​A-380 demise: No major impact on Changi, stakeholders

On Valentine's Day, Airbus told the world it was ditching the biggest love of its life: the Airbus 380 superjumbo. The last giant jet will be delivered in 2021. As the plane maker mulls over what went wrong, questions are being asked about the impact of the break-up on three areas: air travel trends; airlines including SIA that continue to operate the aircraft; and airports like Changi that spent millions to accommodate the

plane.

Airbus was convinced that growing passenger traffic would put major constraints on busy airports, making the A-380 the only viable option for airlines to expand without the need to add too many flights. 

This was premised on a hub-and-spoke model; a hub being a central airport that flights are routed through and the spokes are the routes airlines operate from the hub.

What Airbus did not bargain for was airlines offering direct point-to-point flights, bypassing hub airports. 

Such routes, for example those operated by SIA to cities in Europe like Dusseldorf in Germany and Amsterdam in the Netherlands, are better served with smaller twin-aisle planes like SIA's long-haul A-350 that can carry about 250 people - roughly half the airline's A-380 capacity.

Despite lower loads, airlines are able to operate the routes viably with new technology that makes the new-age aircraft way more efficient than earlier models in a similar class. 

With the A-350 and B-787, for example, carriers are not only able to launch new flights to less busy destinations, they can also offer more frequent services, increasing flight options for travellers.

Given a choice, more travellers prefer non-stop when flying long-haul.

In an analysis of the top 10 long-haul routes from Changi Airport, industry consultancy OAG found that between December 2017 and November last year, an average of more than seven in 10 travellers flew non-stop to their destinations instead of breaking their journeys.

The study looked at flights to cities including London, Los Angeles, San Francisco, Paris and Amsterdam. 

The proportion of travellers who opted for non-stop flights was especially high on routes to London (83 per cent), Paris (76 per cent), Zurich (76 per cent) and San Francisco (75 per cent). 

OAG's regional sales director for Japan and Asia-Pacific Mayur Patel said: "There appears to be an increase in preference for direct services."

Many and even more A-380 will still continue to fly for a considerable number of years. Singapore as an important aviation hub will continue to see many of them coming here. Similarly, big, slot-constrained hubs like London Heathrow will continue to feature many A-380 flights.

Travellers are influenced by many factors including pricing, connecting times and the frequency of direct flights, he said.

For example, a business traveller who values flexibility may prefer to fly through a hub with many flight options if the direct service operates only two or three times a week.

The evolving market and travel trends, coupled with the entry of more efficient aircraft, hit A-380 sales. 

In the 12 years since the giant aircraft first took to the skies in 2007 in SIA colours, Airbus has sold just over 300 A-380s and delivered 234 of them - 19 to SIA.

When Emirates slashed its order to 123 last month, all hope was lost for Airbus to ever recover the US$25 billion (S$33.9 billion) it spent on developing the A-380. The airline has about 110 of the massive planes and had intended to grow the fleet to 162.

The changing trends, though, have given airlines far more leeway to customise their products to suit the needs of different types of travellers.

This has benefited airlines and their consumers but what about hub airports like Changi and Dubai? 

With the exception of Dubai, perhaps, where more than eight in 10 travellers who fly there are just passing through the airport to get to their final destinations, many other big hubs have a good mix of transit and destination traffic.

At Changi Airport, for example, transit traffic makes up about a third of the total haul. 

It is important for airports to have a good mix of traffic sources and types, industry analysts said, adding that while the balance may shift from time to time, there will always be a demand for both direct and one-stop flights.

Mr Mayur said: "There is clearly a very competitive market providing lots of choices for travellers and while we do see more and more direct flights from long-haul airlines (from Singapore), carriers such as Cathay Pacific, Emirates, Qatar Airways and Turkish Airlines can offer some very attractive one-stop options for travellers that are always worth considering."

Professor Guido Gianasso, academic director of the Iata-Nanyang Advanced Management Programme at Nanyang Technological University's Nanyang Business School, said: "While more travellers opting for direct services may impact Changi Airport negatively, many other different factors will support its long-term growth." 

Changi sits at the heart of Asia, where air travel will grow significantly in the coming decades and Singapore remains an attractive destination for the emerging Asian middle class, he noted. 

"I am convinced that Changi has many excellent years ahead," Prof Gianasso said.

From a technical perspective, the decision to discontinue A-380 production after 2021 raises the question of whether the millions that airports spent to make room for the superjumbo will enter the books as a huge liability.

With a wingspan of about 80m and a maximum take-off weight of 545,000kg, the double-decker jet can land only at designated airports.

There are currently more than 120 A-380 routes to 60 destinations.

To receive the aircraft, airports must have wider runways, wider taxiways and big gate-hold rooms to accommodate as many as more than 500 passengers. 

To board and disembark passengers quickly, aerobridges with enough arms are needed to serve both levels of the aircraft.

On the tarmac, the A-380 needs more parking space.

Runway signage must be shifted outwards to avoid jet blast dislodging lighted runway sign panels during take-off.

Before the A-380 could start flying to Singapore in 2007, Changi Airport had to first spend at least $60 million to prepare the necessary facilities on the ground, and at Terminals 1 and 2 (T3 opened only in 2008).

Ground-handling firms like Sats also invested in new baggage and catering equipment, among other upgrades.

Airbus' decision to cease A-380 production will not have any major infrastructure impact in the short to long term for airports like Changi.

Singapore Management University's transport specialist Assistant Professor Terence Fan said: "Many and even more A-380 will still continue to fly for a considerable number of years. Singapore as an important aviation hub will continue to see many of them coming here. Similarly, big, slot-constrained hubs like London Heathrow will continue to feature many A-380 flights."

Changi Airport now receives A-380 flights operated by five airlines - SIA, British Airways, Lufthansa, Emirates and Qantas. As at March 1, they operate a total of about 140 weekly one-way services.

Across the three main terminals, there are 19 contact gates that can accommodate the A-380, making up about 17 per cent of the total number of gates at the airport.

Changi Airport Group spokesman Ivan Tan said: "A-380 operations will still continue for a number of years and the infrastructure is still required to support flights using the aircraft." 

He added that A-380 contact gates at Changi can also be used for other wide-body aircraft such as the B-777s, B-787s and A-350s. 

Echoing a similar line, a spokesman for Sats said: "We can use the equipment we have invested to service A-380 flights, such as the direct upper deck catering vehicles, on other aircraft types."

Two Airbus A-380 aircraft sit on the ground at the Tarmac Aerosave SAS storage and recycling facility against a background of the Pyrenees mountain range in Tarbes, France, on Feb 17, 2019.

Source: The Straits Times, 4 March 2019