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Boeing To AirAsia: Sell 737 At Cost 4 Mkt Share?  
User currently offlineXkorpyoh From United States of America, joined Oct 2004, 819 posts, RR: 0
Posted (9 years 8 months 3 weeks 2 days 22 hours ago) and read 7481 times:

It is logical and understandable that Boeing wants to close a deal only when it is profitable, but considering the fact that they have been loosing traditional Boeing customers to Airbus, like AirBerlin and EasyJet, wouldn’t it make sense for them to sell at cost to AirAsia in order to keep them on the boeing side?
Considering that AirAsia is a fast growing airline in the most populous continent, it should be very important for Boeing to retain them with a boeing fleet. This will guarantee more sales in the future with AirAsia’s continuous grow. (They just started AirAsia in Indonesia with a subsidiary airline). Loosing AirBerlin to Airbus in Europe was bad enough, but they are in Germany (Airbus’s home turf). Loosing AirAsia’s big order would be catastrophic for Boeing since they are counting on Asia for support and future growth. Isn’t it time for Boeing to take a risk like airbus did with jetblue? They are being too conservative and not competitive enough, and it is showing.


74 replies: All unread, showing first 25:
 
User currently offline777ER From New Zealand, joined Dec 2003, 12110 posts, RR: 18
Reply 1, posted (9 years 8 months 3 weeks 2 days 22 hours ago) and read 7417 times:
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If Boeing wants to keep their customers then they need to become more competitive.

User currently offlineXkorpyoh From United States of America, joined Oct 2004, 819 posts, RR: 0
Reply 2, posted (9 years 8 months 3 weeks 2 days 21 hours ago) and read 7354 times:

yes, we know they need to be more competitive. Is selling those 80 737ng at cost (to closely match the airbus offer) the first step of being more competitive?

User currently offlinePVG From Hong Kong, joined Dec 2004, 724 posts, RR: 2
Reply 3, posted (9 years 8 months 3 weeks 1 day 18 hours ago) and read 7113 times:

The problem is the their competitor will sell and is selling below cost (no matter what they say) which is the real reason they keep gaining marketshare. How do you compete with a company that sells below cost and sticks its supporting governments with the bill? You can never win that game unless your own government is willing to support you in the same way.

User currently offlineN328KF From United States of America, joined May 2004, 6484 posts, RR: 3
Reply 4, posted (9 years 8 months 3 weeks 1 day 18 hours ago) and read 7095 times:

Xkorpyoh:

Boeing exists to make a profit building aircraft. Airbus exists to build aircraft as part of a jobs program.



When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4105 posts, RR: 5
Reply 5, posted (9 years 8 months 3 weeks 1 day 18 hours ago) and read 7088 times:

Honestly, they need to get rid of any subsidies on BOTH sides. BOTH sides have around 50% of the market and BOTH sides can support themselves with their own profits (at least they should be able to if they sell their planes above break even point). So why keep the subsidies? Airbus should stop getting any money from the gov't, Boeing shouldn't be able to outsource a large portion of its r & d costs overseas. If the companies want to use military profits for commercial use, I don't see a problem with that. Airbus could build up their military division, but they choose not to (the A400 is one airplane, not a division). Afterall, why is Airbus afraid to jack up the prices a bit? To me, that is like Airbus admitting their product is inferior, so in order to sell it, they have to do so at a loss. That is how I read it, if Boeing did it I'd say the same thing. Neither company should be allowed to sell their planes at a loss. Of course, when you get the US gov't AND the EU in there, all hell breaks loose...

User currently offlineCRPilot From Costa Rica, joined Nov 2004, 311 posts, RR: 0
Reply 6, posted (9 years 8 months 3 weeks 1 day 18 hours ago) and read 7066 times:

FriendlySkies,

Honestly, how many times is this issue going to keep coming up?

The question is whether or not selling at cost will improve Boeing's customer loyalty? The answers is as my meteorology teacher said..."it depends!"

