Aviation Analyst: QR Announces A380 To Be Retired After 10 Years; 777X Will Be Initial Replacement

Revelation · Tue Feb 12, 2019 10:04 pm

Seems there were two threads on this, now zero?

Let's try again.

https://aviationanalyst.co.uk/2019/02/1 ... f-carrier/ says:

In an exclusive sit-down interview with Qatar Airways CEO Mr Al Baker in Doha, the State of Qatar, Al Baker told Aviation Analyst that the airline is planning to retire its A380 jets over the coming years. “For the A380s, on the 10th anniversary, we will retire them,” said Al Baker. Qatar Airways first took delivery of their first A380 ‘A7-APA’ in September 2014, and has 10 superjumbos in its fleet, operating to destinations including London Heathrow, Guangzhou, Melbourne and Sydney. “Once we have paid our financial obligations, they will go” he added.

And:

“The 777X will replace the A380 on routes, including to Australia” Al Baker exclusively revealed to Aviation Analyst. Qatar Airways is the launch customer of the aircraft, but crucially, not the launch operator. “We will let a couple of airlines take it and clear all of the bugs from it first. It means we will be one of the launch operators, but not the launch operator” Al Baker clarified — ending a long period of confusion (inside the aviation industry) over whether or not the Doha-based carrier will be the first to fly Boeing’s new flagship.

It also says once A350-1000 XWB increases its MTOW it will also used to replace A380s on routes needing "lesser capacity".

I guess time waits for no airplane...

Sooner787 · Tue Feb 12, 2019 10:07 pm

I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

eamondzhang · Tue Feb 12, 2019 10:18 pm

Maybe, but with his credibility I wouldn't be surprised if they changed their mind again in a couple years' time..

Michael

AsiaTravel · Tue Feb 12, 2019 10:27 pm

Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

They would need twice the number of 777x for this to be true. The 777 will have to be retired too.

incitatus · Tue Feb 12, 2019 10:32 pm

AsiaTravel wrote:
Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

They would need twice the number of 777x for this to be true. The 777 will have to be retired too.

Not quite. The right ratio would be about 3 777X for every 2 A380.

jfk777 · Tue Feb 12, 2019 10:34 pm

Will this be the first of many announcements to retire A380 at age 10. Sad to see such a majestic plane take early retirement. Qantas looks like they will fly their A380 fleet longer til 15 or 20 years, BA probably will fly theirs on the longer side too since they need to capacity and are slot restricted. What will Singapore do ?

Singapore has 19 A380 with 5 brand new and 14 older ones, they will operate a large A380 fleet for a while until it doesn't make sense for them. SIA is closely associated with the A380 and its "Suite Class" would not be the same on a 777-9. I think they will fly the whale jet until it is not justifiable financially.

FlightLevel360 · Tue Feb 12, 2019 10:49 pm

This is the reason why ETOPS should never have been invented in the first place.

TTailedTiger · Tue Feb 12, 2019 10:50 pm

Some of you are assuming that QR wants to keep capacity the same. They may very well want to cut capacity.

Prost · Tue Feb 12, 2019 11:00 pm

The hits keep on coming for the A380. 10 years amortization on an A380 seems shorter than most carriers have, is this a Qatar accounting rule?

marcogr12 · Tue Feb 12, 2019 11:04 pm

Ten yrs is just...criminally young! Where will the A380s go? Scrap so early,i can hardly believe it

Airlinerdude · Tue Feb 12, 2019 11:07 pm

This might also be an easy negotiating tactic with lessors to negotiate down future lease prices of the aircraft.

Look at the AF example, originally 5 were 'supposed' to leave, now that number is down to 3.

Remember, it's all down to economics.

AsiaTravel · Tue Feb 12, 2019 11:14 pm

incitatus wrote:
AsiaTravel wrote:
Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

They would need twice the number of 777x for this to be true. The 777 will have to be retired too.

Not quite. The right ratio would be about 3 777X for every 2 A380.

I meant to say that they will also need to replace the 777s soon. So they clearly need way more order if the goal was to replace the A380s by the 7X.

