Market
In 2006, industry analysts Philip Lawrence of the Aerospace Research Centre in Bristol and Richard Aboulafia of the consulting Teal Group in Fairfax anticipated 880 and 400 A380 sales respectively by 2025. According to Lawrence, parallel to the design of the A380, Airbus conducted the most extensive and thorough market analysis of commercial aviation ever undertaken, justifying its VLA (very large aircraft, those with more than 400 seats) plans, while according to Aboulafia, the rise of mid-size aircraft and market fragmentation reduced VLAs to niche market status, making such plans unjustified. The two analysts' market forecasts differed in the incorporation of spoke-hub and point-to-point models.
In 2007, Airbus estimated a demand for 1,283 passenger planes in the VLA category for the next 20 years if airport congestion remains at the current level. According to this estimate, demand could reach up to 1,771 VLAs if congestion increases. Most of this demand will be due to the urbanisation and rapid economic growth in Asia. The A380 will be used on relatively few routes, between the most saturated airports. Airbus also estimates a demand for 415 freighters in the category 120-tonne plus. Boeing, which offers the only competition in that class, the 747-8, estimates the demand for passenger VLAs at 590 and that for freighter VLAs at 370 for the period 2007–2026.
At one time the A380 was considered as a potential replacement for the existing Boeing VC-25 serving as Air Force One, but in January 2009 EADS declared that they were not going to bid for the contract, as assembling only three planes in the US would not make financial sense.
The break-even for the A380 was initially supposed to be reached by selling 270 units, but due to the delays and the falling exchange rate of the US dollar, it increased to 420 units. In 2010, EADS CFO Hans Peter Ring said that break-even (on the aircraft that are delivered) could be achieved by 2015, despite the delays; there should be around 200 deliveries by that time, on current projections. In 2012, Airbus clarified that in 2015, production costs to build the aircraft would be less than the sales price. As of March 2010 the average list price of an A380 was US$ 375.3 million (about €261 million or £229 million), depending on equipment installed. As of July 2012 this list price was US$ 390 million, but negotiated discounts made the actual prices much lower, and industry experts questioned whether the A380 project would ever pay for itself.
Read more about this topic: Airbus A380
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