Antiquated yield management systems are serving as an impediment to securing commitments for higher-density Airbus A380s, suggests Mark Lapidus, CEO of Amedeo. Even so, the executive is confident Airbus will complete development of an 11-abreast A380 in late 2016, when the leasing company is scheduled to start taking delivery of a 20-strong order inked at the Singapore Air Show.
Lapidus made a splash at this year’s ISTAT conference in San Diego when he revealed that Airbus intends to raise the floor of the A380 in order to offer an 11-abreast configuration with 18-inch wide seats. He later told Flightglobal that a late 2016 completion date is feasible, and that the redesign likely won’t create a new A380 build standard. If this is the case, perhaps Airbus will simply add a false floor to raise the seats? This might be what Airbus executives were alluding to in Hamburg.
In a follow-up interview with RGN, Lapidus said airlines “maybe just are not quite up to date” on their yield management systems, which use “hard wired numbers from a generation ago”. As such, putting “a 600-plus seat aircraft on a route” isn’t necessarily a walk in the park. It takes a lot more than that development of an 11-abreast A380 “to get the airlines around the corner”, he added.
“It’s a process where they need to think through the right routes, and 11-abreast will help them if they think their yield management systems can handle the extra capacity. It’s part of the process on those key trunk routes [trying to grow] by 10% where frequency does not help either because of infrastructure constraints or departure times for higher ticket prices; it’s those routes where it makes sense.”
Emirates, which leases four A380s from Amedeo (and previously leased 18 with Lapidus’ prior company) had been considered a likely candidate to take delivery of A380s configured 11-abreast in economy. The carrier – whose current A380s are configured 10-abreast in economy – previously said it was eager for Airbus to retain an 18-inch seat width, which is driving Airbus’ floor raising work, as seats are inched up to the fatter part of the tube.
But the carrier appears to be backing away from the idea. This morning The Sydney Morning Herald reported that Emirates president Tim Clark is no longer even considering it.
The A380 serves as the flagship for several top tier carriers, including Emirates, and its seating across classes sets the standard for their fleets.
“Emirates has a completely different product on the A380 versus its 777s. The A380 is far better – with 19-inch economy width – and your own business class space. So there are two elements to product experience: physical and perception. Perception with Emirates is that you will have an A380 experience [when you fly with the carrier] and when you happen to fly a 777, I found that I did not penalize Emirates for this as I internalized it as a temporary state and that the next time I will be on an A380. Emirates could not offer this overall experience if it only had 777s and a lesser product in its overall network,” says Lapidus.
Perhaps Emirates fears that, if it adopts an 11-abreast A380, it will jeopardize passenger perception of its overall offering. After all, seat width on Emirates’ forthcoming Boeing 777-9X could be as low as 16.7-inch wide seat, claims Lapidus.
Boeing, however, disputes this assertion. According to the airframer, the interior will be 4 inches wider than the current 777-300ER, and a typical seat will be 17.2 inches to 17.7 inches in width at 10-abreast dependent on the armrest and aisles chosen.
Emirates is already poised to take delivery next year of a 619-seat A380, configured 10-abreast in economy, and “that is a very compelling package”, says Lapidus. “So not everyone has to do 11-abreast”.
With that said, the ability to offer a premium economy or economy plus section – while retaining a high density in economy – could be appealing to other A380 operators. To this end, Amedeo has tabled a proposal for a 590-seat A380 inclusive of premium economy.
As pictured, the lower deck would be configured with all economy seating (as it is today), though I must admit my immediate response to seeing this image is that it looks something akin to a slave ship. While a 590-seat A380 with true premium economy seating – configured 8-abreast – is seen here, Lapidus also believes airlines would consider offering 11-abreast in economy and 10-abreast in an economy plus section featuring “19-inch wide seats like Emirates has today and that would be a fantastic product”. Airlines could simply “break their classes in between the doors”.
He says a 19-inch wide seat with a little more legroom “is pretty good as a global standard but we’re not trying to impose our views on what those comfort standards are, and airlines can define their brand in any way they think it’s right”. Moreover, “it doesn’t necessarily mean that everyone jumps on the bandwagon of economy plus, but that seams to be a growing segment where people are making very good profit”.
The Amadeo CEO says first class is “not generating profitability for airlines, but used for spill over from business, and part of projecting the brand”. Business class tickets, for example, “are selling for say $6,000” and then you have a precipitous drop in price for economy, which leaves room for an economy plus seat.
Already a fan of the A380’s economics, Lapidus says higher density A380s will “remain the best” in terms of unit costs “when the A350-1000 and 777-9X arrive, but it [11-abreast in economy] will make it even better. The A380 doesn’t need 11-abreast to be the best against the new planes; it already is, but with 11-abreast you have flexibility of fitting out your aircraft for a multiple product offering,” says the man who is very eager to place his 20 new A380s with customers.
“The A380 has a lower unit cost at 10-abreast verusus the A350-1000, in comparable comfort configuration, in apples to apples arrangements, or per square foot of available usable space, a measure we are introducing to shed sunlight on the smog of using incomparable seat counts. And more so against 777-9X, based on Boeing statements on performance improvements of the 777-9X versus the 777-300ER. Now if we go 11-abreast, those unit cost advantages will become double digit versus comparable comfort configurations.”
Lapidus concludes, “Whatever an airline may choose in properly managing its yield and brand, we are cool with, as long as it is clear that A380 has the lowest unit costs versus the new big planes in apples to apples comparisons.”