Boeing makes an excellent product, said it before and I'll say it again, but companies are looking for the most for their money. As long as the A320's performance numbers and price tag stay where they're at; Boeing has no alternative but to provide incentive to buy their product beyond fuel efficiency and unit cost or match the price. Basic rule of operating a business, particularly one as sensitive as ours...cost control.




[Edited 2004-12-12 04:20:06]


Flying is a privilege!
User currently offlineN328KF From United States of America, joined May 2004, 6484 posts, RR: 3
Reply 7, posted (9 years 8 months 3 weeks 1 day 18 hours ago) and read 7052 times:

FriendlySkies

Airbus is, in essence, the civil division of the otherwise milspace-oriented EADS.



When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineCedarjet From United Kingdom, joined May 1999, 8093 posts, RR: 54
Reply 8, posted (9 years 8 months 3 weeks 1 day 17 hours ago) and read 6989 times:

PVG (and friends): where have you heard Airbus don't make (lots of) money? There are plenty of industries that government could subsidise if they wanted to create jobs. However, Airbus make money. Think how much profit they make from the jetBlue fleet, even if it was sold at cost - you sell spares to maintain a 100-strong fleet over two decades, you're going to make A LOT OF CASH. And why not - Europeans contributed just as much to the development of aviation as the USA. Just look at the beginning of the jet age: the first jetliner (Comet 1), the first jet service across the Atlantic (Comet 4), the first (and second and third) rear-engined short haul twin jet (Tu104, Caravelle, BAC111), the first rear-engined short / medium haul tri jet (Trident), the only supersonic transports (Conc, perhaps the Tu144 deserves mention as well) etc. Some people here (Americans mostly, for obvious reasons) seem to take offence at the idea of European dominance, but when you think about it, the more surprising thing is how long it's taken Europe to get it's act together.

Once again: Airbus make money. Government loans are repaid. Europeans know how to make good aeroplanes, and have done for a century now.



fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
User currently offlineBa319-131 From United Kingdom, joined Jan 2001, 8535 posts, RR: 54
Reply 9, posted (9 years 8 months 3 weeks 1 day 16 hours ago) and read 6977 times:
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Cedarjet makes a good point.

Over a planes lifespan it will need new parts etc,just like a car does,regardless of cost price, which again we have no idea about as we are not privy to this information,everyone makes money out of spare parts.



111,732,3,4,5,7,8,BBJ,741,742,743,744,752,762,763,764,772,77L,773,77W,L15,D10,30,40,AB3,AB6,A312.313,319,320,321,332,333
User currently offlineXkorpyoh From United States of America, joined Oct 2004, 819 posts, RR: 0
Reply 10, posted (9 years 8 months 3 weeks 1 day 16 hours ago) and read 6971 times:

so Cedar, you are saying that airbus sold the a320s at cost to jetblue and it is still making money with the spares and additional planes. In that case, Boeing could be doing the same with AirAsia.

User currently offlineBa319-131 From United Kingdom, joined Jan 2001, 8535 posts, RR: 54
Reply 11, posted (9 years 8 months 3 weeks 1 day 16 hours ago) and read 6957 times:
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There is also another point to make regarding production lines.

It is cheaper to produce more aircraft than fewer,the higher the production the lower each unit cost is,so with Airbus winning almost all of the latest orders in the narrowbody section,they can afford to sell them cheaper as their unit costs are lower.



111,732,3,4,5,7,8,BBJ,741,742,743,744,752,762,763,764,772,77L,773,77W,L15,D10,30,40,AB3,AB6,A312.313,319,320,321,332,333
User currently offlineCedarjet From United Kingdom, joined May 1999, 8093 posts, RR: 54
Reply 12, posted (9 years 8 months 3 weeks 1 day 16 hours ago) and read 6952 times:

I don't know if that was the specific plan with jetBlue but I do believe a manufacturer would stand to make a profit on a sale even if the planes are handed over for less than cost price. The planes don't even need to stay with their original owner - JetBlue can sink beneath the waves but the planes will be flown by someone somewhere for the next twenty years, and they'll need a lot of parts replaced over their lifetime.

