Eugdog From United Kingdom, joined Apr 2001, 518 posts, RR: 0 Posted (9 years 3 months 2 weeks 6 days 22 hours ago) and read 10822 times:
I believe the A380 will break even and make small profit for Airbus as they have sold 160 and only need 250 to break even. But is still a terrible mistake for Airbus to develop the A380 for the following reason
1) They conceded the far more lucrative mid market to Boeing and the 787. By devoting all their capital and talent to the A380 they are unable to launch an adequate rival to the B787. What ever Airbus do they will be 4-6 years late in competing in the mid size market which is clearly much bigger then the jumb market
2) it has greatly weakened the case for subsidy. The A380 is such a high profile aircraft in which the politicians such as Blair and Chirac have openly associated themselves with. This has awakened the debate over subsidies for Airbus. This is an issue Airbus must keep quiet about. But the boasting by Blair and Chirac about this grand project for thier own political ends has put the issue of subsidies back in the spotlight. Consequently the Americans have withdrawn from the agreement to allow subsidies for Airbus. As result it is highly unlikely that Airbus will get a full one-third subsidy for the A350/370. Had Airbus developed a less politically spectacular plane which Blair and Chirac had little interest in associating themselves with then it is likely that subsidies would not be put back in the spot light.
( I do not wish to get into an arguement about Boeing subisidies - the fact remains that Airbus is OPENLY subsidised whilst Boeing is covertly subsidised. This makes it easier for US politicians to take aim at Airbus but harder for European politicians to attack Boeing)
EMBQA From United States of America, joined Oct 2003, 9364 posts, RR: 10
Reply 3, posted (9 years 3 months 2 weeks 6 days 22 hours ago) and read 10784 times:
Quoting Eugdog (Thread starter): I believe the A380 will break even and make small profit for Airbus as they have sold 160 and only need 250 to break even
They have only sold 159... a number that remains all but unchanged since it's first flight well over 1 year ago. They also need closer to 300 to break even according to the National Geographic Special a few weeks back. That number goes up each time they have more costly delays... the third major delay of the program occured just last week. Airbus will need to land around 40 or more orders just this year to make the program viable. If they don't get them, you can bet questions will start to be asked........and if cancelations start..look out.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
. If I was a mod the next starter anti A380 thread should get 3 days off. I'm really tired of reading all this nonsense which is purely opinion about the A380. This week there has been one thread a day and its annoying.
If Airbus had sold 250 at list price by 2004 then yes, but that didn't happen. Prior to the latest (3rd) delay, Airbus needed to sell 350-400 according to independent estimates. Now that number will be substantially greater. It's still hypothetically possible that the WhaleJet could recoup its development costs, but it is far from certain. The farther in the future sales come, the more will be needed.
RichardPrice From , joined Dec 1969, posts, RR:
Reply 6, posted (9 years 3 months 2 weeks 6 days 22 hours ago) and read 10687 times:
Quoting EMBQA (Reply 3): They have only sold 159... a number that remains all but unchanged since it's first flight well over 1 year ago.
During which time 1 passenger 747 have been sold, its not exactly a booming market at the moment but Boeing certainly think its going to change and you can bet your bottom dollar that the A380 is going to be considered in practically any situation the 747-8 would be. Its not guaranteed that Airbus will reach 250 airframes, but to make 159 airframes at a time when Boeings largest offering is only making freighter sales is to be frank, astonishing.
BoomBoom From , joined Dec 1969, posts, RR:
Reply 7, posted (9 years 3 months 2 weeks 6 days 22 hours ago) and read 10673 times:
Quoting StarAC17 (Reply 4): This week there has been one thread a day and its annoying.
There's been one bombshell a day.
Airbus A380 Faces Operating Limits
New A380 Delay Announced
Eads Stock Plunges On A380 News!
Eads Shareholders Plan Lawsuit Against Managers
Eads To Forgeard : Shut Up....
