- The Airbus A380, which can carry more than 800 passengers, is the largest airliner in the world. At $445.6 million, the double-decker is also the world’s most expensive passenger jet.
- Airbus announced in February that the A380 would cease production in 2021 because of insufficient demand.
- According to American Airlines‘ vice president of planning, Vasu Raja, the A380 is too big for the airline’s route network.
- With a fleet of more than 950 aircraft, American Airlines is the world’s largest airline, but it doesn’t use massive central hubs as some other airlines do.
- Visit Business Insider’s homepage for more stories
With a capacity for more than 800 passengers, the Airbus A380 is the largest airliner in the world. At $445.6 million, the double-decker is also the world’s most expensive passenger jet.
The gargantuan jet, dubbed the superjumbo, was designed to take on Boeing’s iconic 747 and push the limits of modern engineering.
Unfortunately for Airbus, the superjumbo never developed into the game changer the company had hoped for when the massive jet was conceived more than two decades ago. This is especially the case on the financial front.
Airbus struggled for years to find airlines willing to buy the jet before finally throwing in the towel earlier this year when it announced that the A380 would cease production in 2021.
As it turns out, the A380’s greatest asset, its gargantuan size, may have made it simply too large for most airlines.
Read more: The 20 biggest airlines in the world, ranked
According to American Airlines’ vice president of planning, Vasu Raja, the Airbus A380 was even too large for the world’s biggest airline. American Airlines operates a fleet of 956 aircraft.
“The Boeing 777-300 is the biggest-size airplane that fits into our network,” Raja told Business Insider.
American’s Boeing 777-300ERs are configured with 304 seats. To put that in perspective, British Airways A380s fly with 165 more seats than that, while some Emirates A380s fly with 300 more seats.
- American Airlines
Planes like the A380 are designed to feed large numbers of passengers into a central hub where they are connected to destinations around the world. Most of the plane’s operators possess this trait. For example, Emirates has Dubai, Singapore Airlines has Changi, Qatar has Doha, and Korean Air has Incheon.
“Take British Airways for example: For them, they funnel the world into London Heathrow and send them forth,” Raja said. “They are probably the only airline where the A380 legitimately makes economic sense. They are also the largest operator of the Boeing 747 for the same reason.”
According to Raja, who is in charge of developing American’s global network strategy, the airline’s multihub strategy makes the A380 a tough sell.
“The reality is that we don’t just funnel all of our traffic into one hub,” he said. “We operate out of nine different hubs in the US, and because of that there’s no single hub where you can pool 500 people’s worth of demand every single day and go make that work.”
Raja added: “If you could do it, you’d do it on a few routes but not enough to go buy the 20 or 30 or 40 airplanes you would need in order to justify having the infrastructure of an airplane like that.”
- British Airways
And that drills down to the core of the issue.
When airlines buy planes, the investment reaches far beyond the aircraft itself.
“The first issue would be whenever we buy airplanes, especially a new airplane type, is the amount of infrastructure it takes to go and support it,” Raja said. “You need to have a dedicated pool of pilots, a pilot-training regime, fixed maintenance, a maintenance program around it, a certain amount of spare parts.”
“All of that is a huge degree of fixed cost, so want to have that scale over a number of units,” Raja added.
At the end of the day, the A380’s cost, infrastructure needs, and pressure to generate passenger demand make the plane too much of a risk for American.
“It’s hard to see a place where you’re worth it taking that kind of expense with that kind of demand, and even if the yields are all right, you can take a good market and make it negative pretty fast,” Raja said.