Former Singapore A380s to be sold for parts a decade after entering service

06 June, 2018

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Steve Creedy

Steve Creedy

06 June, 2018

German leasing company Dr Peters has confirmed that two former Singapore Airlines Airbus A380s are to be broken up and their components sold after it was unable to find suitable new lessees. The news comes just over a decade after the aircraft entered service and as sales of new A380s have flagged. The decision highlights the lack of a secondary market for the superjumbos as the industry turns to new, more efficient twin-engine aircraft. READ: A380 faces uncertainty as it marks 10 years in service. Dr Peters said the decision came after intensive negotiations with airlines such as British Airways, Iran Air and Hi-Fly did not result in lease agreements that would satisfy investors’ requirements. "The market for the A380-800 aircraft type has not developed positively in recent years,’’ Dr Peters chief executive Anselm Gehling said. “Some airlines have canceled orders from Airbus, while others have opted for smaller long-haul jets. “Finally, the ongoing negative discussion about the A380-800 has not led airlines to increasingly rely on this type of aircraft.” “In light of this development, the concept that has now been finalized is an excellent achievement with a total revenue forecast of around $US80 million per aircraft". Singapore handed back the A380s when the leases expired and replaced them with new aircraft. Dr Peters is working with VAS Aero Services on the sale of the components and expects to generate $US45 million from the sale of components alone over the next two years. It said VAS had assessed that many airlines currently using the A380-800 would have a high demand for individual replacement components due to upcoming maintenance intervals. It also plans to continue an existing leasing agreement with manufacturer Rolls-Royce or an airline which is estimated to generate at least $US480,000 a month during the period of high maintenance demand. However, it expects the engines will be sold in 2020. Main components such as landing gear are tipped to sell quickly and Dr Peters expects to make a first payment to investors in the first quarter of 2019 as it heads towards an overall return of the relevant investment funds of 145 to 155 percent. The A380 was thrown a lifeline when the world’s biggest operator of the plane, Emirates, signed a deal for up to 36 aircraft to be delivered from 2020. READ: A380 receives a lifeline with $US16 billion Emirates deal. The deal for 20 firm orders and 16 options was valued at $US16 million at list prices and allowed Airbus to continue production. The new order brought Emirates’ commitment to the A380 program to 178 aircraft worth more than $US60 billion. New Airbus chief salesman Eric Schulz told reporters at the sidelines of this year’s  IATA annual meeting there were still market opportunities for the A380 with existing and new operators. He said the Emirates order had ensured the aircraft was industrially viable and could remain in production. He also argued the concept of being able to better service saturated airports had been proven by the aircraft’s popularity at London Heathrow, where 10 percent of flights were on A380s. However, he conceded there were not as many slot-constrained airports as had been predicted a decade ago One explanation for this was that the growth in twin-engine aircraft, including smaller twins such as the A321LR, had taken the market outside bigger airports. “But I still believe that the 380 has its own future and, again, we are talking to airlines that are really interested to add more airplanes,’’ he said. Asked about whether Airbus was talking to Emirates about a stretch version of the plane, Schulz said the company continued to talk to each of its customers about opportunities for improvements,  

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