Airbus, Parent Blame Each Other Over A380 Delays
These are all real news stories, not the product of someone's fertile imagination. It's certainly fair to discuss them.
Dutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 56
Reply 10, posted (9 years 3 months 2 weeks 6 days 21 hours ago) and read 10482 times:
Airbus has had its problems lately, and last week was a horrible one for Airbus - thus, threads like this are fair game and are to be expected. The simple answer is that its too soon to tell if the A380 program will be a success in the longrun....there are lots of problems now, and sales have only been mediocre to date, but the A380 is a long term project. In about five to seven years time, someone will be able to answer the original question of whether the A380 was a mistake or not.
And, to the Airbus cheerleaders who are now offended by the posts concerning the difficult situation at Airbus, remember, it was just a few short years ago that you were happily kicking Boeing when it was having its troubles. There is an old expression - be nice to others on your way up, because you will see all of them again on your way down. It is time for Airbus to get its act together.
Chiad From Norway, joined May 2006, 1307 posts, RR: 0
Reply 12, posted (9 years 3 months 2 weeks 6 days 21 hours ago) and read 10465 times:
I think the problems at Airbus come from a combination of loss of focus and not knowing one's limitation.
The A380 did have, and still has, a huge potential to become a very good product for both Airbus and its customers.
Some at A-net has suggested that Airbus should keep the current A350 specification and let go of the new A370 ... at least for now. Keep the focus on the A380 and go for 1/3 of the B787/A350 marked. I agree on this.
When the A380 finally has proven itself it might be time for the extremely important NG A320/B737 products to be developed.
I think if the A380 gets all Airbus' focus now until securely in airline service, it will be a good and successful business case.
If they split attention now to a new A370, and soon the A320NG, the disaster can be the result.
Actually, it was Chirac and former German PM Gerhard Schroeder that did most of the boasting. In fact, it was Schroeder who said at the unveiling in January, 2005, "this plane shows that 'old Europe' still works", or something to that affect.
Quoting StarAC17 (Reply 4): If I was a mod the next starter anti A380 thread should get 3 days off.
Good thing you're not. I don't think we need any more censorship on this board.
Cairo From , joined Dec 1969, posts, RR:
Reply 15, posted (9 years 3 months 2 weeks 6 days 21 hours ago) and read 10349 times:
I have no real opinion as to whether the A380 will be a long term success or not.
I've always felt that the case for the A380 right NOW was weak, although this could change in years to come.
1. No US passenger carrier wants it - that is eliminating 30-40% of the new aircraft market right there.
2. The main buyers of this aircraft are doing so in large part because of slot restrictions at LHR - take away this problem and overcrowding at maybe 2 other airports and the customer base for the A380 would rather add frequency instead of add a bigger airplane.
3. BOTH Boeing's AND Airbus's own market outlooks predict the overwhelming growth in new aircraft orders will come in mid-sized narrowbody planes - so why gamble so much on the A380?
Anyway, the A380 market could still develop strongly, although I think it is a bit premature right now.
Ruscoe From Australia, joined Aug 1999, 1722 posts, RR: 2
Reply 17, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10259 times:
As originally envisaged the 380 would have been an extraordinary aircraft.
In 1994 when Airbus unvieled their twin deck concept for the A3XX, (3 years after their Vision for the Future Concept), the craft was described as having a MTOW of 471T, a number they reiterated again the next year at the Paris Airshow. It was to seat 570 people in 3 classes and have 15% better seat costs than the 747. (This assuming Boeing did nothing with the 747 or develop another competitior).
I guess you can see the problem! It has grown to 560T for essentially the same mission. This is 90T over the original concept.
This is one of the fundamental reasons the 380 is open to competition from aircraft in a completely different class (eg 787) and from upgraded 747, and despite tweaking around the edges is a flawed concept which should never have proceeded. (And there were plenty of people who could see this from an early stage.
Ken777 From United States of America, joined Mar 2004, 8917 posts, RR: 10
Reply 18, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10249 times:
Hindsight is always 20-20.
