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Flagship Airbus A380 superjumbo may be on its way out

EUROPEAN planemaker Airbus has announced a drastic cut in production of its A380 superjumbo, acknowledging that demand has fallen far short of original projections.

The build rate for the double-decker, less than a decade in commercial operation, will be slashed by more than half to one plane a month by 2018, Airbus revealed at the Farnborough Air Show southwest of London.

The news came after the aircraft manufacturer pulled in several massive orders for its popular A320-type single-aisle jet at the same event.

Having once predicted airlines would buy 1,200 supersize-planes over two decades, Airbus has settled into a far more modest reality and delivered only 193 A380s with 126 orders left to fill, some of them unlikely ever to materialise, according to Bloomberg.

Even with Airbus seeking to reduce programme costs to allow the A380 to remain viable at lower production levels, the severity of the planned rate cut - which Airbus says will put future output in line with the current order intake - suggests the programme is on the brink of a terminal decline.

While a break-even rate of 27 deliveries achieved in 2015 should be cut to 20 by 2017, that's still eight more than Airbus is counting on in subsequent years, putting the plane in a perilous position regardless of jetliner unit chief Fabrice Bregier's declaration that "the A380 is here to stay."

"It won't recover from this," said Richard Aboulafia, an aviation consultant at Teal Group in Fairfax, Virginia. "The new rate is seriously uneconomic; therefore it will die in a few years."

The A380 is by far Airbus' most expensive aircraft, commanding a list price of US$432.6 million, though customers typically get steep discounts. There are so far no second-hand A380s in the market, making the plane's resale value hard to gauge.

New orders are few with the A380 escaping an order blank for 2015 only when a deal for three planes announced by Japan's All Nippon Airways earlier this year was backdated.

Iran's outline deal for 12 A380s, revealed in January, lifted the gloom briefly, before the government in Tehran said it may not translate into orders for five years, and only then if the country decides it really needs the planes.

With no hint of further contracts and the A380 wowing crowds rather than fleet managers at this week's Farnborough show south of London, 2016 "looks particularly grim," said Hans Weber, president of San Diego-based consultancy Tecop International Inc., adding that he, too, views the rate cut as "the beginning of the end."