Prost · Tue Feb 12, 2019 11:19 pm

I wonder what size QR plans to settle at? Larger than they are now, the same, or smaller?

Erebus · Tue Feb 12, 2019 11:21 pm

Revelation wrote:
It also says once A350-1000 XWB increases its MTOW it will also used to replace A380s on routes needing "lesser capacity".

The demise of the A340 saw Airbus throw its weight behind the A330 line and make a successful run of it, even if it couldn't completely fill the space. Likewise, I suppose the end of the A380 could mean Airbus putting together A350-1000 improvements to try and fill in as much of the void as possible.

WayexTDI · Wed Feb 13, 2019 12:40 am

FlightLevel360 wrote:
This is the reason why ETOPS should never have been invented in the first place.

Can you lay that non-sense to rest? It's at least the 2nd thread in which you're spilling that with no justification whatsoever...

speedbird52 · Wed Feb 13, 2019 12:50 am

Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

Emirates routinely flies A380s full, and they routinely ask for an A380 NEO. You are forgetting the 161 777s Emirates currently operates, particularly the aging ones from the 2000s. I definitely see many A380s leaving the fleet, but that will be a while.

aviationaware · Wed Feb 13, 2019 12:52 am

Prost wrote:
The hits keep on coming for the A380. 10 years amortization on an A380 seems shorter than most carriers have, is this a Qatar accounting rule?

QR does not have to comply with any accounting rules:
- They are a privately held business and as such not required to publish audited financials in Qatar; and
- They are owned by the regulator, so even if they were required to publish and didn't comply with certain accounting standards, what would the auditor be able to do? Nothing.

Consequently, QR has announced that they will not be applying the new IFRS 16 Leases standards that all other airlines will have to start applying for years ending from 31 December 2019.

Any financials QR publishes aren't worth the paper they are printed on. They cannot be relied on and cannot be compared to another airline's numbers. They are designed to hide the massive subsidies QR receives from the government of Qatar.

speedbird52 wrote:
Emirates routinely flies A380s full

At increasingly eroding yields. Yield pressure will force Emirates into smaller aircraft just as it did other airlines. Many of the markets Emirates flies the A380 suffer from overcapacity and this will have to be addressed not only by the other carriers in the market but Emirates as well.

SEPilot · Wed Feb 13, 2019 1:08 am

FlightLevel360 wrote:
This is the reason why ETOPS should never have been invented in the first place.

ETOPS has enabled more efficient twins to fly intercontinental routes, and has brought fares down. Were it not for ETOPS I would certainly not be able to take my wife and daughter to the Philippines for $2000 or thereabouts, which we will do this year. So I, for one, am very grateful for ETOPS. And there have zero accidents because of ETOPS in over 30 years.

mercure1 · Wed Feb 13, 2019 1:15 am

Airlinerdude wrote:
This might also be an easy negotiating tactic with lessors to negotiate down future lease prices of the aircraft.
.

Don't believe any of the QR A380s are leased. All are owned/traditionally financed.

GalaxyFlyer · Wed Feb 13, 2019 1:42 am

Because it’s NOT surprising news—ETOPS is here, it’s proven, it ain’t going away and you won’t see another quad built for pax service.

GF

aemoreira1981 · Wed Feb 13, 2019 1:49 am

It would also make sense to second the A319LRs to QAF, and retire the A346s as well (the A346s could be useful at QAF though); the A388s are useless for QAF and QR's business model overall, which is relying on smaller twinjets and going all-in on the A350XWB and B77W/X, or reasonably-sized quads like the B748.

The B77L is going to be needed for AKL (QR921 averages about 18 hours in the air) at least until the B777-8X is ready; nothing else QR has can do the route profitably. (QR has planned for the A359 to operate it, but 18 hours would be stretching it without blocked seats). In fact, QR921 is the longest route in the world with an economy class. (Fellow Gulf flight AKL-DXB on EK449 is the 4th longest route, and longest on a 4-engined plane.)

QR has realized that it needs to rationalize its fleet around a few models: the A320/A321(and neo), the B787 (-8/-9 as regional haulers), A350XWB (for versatility), and B77W/X for higher density and ULH.

