Airbus has hiked its break-even projections for the gigantic A380, recently hailed as proof of Europe's technological superiority over the U.S.A. by the usual gang of suspects.

The A380 programme has been beset by huge cost over-runs and long delays.

The firm's parent company EADS now says it needs to sell 420 A380s to break even, up from a previous estimate of 270 aircraft.

To date, Airbus has sold 159 A380s and the first plane is now due in October 2007 - two years behind schedule.

Talk of A380 sales is a little complicated to sort through--Airbus generally quotes "options" as orders, although strictly-speaking, they are not. Then there are memos of understanding, one of which Airbus signed with South Korea (but which may simply be leverage for dealing with traditional supplier Boeing...).

As near as I can tell, Airbus hasn't sold any airplanes in a year.

BAE is selling its 20% stake. Massive layoffs have been promised.

So much for European technological triumphalism.

In fact, unless France and Germany are willing to sink massive amounts of new money into Airbus, there doesn't seem to be anyway for the company to survive.

The A380 was a colossal mistake, even without its technical problems and delays. We've been seeing "route fragmentation" since the early 1990s, well before the A380 was even in its early stages of design, with demonstrable trends towards more frequent flights and smaller numbers of seats per plane.

The best statistical illustration of this is the declining average size on most international routes. Between 1990 and 2001, transatlantic routes exhibited the greatest decline, from an average of 279 seats to 232 seats per flight. Latin American flight size shrank from 194 seats to 168 seats.

The most intriguing fragmentation took place in the Pacific. There, routes shrank from 319 to 304 seats. Yet the Pacific market has only recently seen the introduction of long-range equipment that can come close to the 747’s range with a smaller seat capacity. The Japanese majors, United Airlines, and other carriers have recently had considerable success by replacing 747s with smaller planes, such as the 777 and A340. This implies that fragmentation in the Pacific has only just begun, and could start to emulate the Atlantic market, especially as the new very long-range A340-500 and 777-200LR come on line. And as Airbus is keen to point out, Asia is expected to provide the bulk of the A380’s business case.

Ironically, what really sinks the hopes of the A380 is what's been happening to the Boeing 747. What John Travolta didn't tell you when he bought his 747 is how cheap he got it. We're talking 5 year-old Hyundai market values here. Even more alarming is that an increasing number of these jets have simply been parked. 747s used to be 30% of the fleet. Now they are 10%. If the existing fleet of widebody jets are languishing in storage, then where precisely is this market for the A380?

Market trends have long been for more direct flights with fewer passengers, all which screams "Dreamliner" and not A (for albatross?) 380.

Unfortunately, the size of EADS commitment to A380 means it went all-in on a very bad hand, which leaves it nothing to advance to developing a competitive aircraft in the 787 class.

Such a massive strategic mistake generally results in the sale of the company, but as an icon of European technological supremacy, there is always the possibility that France and Germany will extract new funds from long-suffering taxpayers to save their political hides.

If I were to guess, they'll do whatever is necessary to perserve the jobs and political reputations involved--after all we have precedent:

The last icon of European technological supremacy--the Concorde.