Why British Airways Turned Down More A380s

Rumors of a British Airways A380 acquisition never materialized. But it was not for lack of effort. Now we know why.

In February, I wrote about British Airways’ willingness to purchase more A380s to save the program. At the time, IAG Group CEO Willie Walsh stated:

I’ve been very clear with Airbus that if they want to sell the aircraft, they’re going to have to be very aggressive on the price.

I’ve no concerns about the A380… it’s been an excellent aircraft for us. We have made it clear to Airbus that we might consider some additional aircraft. But the pricing of that aircraft has not been as attractive as we believe it needs to be.

But we all know what happened. BA passed on the A380, bought 777Xs, and Airbus announced the production line would shut down.

Now we have a bit more insight on why British Airways passed. During a lecture at the Royal Aeronautical Society, BA CEO Alex Cruz addressed the A380 pitch:

The proposition that Airbus put forth simply did not even come close to comparison with the [Boeing offer]. And that was a combination, as rumored in the press, of new aircraft and used aircraft, et cetera.

It’s one thing to acquire an aircraft. It’s quite another to refurbish it. That’s proved to be the hurdle that could not be cleared. Cruz added:

Imagine that we find a suitable used, relatively new A380 whose owners don’t want any more – think Malaysian, think Emirates, think Lufthansa. Imagine they give it to us at a really reasonable price. Everything breaks down the moment you start thinking about the inside of the aircraft.

Specifically, each aircraft cost $30-50 million to retrofit. That’s why Air France is retiring half of its A380s and that is why leasing was out of the question.

Thus, it wasn’t about fuel efficiency and size, it was about cost.