British Airways' decision to order Airbus's A380 superjumbo is probably the best news the Toulouse-based manufacturer has received in a year. The order is only for 12 planes, worth $3.6 billion at list prices, but the significance of BA's decision is far wider reaching. Indeed, it is so important that Airbus would probably have traded all the billions of dollars of orders it won at this year's Paris air show just to get BA on board.

The reason is that very few airlines are capable of undertaking the sort of due diligence that BA has done on its fleet replacement. BA has spent at least 8 months calculating revenue and passenger growth on every route it operates for years into the future. The airline's conclusion is that for routes east, particularly Hong Kong, and south, to Johannesburg for example, it needs the A380. Rising demand from emerging markets will have been persuasive, as will a limited number of landing slots at Heathrow, which makes a plane that will seat more than 500 people attractive.

BA's decision to go with the A380 will now convince other airlines operating similar services to also buy the A380 (expect orders from Cathay Pacific and South African Airways in the near future).

BA's order gives the A380 momentum again after a torrid 18 months of production delays and cancelled orders. The airline's decision is effectively a tipping point that will force other airlines to follow suit.

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