Air France immediately & permanently withdraws A380s; a very sensible decision
Air France has immediately and permanently retired its A380s, which had an average age of just nine years.
Yesterday, Lufthansa also confirmed the fate of its 14-strong A380s. Post-COVID-19, 50% will be permanently phased out, more than previously advised. Its remaining seven will operate exclusively from Munich.
These retirements mean that Europe’s A380 fleet will number just 20 post-COVID-19, down from 37 in early 2019.
For Air France, the end was already in sight
Air France had already begun to gradually remove its A380s and expected the end to come in 2022.
A few years ago, it had planned to retrofit them because of sub-par hard products, especially in premium classes, and the obvious competitive difficulties arising from this. Clearly, it decided that the benefits did not outweigh the €200-225 million investment.
That decision was proven correct by COVID-19, the sheer drop in demand, and the ability to rethink everything.
Given the A380’s higher fuel burn, high other expenses (landing fees, navigation charges, etc., admittedly somewhat offset by higher output), ground infrastructure needs and complexities, and, ultimately, few routes that ‘need’ the aircraft, the question becomes:
What can the A380 do that another type in an airline’s fleet cannot do better, simpler, or cheaper – or all three? Especially if an airline’s fleet already comprises similar-capacity or configured aircraft.
Air France is moving away from its extremely complex fleet…
Other factors help to explain Air France’s decision to phase out its A380s, including:
- Small standalone fleet, which does not help with costs, as with Delta’s 777s that will be withdrawn by the end of this year
- Some of its B777-300ERs have up to 469/472 seats, similar to the 516 of its A380s
- It has many incoming A350s, which are ‘officially’ to replace its A380s
- Its A380s consume 20-25% more fuel than newer, twin-engine long-haul aircraft. And with a sub-par hard product, it would clearly not generate adequately higher fares, versus newer alternatives, to offset the cost – and also the cost of an extremely complex fleet
Air France has always had an extremely complex fleet. Complexity also comes in the shape of multiple cabin configurations.
Its fleet simplicity is speeding up. Going forward, its fleet will comprise A220s/A320s/A321s for short-haul and both A330s/A350s and B777s/B787s for long-haul.
… strongly aided by no more quads
Air France’s fleet simplification process was aided by the withdrawal of its B747-400s in 2016.
It expects to formally cease operating A340-300s next year, which would mark the end of its quads – a very good decision, economically-speaking.
In reality, it is extremely unlikely that its A340-300s, which are currently parked, will return to service. They have effectively been phased out already.
Last year, Air France had 3.6 million seats by quads, down by a million since 2010.
What is interesting is that its A380 seats have broadly increased yearly, albeit very shallowly. Its 2019 growth, up 7% YOY to 2.7 million, was driven by new A380 routes: Paris CDG to both Atlanta and Dubai.
The A380 operated 11 routes last year
With over one in five of its A380 seats, New York JFK was by its number-one destination, with the A380 operating 14 of its 35-weekly Paris – New York weekly frequencies. The rest were by B777-200ERs, B777-300ERs, and B787-9s.
The dominance of the A380 was likely from both its capacity requirement and slot constraints at JFK.
An airline with sub-par hard product(s) within its fleet should logically deploy them on routes with no or little direct competition, especially if competitors also have weak products. An exception could be if it is so dominant it would make comparatively little difference in terms of competitiveness.
Despite seven direct competitors to New York, and the choice and price competition that means, Air France had multi-era cabins in the market.
This product inconsistency clearly reduced its overall competitiveness, with higher costs too.
With new aircraft coming online, and more aircraft being retrofitted together with multiple other changes, it’ll be interesting to see if Air France’s core profit margin matches KLM’s – its key intention – by 2024.