TOULOUSE, FRANCE (Bloomberg) - Aircraft-leasing firm Doric is preparing to take back five Airbus Group SE A380 superjumbos from Singapore Airlines starting next year, in a move that would be the first test of second-hand demand for the world's biggest jetliner.
While SIA hasn't officially decided to return the planes, London-based Doric and fellow owner Dr Peters Fund KG of Germany are preparing for their possible refurbishment, reserving time in paint shops and exploring the availability of hundreds of replacement seats.
"It appears possible that Singapore will not exercise its lease extension," Doric managing director Bernd Reber said in an interview. The asset manager is also working with Airbus to highlight the possible availability of the double-deckers to potential users.
SIA said in an e-mailed statement that it has yet to make a firm decision on whether to extend the leases on its first five planes.
The carrier, Southeast Asia's biggest, reports earnings after the market closes Thursday.
SIA was the initial A380 buyer and operates 19 of the jets, second only to Dubai-based Emirates, on routes including London, New York and Beijing. The first 10-year leases expire in 2017, though until now Doric and Dr Peters had said the carrier would likely exercise an option to keep the five aircraft for two further years, even though it has five more new planes due.
Mr Reber said tier-one airlines are among parties interested in the Singapore jets. British Airways parent IAG SA has said its evaluating the possibility of taking used A380s to supplement the 12 planes it has already ordered for BA, and that aircraft could even be allocated to its Iberia and Aer Lingus units.
There's no established second-hand trade in the aircraft yet because the first example was handed over only in 2007, while the market will also lack liquidity, with only 180 planes in service with a dozen operators.
Leasing superjumbos would save on the US$432.6 million list price, while rates would be "attractive" and rental periods could be shorter than the usual 10 to 12 years, Reber said.
Reconfiguring cabins would also be more straightforward for earlier A380s as first class seating is located on the main deck - rather than the upper level as on later examples - and could easily be replaced with economy berths.
Airbus has suggested that A380s retired by premium carriers might have a second life plying six-to-eight-hour routes for low-cost Asian airlines. The manufacturer is also seeking fresh sales avenues for new examples of its biggest model after order momentum slowed in recent years, something that could complicate the marketing of used aircraft.
SIA shares fell 0.3 per cent to S$11.62 as of 9:26 am in Singapore, trimming the gains this year to 3.8 per cent.