 11, Craig Kreeger – Virgin Atlantic CEO – confirmed that the airline still had options on whether or not to defer on the A380 order, despite being at the airshow to sign a deal with Airbus for the A350-1000.
Looking forward, while Dubai-based carrier Emirates has orders for 142 A380s in place, the airline’s efforts to persuade Airbus to invest in a re-engined and more fuel-efficient model have met with little success; Bregier has remained adamant that where the VLA market was concerned, one single customer, despite one willing to purchase 100 of an neo version of the A380, was insufficient incentive.
Airbus had identified Japan as an ideal market for the A380, but orders have not been forthcoming, and with a number of A380 leases shortly coming to an end, these are likely be a more attractive proposition to such airlines as British Airways, with CEO of IAG Willie Walsh indicating that while they would not consider buying any new A380s, there would be a possibility of acquiring used aircraft for the Latin American operation of Iberia.