At risk of muddying the point, it should be remembered that no airline will buy crappy planes, no matter what the purchase price. If an Airbus is free to buy but burns 10% more fuel than a Boeing (bought at full list price), Boeing will win every time. Continental would replace it's 737NGs and United it's A320s with Tu154s (second hand purchase price $200,000) in a flash if acquisition cost meant much.



fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 13, posted (9 years 8 months 3 weeks 1 day 13 hours ago) and read 6887 times:

Cedarjet,

You normally have some fairly reasonable ideas but your ideas about economics are completely insane. Let's work backwards.

Acquisition costs do mean a lot in aircraft selection. Those costs have to be amortized during the life of the airplane and present a component of costs that must be recovered in ticket prices. The Boeing 777-series generally outperforms the A340 series and outsells it despite the higher price tag. Yet the A340 continues to generate incremental sales for Airbus. Why?

You state that Airbus is profitable and cite that they pay back loans as evidence. There is a difference between an "economic" profit and an "accounting" profit. In the long term Airbus may generate accounting profits but not economic profits.

Remember that professional investors and traditional lending institutions are not willing to finance Airbus projects in full. That indicates that a disconnect between risk and return on Airbus projects. That is why the EU steps in offers what are truly not loans at rates below commericial levels.

A real loan must be paid back whether a project is profitable or not. The fact that Airbus pays back funds borrowed at sub-market rates does not prove that Airbus generates a sufficient return on the capital it uses.


User currently offlineLufthansa From Christmas Island, joined May 1999, 3213 posts, RR: 10
Reply 14, posted (9 years 8 months 3 weeks 1 day 11 hours ago) and read 6812 times:

Its really really simple.

The A320 first flew way back in 1988. Back then, it was far ahead of its time, not unlike the Fokker F-27 was (meaning a long life). Anyway, although the A320 has been updated a little bit here and there, it has been streached, and shortened, the basic high development costs were incurred way back in the 1980s.

So, many many many airframes later and that those costs are basically already well and truely recovered. So here is the thing. By increasing output, the any remaining costs to be recovered, are devided by an ever increasing number of airframes. Also, in this process, there are is an ever increasing number of parts from individual suppliers who also benefit in much the same way.

So by increasing its output, its unit costs fall. If you guys don't believe it, why have the Japanese, with some of the worlds highest labour costs, been able to maintain a competitive manufacturing sector? Things like cars, for example? They employed the concept of TQM, got their efficiency up, and divided it by an extremely large output. Hence the Toyota motor corp is one of the most important global players today.

The other thing is the way airbus have designed their aircraft usuing moduar omponents. This often means, you'll see the same, lav for instance, on an A330 as in an A320. This leads once again to lower unit costs. Something which boeing doesn't do all that often.

N79969..... im sorry but your comments about economics aren't exactly complete.

It isn't in society's interest to have company's making huge profits. It's in society's interest to have company's a cut throat competition, making only just enough profit for their existance to be sustainable. Why? its simple.... it basically leads to an increase in the spending power of our money, through greater efficieny, which in turn improves living standards for all. A great example is the American Automotive industry. Do you think, it would be helping the average american if GM could charge an extra $5000 bucks on each car?

Whether airbus makes a sufficient return on capital is really only of importance to investors, and private insitutions seeking to make large amounts of money. The fact that such institutions get wealthy doesn't necessairly make things good for the economy as a whole, nor the living standards of those in it any higher(on average). The only real question here that society needs to be concerned with, is, if by extending any loans to airbus, we are diverting resources that could be used for more profitable ventures to airbus? For example...lets say there was a huge computer industry (hypothetical example so nobody get worked up about it)... and we ended up putting resources into airbus instead of the computer industry which would lead to a much higher output. Then, instead of training in IT, we'd have ppl training in aerospace, we'd have a building being used for aerospace, etc ... and our limited resources not being allocated to their best use. That is the question for the european governments to be concerned with..... because that is gonna have a significant impact on living standards. An Individual company's profit has very little to do with it.... rather the value of these exports for trade purposes, and hence the level of economic activity the generate (as well as their ability to in turn purchase imported goods for use in that particular economic zone) are really the focus of the government.