If these A388s had RR engines, I could have seen LH or BA interested, but they have Engine Alliance engines.

hongkongflyer · Wed Feb 13, 2019 2:10 am

jfk777 wrote:
Will this be the first of many announcements to retire A380 at age 10. Sad to see such a majestic plane take early retirement. Qantas looks like they will fly their A380 fleet longer til 15 or 20 years, BA probably will fly theirs on the longer side too since they need to capacity and are slot restricted. What will Singapore do ?

Singapore has 19 A380 with 5 brand new and 14 older ones, they will operate a large A380 fleet for a while until it doesn't make sense for them. SIA is closely associated with the A380 and its "Suite Class" would not be the same on a 777-9. I think they will fly the whale jet until it is not justifiable financially.

SQ won't grow their fleet. the new 5s are replacing 5 older one in the fleet

Channex757 · Wed Feb 13, 2019 2:56 am

I wouldn't take this story as gospel truth. Al Baker said similar things (actually much more negatively) about the A346 which he wanted rid of, but ended up finding a niche to operate them in. They didn't get parked.

He is the CEO but he isn't the owner after all. He has bosses and they have to agree to any big writedown of assets. Time for him to get creative...?

juliuswong · Wed Feb 13, 2019 3:24 am

Seems like A380 is having a bad start for the year.
1. Emirates's order for another 16 more came to a halt.
2. Air France is not renewing lease for 3/5? A380.
3. First A380 went to scrapper. Three more went into long term storage.
4. Qantas cancelling remaining 8 options.
5. Hong Kong Airlines cancelled their order for 10.

Future cancellation should be Amedeo's 20 and Air Accord's 3.

The silver lining is MH A380 Umrah and Hajj project finally takes off. Perhaps this is the best thing to happen before Airbus can move forward with other projects. Let's get over and done with.........

Revelation · Wed Feb 13, 2019 4:19 am

Channex757 wrote:
I wouldn't take this story as gospel truth. Al Baker said similar things (actually much more negatively) about the A346 which he wanted rid of, but ended up finding a niche to operate them in. They didn't get parked.

He is the CEO but he isn't the owner after all. He has bosses and they have to agree to any big writedown of assets. Time for him to get creative...?

We don't know if running QR's A380s down after 10 years involves a big write down of assets.

We can't say QR's handling of the A346s points to something other than a retirement under as favorable terms as could be found.

IMO I feel I can say a moderately successful 777X won't have much problem displacing under utilized A380s.

sibibom · Wed Feb 13, 2019 4:21 am

As bad as it is for A380, its the nasty wake up call and an opportunity of a fresh start for Airbus. This program has distracted them for too long, now they can focus on things that actually have a demand and need more attention.

Newark727 · Wed Feb 13, 2019 4:40 am

In a few years you're totally going to start seeing music videos filmed in desert graveyards full of mothballed A380s.

Revelation · Wed Feb 13, 2019 5:00 am

sibibom wrote:
As bad as it is for A380, its the nasty wake up call and an opportunity of a fresh start for Airbus. This program has distracted them for too long, now they can focus on things that actually have a demand and need more attention.

Really? Why now?

Hasn't it been a year or so since John Leahy told everyone that Airbus should sit back and build a decade or so of loss making A380s to position itself for the inevitable rebound?

And before that, we needed to sit back and wait for A380neo and A380plus to materialize?

And before that we needed to sit back and accept those 20 Amedeo orders as orders because Airbus accepted them as orders even though there was no actual money on the table?

There seems to be an incredible optimism bias at work, with no actual basis for such optimism.

And given Enders is leaving town after Leahy but ahead of the impact of the "bullshit castle" investigation closing, one has to wonder.

sibibom · Wed Feb 13, 2019 5:17 am

Revelation wrote:
sibibom wrote:
As bad as it is for A380, its the nasty wake up call and an opportunity of a fresh start for Airbus. This program has distracted them for too long, now they can focus on things that actually have a demand and need more attention.

Really? Why now?