As for the plane itself, I don't see it as an instant success, but I believe that the people actually working on the plane will provide continual improvements and it will end up a solid product that does turn a profit. These days we are looking too much at "what is it doing TODAY" and not considering it's 20-40 year life. I'm sure there would have been some interesting threads if this site was available to us when the original 747 was suffering through its birth pains.
I'm in the camp that believes that Airbus must continue to allocate resources to the 380 program, even at the expense of the timing of some other programs. EIS isn't going to be the end of the 380 development and giving it a high priority will ensure it becomes the plane it should be.
Personally I wish them all the best as I would love to fly the 380 some day.
MainMAN From United Kingdom, joined Jul 2005, 2117 posts, RR: 5
Reply 19, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10230 times:
Quoting Cairo (Reply 15): The main buyers of this aircraft are doing so in large part because of slot restrictions at LHR - take away this problem and overcrowding at maybe 2 other airports and the customer base for the A380 would rather add frequency instead of add a bigger airplane.
Well said. The 777 and 340 families would seem to have the rest of the world well-catered for, and the 787 will fill in the gaps.
The A380 is all about kudos and the limited number of routes it will fly may well be negated by competing 787 services between smaller cities. Just my opinion....not necessarily true because nobody yet knows.
Warreng24 From United States of America, joined Nov 2005, 716 posts, RR: 0
Reply 20, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10207 times:
When you speak of a subsidy for Boeing... what exactly do you speak of?
Many many many defense contracts are given to various divisions of Boeing and EADS.
If you look at Airbus itself (the commercial aircraft division) you see DIRECT many direct subsidies. It's practially:
European Governments: "Hello Mr. Airbus. Please build this plane. Here is a loan to go do it."
If you look at Boeing's commercial aircraft division, do you see DIRECT subsidies as indicated above... no. But, you don't see indirect subsidies either. Commerical aircraft operates as a seperate business unit from the rest of the company.
Ok, I agree in the case of the KC-767 you have something along the lines of a indirect subsidy:
Boeing Integrated Defense Systems (IDS) gets a contract to supply XX KC-767's to the USAF. Then, Boeing IDS awards the build contact for the airframes to Boeing Commercial Aircraft.
Yes, I agree that could be seen as a subsidy. It might actually be a subsidy. But, when was the last time the Boeing Commerical Aircraft was involved in such a huge subsidy?
1) Air Force 1 (1980's)
2) KC-135 (1950's)
3) KC-10 (1980's... was technically a different company at the time)
4) KC-767 (still up in the air, no pun intended)
I agree that the above could be seen as pork barrel spending. However, in the case of AF1. What would you think of the CEO of BMW driving around in a Mercedes?
Personally, I think the KC-767 is a potentially indirect subsidy. Boeing had a rough set of years pre-787 launch. US congress probably wanted to give a hand... and asked the Pentagon to look into KC-767's. Those KC-10's will last forever (good ol' Douglas), and the re-engining program on the KC-135's have brought new life to the aircrafts.
But the bottom line is that whenever Airbus feels the need to launch a new aircraft, governments feel the need to provide a loan. I don't think Airbus really needs the loans, but the terms are possibly too good for the accountants at Airbus to pass up.
Dougloid From , joined Dec 1969, posts, RR:
Reply 21, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10189 times:
Quoting EMBQA (Reply 3): They have only sold 159... a number that remains all but unchanged since it's first flight well over 1 year ago. They also need closer to 300 to break even according to the National Geographic Special a few weeks back. That number goes up each time they have more costly delays... the third major delay of the program occured just last week. Airbus will need to land around 40 or more orders just this year to make the program viable. If they don't get them, you can bet questions will start to be asked........and if cancelations start..look out.
When I worked for Douglas they invested about 6.5 billion USD on the MD11 and they figured that they'd have to sell 450 aircraft to start returning serious money to the stockholders. I think it was a reasonable estimate. Airbus is known to be on the hook for 12 billion USD or more for the A380 depending on who you ask. If they sold 300 of the A380 for cash on the barrelhead that would have to return 40 million per hull USD just to pay the development money let alone any carrying costs, time value of money, discounts, etc etc.
