Air France to book $550 million writedown on A380 phase-out plan

Air France-KLM will book a 500 million-euro ($550-million) writedown from the early phasing-out of its Airbus SE A380 double-decker planes that are no longer useful with the coronavirus eating into travel.

The Franco-Dutch carrier will switch to newer Airbus 350s and Boeing Co. 787s, it said in a statement on Wednesday. It plans to record the expense in the second quarter.

With planes grounded and air-travel almost at a standstill, the coronavirus pandemic is accelerating the demise of the world’s largest commercial jetliner. Airbus had already opted to discontinue the A380 program as carriers looked to simplify fleets and upgrade fuel efficiency. Rolls-Royce Holdings Plc Chief Executive Officer Warren East said on Wednesday that a full recovery of the aerospace market to 2019 levels could take as many as five years.

Air France said a move to make its fleet more competitive also prompted the phase out, originally scheduled for the end of 2022. Five of the A380s in the fleet are owned by Air France or on finance lease, with a further four on an operating lease.

The plane’s early retirement comes a decade after Air France first started operations with the plane, and marks a symbolic blow because the giant model is assembled in France. Components like wings and fuselage sections are flown in or brought by barge and then wind their way down to Toulouse, where they are pieced together.