Hasn't it been a year or so since John Leahy told everyone that Airbus should sit back and build a decade or so of loss making A380s to position itself for the inevitable rebound?

And before that, we needed to sit back and wait for A380neo and A380plus to materialize?

And before that we needed to sit back and accept those 20 Amedeo orders as orders because Airbus accepted them as orders even though there was no actual money on the table?

There seems to be an incredible optimism bias at work, with no actual basis for such optimism.

And given Enders is leaving town after Leahy but ahead of the impact of the "bullshit castle" investigation closing, one has to wonder.

Cos the management is having a generational shift, and they aren't as attached to A380 as the previous generation on management.

And why the double standards? All this while you fogged A380 as dead, which today beyond a doubt it is in its current form. They are finally coming to terms and doing the right thing.

5427247845 · Wed Feb 13, 2019 5:21 am

TTailedTiger wrote:
Some of you are assuming that QR wants to keep capacity the same. They may very well want to cut capacity.

And sell them cheap to BA?

JAAlbert · Wed Feb 13, 2019 6:57 am

Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

Can you just imagine, signing the purchase agreement for 150 widebody aircraft??? That's like Southwest ordering a slew of 737s!

seahawk · Wed Feb 13, 2019 8:22 am

With the open skies deal with the EU the A380 makes no sense for QR any more.

Articuno · Wed Feb 13, 2019 8:41 am

When will QR take delivery of their first 787-9?

Slash787 · Wed Feb 13, 2019 8:59 am

Articuno wrote:
When will QR take delivery of their first 787-9?

Sometime late this year

Geoff1947 · Wed Feb 13, 2019 9:02 am

Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

They ordered the 777X to replace their 77Ws.

Bricktop · Wed Feb 13, 2019 9:04 am

Let's calm down it's U-Turn Al here. Refurbish announcement coming at PAS19.

One interesting thing is that QR is not the launch customer of the B779. Well done saving yourselves lots of headaches, BCA!

Kikko19 · Wed Feb 13, 2019 9:22 am

maths guys! if it started to fly with QR in 2014 then then years would be 2024... from today is 2029 therefore is 14/15 years!

Polot · Wed Feb 13, 2019 10:10 am

Kikko19 wrote:
maths guys! if it started to fly with QR in 2014 then then years would be 2024... from today is 2029 therefore is 14/15 years!

U-turn Al is saying they will retire the A380s when the planes hit 10 years old (starting ~5 years from now), not that they are being retired 10 years from now.

juliuswong · Wed Feb 13, 2019 10:33 am

marcelh wrote:
TTailedTiger wrote:
Some of you are assuming that QR wants to keep capacity the same. They may very well want to cut capacity.

And sell them cheap to BA?

QR is operating GP7270- powered A380, BA with Trent 970, not sure if they are willing to take them up.

frigatebird · Wed Feb 13, 2019 10:40 am

Polot wrote:
Kikko19 wrote:
maths guys! if it started to fly with QR in 2014 then then years would be 2024... from today is 2029 therefore is 14/15 years!

U-turn Al is saying they will retire the A380s when the planes hit 10 years old (starting ~5 years from now), not that they are being retired 10 years from now.

QR's youngest A380 was delivered less than a year ago, so we'll see the A380 being phased out between 2024 and 2028. Interestingly, QR will phase out their 787-8s when they are 12 years old, these were delivered between 2012 and 2016, therefore also being retired between 2024-2028.

I'm sure AAB will ask his sugar daddies for some shiny new toys to replace the ones he's fed up with.

rbavfan · Wed Feb 13, 2019 10:46 am

incitatus wrote:
AsiaTravel wrote:
Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

They would need twice the number of 777x for this to be true. The 777 will have to be retired too.

Not quite. The right ratio would be about 3 777X for every 2 A380.

or A380's have more empty seats & can be replaced by only 2.

rbavfan · Wed Feb 13, 2019 10:56 am

aviationaware wrote:
Prost wrote:
The hits keep on coming for the A380. 10 years amortization on an A380 seems shorter than most carriers have, is this a Qatar accounting rule?