I think it unlikely that they can turn the A380 into a cash cow on 250 hulls, or even break even.
Dl757md From United States of America, joined May 2004, 1562 posts, RR: 16
Reply 22, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10122 times:
Quoting Cairo (Reply 15): 2. The main buyers of this aircraft are doing so in large part because of slot restrictions at LHR - take away this problem and overcrowding at maybe 2 other airports and the customer base for the A380 would rather add frequency instead of add a bigger airplane.
It's doubtful that we'll ever be able to "take away this problem". Rather it is a problem that will likely become more widespread as air travel increases, creating more justification for the A380.
RichardPrice From , joined Dec 1969, posts, RR:
Reply 23, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10099 times:
Quoting Warreng24 (Reply 20): If you look at Boeing's commercial aircraft division, do you see DIRECT subsidies as indicated above... no.
I hate doing subsidy discussions, but sometimes falacies have to be blown open.
State of Kansas - $200million in Bond Investment for 787 nose production paid back over 20 years at an interest rate of 5%, paid back by withholding taxes on employees.
State of Oklahoma - offered $350million in subsidies for 787 production work, including an interest free bond of $250million and a $100million research investment funded by a 4/10th of a penny increase on taxes across the board for 13 years.
Italy - $590million interest free investment for 787 production work.
Direct subsidies (if its OK to call the loans Airbus gets 'subsidies' then these fit the same standards).
The subsidy discussion is one that will never be resolved here on a.net, there are too many people with their own views and opinions that will never change so lets not do that shall we.
EMBQA From United States of America, joined Oct 2003, 9364 posts, RR: 10
Reply 24, posted (9 years 3 months 2 weeks 6 days 20 hours ago) and read 10078 times:
Quoting RichardPrice (Reply 6): During which time 1 passenger 747 have been sold, its not exactly a booming market at the moment
Are you serious...??? Airbus and Boeing had their best year last year in a LONG TIME. The key.... medium range jets...!! That is where the market place is. The airlines are already happy with the long range offerings from Boeing and Airbus...
"It's not the size of the dog in the fight, but the size of the fight in the dog"
: Yet at a time when Boeings flagship product is flagging for passenger sales, the A380 has run away with over 130 passenger airframe orders - it defin
: The Boeing 787 Dreamliner has sold remarkably well over the past twelve months, far outstripping the orders for the A350, and the A380 is stuck where
: Perhaps there will be some 748I sales announced at Farnborough? One never knows....
: This has yet to be seen. I feel Airbus is going to take a loss on this one. They haven't even gotten this thing even close to commercial service and
: If you are an accurate predictor, great, invest and get rich. As I say, I really don't claim to know what will happen, but the situation in London ce
: Oh, I'm sorry. I thought this was a forum for aviation enthusiasts. I didn't realize one had to have a Harvard MBA to post here. mariner
: Talking about subsidies and trying to figure out who gets more is impossible. It is a little like trying to figure out a politician who tells you that
: A mistake? No way! Think of all the fun we had "bashing" the WhaleJet. J/K To be fair in the six years since 2000 in which the A380 has gained about 1
: Good Evening I think any intelligent person can see that the A380 will turn a profit and make itself useful eventually, but the topis of these threads
: That's what it seems now. Way back when i'm sure most of us knew a 747 quasi replacement was coming. Certainly airbus wouldn't go into a bold new for
: Indeed, I really hate all these people who worry about whether or not these machines can make any money for their owners! After all, revenue generati
: Most prototypes usually are. If the business case for the A380 right now is weak, then Airbus should have never embarked on the project to begin with
: http://news.independent.co.uk/business/news/article1090101.ece EADS counts potential €8.1bn cost of beleaguered Airbus This includes the BAE's price
: I think the Wall Street Journal (Europe) said it better than I ever could in their recent editorial entitled, "Icarus Inc." of 16-18 June 2006: "Airbu
: Prototype? I thought they were into production. Foolish me. mariner
: I think that is hard to say if the A380 was a mistake or not. I remember that a few years back, there was a debate as to whether airlines wanted to co
: I agree. Why not give all things aviation a chance to be discussed. I don't really get around to checking all news sources, since I know I can just c
: you are right. Airbus should have forseen in 1994 that the direction to go in was composite fuselage and that bleedless technology would come on stre
: Clearly impossible...then and now. Likely this will need to be revised upward to 500 airframes ---or in that ballpark. Boeing had to revise breakeven
: One cannot perdict the future with certainty except that generally believed that there will be growth in long-distance travel demand to/from points wi
: Hello to all, Isnt it possible that some airlines will benefit more from the A380 than others? I dont think its such a black or white subject. Failure
: It's akin to local subsidies designed to protect jobs - such as the $800 million subsidy the city of Hamburg provided an Airbus production facility.
