Singapore Airlines Ltd. announced on Wednesday that it will not extend the lease for first Airbus A380 Jet which expires in October, 2017. This announcement is another signal for Airbus, which was having a hard time in finding customers.
“Our first five A380s are on 10-year leases, with options to extend. The first expires in October 2017, and we have decided not to extend it.” said a spokesman of Singapore Airlines. “For the other four, decisions will be made later.”
Airbus said it doesn’t talk about individual airline fleet plans, and will not comment on the decision of Singapore Airlines.
Airlines now prefer smaller planes like Boeing 787 Dreamliner and Airbus 350 instead of bigger ones like Airbus 380, because smaller ones could fly nonstop to their destinations and bypass major airports like Singapore’s Changi Airport. In addition, Smaller planes are easier to fill and much cheaper to operate, which make them more profitable. During the years of few orders, the backlog of Airbus 380 has eroded. In July 2016, Airbus said that it reduced the production of Airbus 380 to twelve per year in 2018, which decreased 15 planes from last year.
Singapore Airlines was not the first one to drop Airbus 380 jets. Malaysia Airlines also decided to change Airbus 380 to Airbus 350 jets, according to Peter Bellew, the chief of Malaysia Airlines. In addition, Air France-KLM SA canceled plans for the two Airbus 380 jets this year. Some airlines also ordered A380s but haven’t introduce them into services, for example, Virgin Atlantic Airways ordered six A380 jets, but not place them into services.
“We are confident in the market for secondhand A380s, which can be leased or acquired at attractive rates. This will offer a great opportunity for new entrants with new business models to start operating the A380,” a spokesman of Airbus said in the email.