QR does not have to comply with any accounting rules:
- They are a privately held business and as such not required to publish audited financials in Qatar; and
- They are owned by the regulator, so even if they were required to publish and didn't comply with certain accounting standards, what would the auditor be able to do? Nothing.

Consequently, QR has announced that they will not be applying the new IFRS 16 Leases standards that all other airlines will have to start applying for years ending from 31 December 2019.

Any financials QR publishes aren't worth the paper they are printed on. They cannot be relied on and cannot be compared to another airline's numbers. They are designed to hide the massive subsidies QR receives from the government of Qatar.

speedbird52 wrote:
Emirates routinely flies A380s full

At increasingly eroding yields. Yield pressure will force Emirates into smaller aircraft just as it did other airlines. Many of the markets Emirates flies the A380 suffer from overcapacity and this will have to be addressed not only by the other carriers in the market but Emirates as well.

IFRS 16 Leases standards would not be much of an issue with airlines as it covers 12 month or less leases. not many airlines do many leases for that short of time.

aviationaware · Wed Feb 13, 2019 10:59 am

rbavfan wrote:

IFRS 16 Leases standards would not be much of an issue with airlines as it covers 12 month or less leases. not many airlines do many leases for that short of time.

You probably don't know what you're talking about. Here's some education.

https://www.pwc.com/gx/en/audit-service ... dustry.pdf

BlueSky1976 · Wed Feb 13, 2019 11:43 am

This is simply another proof that the market never needed any aircraft with capacity higher than 350 - 400 seats in the first place.

I was saying that in early 2000s here right around the launch of this monstrocity. Still being right after these years is a wonderful feeling.

PlanesNTrains · Wed Feb 13, 2019 2:45 pm

BlueSky1976 wrote:
I was saying that in early 2000s here right around the launch of this monstrocity. Still being right after these years is a wonderful feeling.

“Do we have anymore of the ‘I called the failure of the A380 way back in the beginning’ medals left? We’re gonna need another one over here.”

WayexTDI · Wed Feb 13, 2019 2:52 pm

PlanesNTrains wrote:
BlueSky1976 wrote:
I was saying that in early 2000s here right around the launch of this monstrocity. Still being right after these years is a wonderful feeling.

“Do we have anymore of the ‘I called the failure of the A380 way back in the beginning’ medals left? We’re gonna need another one over here.”

See, that's what I love with people making "predictions" (including actual professionals). Because, either way it goes, they'll be right:
- if they predicted correctly, you'll get a "see, I told you what would happen; and what did actually happen, just what I said would happen, you should have listened to me";
- or, if they predicted wrong, you'll get a "but you know, no body could foresee the change in world economics, bla bla bla; no prediction is 100% accurate".

Basically: you can't argue with them.

ODwyerPW · Wed Feb 13, 2019 4:36 pm

PlanesNTrains wrote:
BlueSky1976 wrote:
I was saying that in early 2000s here right around the launch of this monstrocity. Still being right after these years is a wonderful feeling.

“Do we have anymore of the ‘I called the failure of the A380 way back in the beginning’ medals left? We’re gonna need another one over here.”

Dave,

I just shot my morning coffee out of my nose! Thank you for the moment of levity! Love it!

PW100 · Wed Feb 13, 2019 7:01 pm

Sooner787 wrote:
I don't think it's an accident EK ordered 150 777x's and has about that many
380's to replace as their leases expire.

You don't think their 150+ 77Ws may have anything to do with that, and that that is not "an accident" . . .? ?

acjbbj · Wed Feb 13, 2019 7:39 pm

FlightLevel360 wrote:
This is the reason why ETOPS should never have been invented in the first place.

Oh please! ETOPS is here, it won't go away for quite a while, and you just have to live with it. The only hope for classic jets is cargo airlines, et cetera flying the ones already built.

smartplane · Wed Feb 13, 2019 7:54 pm

Unless QR change their new passenger aircraft depreciation period specifically for the A380, they use a 12 year term to a a residual of 7%, so another 10 years of operation from today, based on the delivery profile of the fleet, notionally all will be ready to go at residual or less.

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