Singapore Airlines have announced that they will not renew the lease on the first batch of A380s they received.
The Airbus A380 suffered fresh turbulence this week when Singapore Airlines, the jet’s second largest customer, announced that they would not renew the lease on the first A380 aircrafts they received. Singapore’s flag carrier became the first customer of the world’s largest commercial aircraft back in 2007, when they signed a 10 year lease.
A spokesperson for Singapore Airlines stated that: “Our first 5 A380s are on 10-year leases, with options to extend. The first expires in October 2017, and we have decided not to extend it. For the other 4, decisions will be made later.”
CAPA analyst Brendan Sobie expects that Singapore Airlines will return all 5 of the old A380 jets in their aircraft fleet. Sobie stated: “Their fleet plan and strategy has always been to replace those aircraft. Early model airplanes come with limitations and Singapore Airlines never wanted to be stuck with remarketing these five airplanes.”
Recently, Malaysia Airlines decided to replace their A380s with the smaller A350 aircraft. In addition, Air France, Air Austral, India’s Kingfisher Airlines and the Russian airliner Transaero all made similar statements about replacing the A380.
Airbus invested $15 billion to develop the A380 and broke-even last year. But there are now growing fears that the aircraft manufacturer could make a loss as they have recently halved their delivery target for their double-decker jumbo jet from 27 in 2015 to just 12 in 2018.
The floundering sales figures of the A380, costing $432 million each, follows a growing trend in which global demand for jumbo jets, including Boeing’s iconic 747, is decreasing. Analysts claim that smaller airplanes like the Airbus A350 and the Boeing 787 Dreamliner are seen as more profitable because airlines can fill them easier and operate them at a lower cost.
Airbus declined to comment on Singapore Airlines’ decision, stating that they do not “discuss individual airline fleet plans.”