: PICKEL? The Wall Street Journal has been reading Halibut's a.net posts! Production's been delayed? Haven't you heard?[Edited 2006-06-18 04:34:09]
: Sure, it is probably a mixed blessing in disguise for European airlines who won't see a certain Middle Eastern airline inundate their base airports w
: Two business concepts make the A380 a dubious investment: Risk and Opportunity Costs! Risk to Airbus in terms of launching, engineering, marketing, su
: I think the separation issue is a non-event. This is one area where I think Airbus does have a grasp on the issue. It is one of the half-dozen or so
: Willing to bet $300 million on that? Airlines may "wait and see" before making an order (bet) on that. In total agreement. If not ego for the biggest
: Ok, 250 was an optimistic figure before they announced delays - and that they wouldn't meet production figures by nearly 50% over the first 3 years i
: "Doom Gloom oh what will Airbus do?" This has been the only phrase on Anet these past two weeks. Not that the topics aren't real, but Boeing was in a
: The fate of A380 will be decided once it enters service. If is as good as advertised, I believe it will do well. If it doesn't, it will become a very
: The 90 tonne increase in the WhaleJet's MTOW is not a problem. The problem is the increase in the OEW. Anyone recall the OEW projected in 1994? Certa
: I disagree. How many times in the history of aviation, and most other industries in the past, have very good products flopped because of poor entry i
: Yes! Good summary. The WhaleJet is a technically cool aircraft, so it appeals to A.netters, but that doesn't mean it meets the business requirements
: Here's my 2 cents. The A380 is a terrific plane - state of the art. But it's a plane that was developed for a market that has not matured yet. It's me
: The technology Airbus needed to develop for a380 will help Airbus in the future and time will tell if its a commercial success . But the popularity of
: The so called war between Boeing and Airbus is good for the aviation industry why cant people see that if one of these companies has a monopoly then w
: You working on that MBA yet? Maybe not but it will sell a hell of a lot more.
: Happily - not. My guess is that 787 will sell a few more than the 748, too. mariner
: The A380 is not a mistake. It has come before it's time though. The A380 will be at it's best with low-cost, high density carriers. It will bring them
: If the "Whalejet" was built by the Euros to win the "mine is bigger than yours" contest, can we now say that the 380 has "gone soft" ? They still have
: The Airbus guys tell me that the A380 isn't primarily aimed at European or American airlines, but at Asia. The idea is that those giant cities like Sh
: I agree. With the economy getting better in Asia, air travel is certainly going to improve. They don't have to use the A380 for long-haul flights, ma
: Airbus is playing on a new ground with A380. It is not just heavy like 777 or 747 it is superheavy. Problems are there to be solved
: Well just my casual opinion: Airbus succumbed to the "bigger is better" cruise ship crowd, 747 envy, and deep desire to be loved and stand out above t
: I too agree that the China factor could sell several single class "in county" shuttles,but I think that is still a few years away. I still remember wo