It’s brutal. Back in 2007, Singapore Airlines chose to not buy but lease five Airbus A380s. The operating leases ran for ten years and last year SQ handed two back to the German lessor, Dr. Peters. Dr. Peters (no, not a rich medic) has shipping and real estate interests but nine of its 19 aircraft are A380-800s. Unable to place the aircraft with another airline, the Trent 900 engines were uninstalled and returned to Rolls Royce and later this month, fund holders are expected to endorse paying for the aircraft, currently residing in the French Pyrenees, to be dismantled and sold for parts. So an engineering marvel with a list price of $250 million originally and $445 million now, and with an expected economic life of perhaps twenty years, might now fetch $80 million and last only half that time.
Some time back, I sat on the board of Singapore Aircraft Leasing Enterprise, then Asia’s only aircraft lessor which became the much enlarged Bank of China Aviation. Management was intensely focussed on residual values which were driven by the ability to quickly place returned aircraft to sometimes less creditworthy airlines so the market for each airframe and engine combination needed to be a liquid one.
But the market for A380s is not so much illiquid as non-existent. Airbus has delivered only 226 aircraft; sales stopped in 2015 until January this year when Emirates, which operates as many A380s as the rest of the World put together, committed to buy 20 new aircraft (plus options on a further 16) having received certain assurances from Airbus as to future support. Instead, twin-engine wide-bodies which are more fuel efficient such as Boeing’s B787 Dreamliner have proved more popular.
President John F Kennedy’s gifts to linguistics are disputed. He may or may not have referred to himself as a doughnut (Ich bin ein Berliner); and he was inaccurate in saying that the Chinese ideogram for crisis 
was made up from the characters for danger and opportunity. Be that as it may, amongst the danger here there may be an opportunity. I wonder whether SQ offered to buy back the aircraft for, say, $90 million …