In airbuses case.... I think the jury is still out.


User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 15, posted (9 years 8 months 3 weeks 1 day 10 hours ago) and read 6781 times:

PVG, the reason Boeing isn't using the same sales concept as Airbus is - at least not any more - is that Boeing is quite focused on "shareholder value", which, unfortunately, usually leads to short-term thinking...

Dozens of examples, in all kinds of industries, have shown that (and this is just one example of hundreds) companies can sometimes push up their own stock price by announcing large amounts of layoffs: the fact that quite a number of companies suffer from the knowledge-drain that often goes with this only becomes apparent a few years down the line, at which time a new idea for holding up the "shareholder value" will have to be found.

Look at the number of people that Boeing has hired and fired in the last 10 year - and compare those with the numbers at Airbus...

Airbus does look at making a profit, they're just not out to make a huge profit with the sale itself, but they - seem to - much more consider the sale in terms of the lifespan of the deal: yes, this probably does lower the profit made on each deal on it's own, but since they're not really unsuccessul at closing deals these days...

There's no doubt that Boeing makes brilliant airplanes, but so does Airbus - but, as always, the technical advantages of one product over the other have to be worth it: if an airline, based on it's own parameters, decides that the technical advantages will not pay for themselves, they'll go for the other option.

Regards,
Frank



Smile - it confuses people!
User currently offlineTrex8 From United States of America, joined Nov 2002, 4763 posts, RR: 14
Reply 16, posted (9 years 8 months 3 weeks 1 day 8 hours ago) and read 6714 times:
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Even if Boeing only sold planes with a substantial "profit per unit", they can still lose money big time as the late 90s demonstrated amply!
Airbus and GE have taken the HP/Epson printer model of marketing. Almost give the product away and then kill the customer on parts/expendables.Same reason Pratt has gone to heck, GEs pricing is almost predatory.


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 17, posted (9 years 8 months 3 weeks 1 day 7 hours ago) and read 6680 times:

Lufthansa,

I understand the concept of "perfect competion" and the allocative efficiency that it would produce for society. However since it is basically inconceivable that such a market will exist for transport category airplanes, I stand by my comments 100%

Despite by having a duopoly, Airbus and Boeing do not enjoy the profits that would ordinarily be seen firms that ordinarily have a duopoly. There are too few consumers for commercial airplanes. Although I have never bothered constructing an econometric model, I do not think it is difficult to conclude that buyers of commerical airplanes have substantial power in swaying pricing.

I think the case of Airbus is fairly clear cut. Boeing and Airbus force one another to innovate and that is good. But Airbus fundamentally exists as an EU program to transfer jobs away from the United States to Europe. The fact that major shareholders are government institutions rather than ordinary investors adds credence to this argument. The governments of France and Germany are not going to care very much about bumping up returns very much so long as Airbus maintains certain employment levels in their countries. Return on capital used is almost a non-factor in that environment

Leskova,

If Airbus gouge on spare parts to account for their cheaper prices, don't you think operators would pick up on this fact and incorporate it into their decision? Or do you think it is enough of a deferred expense that they will pursue a lower acquistion expense instead?



[Edited 2004-12-12 14:53:52]

[Edited 2004-12-12 14:56:25]

User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 18, posted (9 years 8 months 3 weeks 1 day 7 hours ago) and read 6666 times:

N79969, I guess it's more of a question whether Airbus' spare-prices are just higher than Boeing's, or if they indeed gouge their customers on them...

I don't think there are too many airlines out there that are dumb enough to fall for a ploy like "we'll sell the plane cheap and make twice as much on the spares - it just seems to me that Airbus' focus is more on making money with the whole deal (over the lifespan of the aircraft being sold), while Boeing seems to be focussing on making money with the sale itself...

And the fact that some deferring of expenses is involved probably helps as well - too bad that no-one here seems to have access to real numbers (or at least no-one seems to be able/allowed to give the numbers out)... I'd really love to see calculations for the respective competing models based on a lifespan of 10 or 20 years...

Regards,
Frank



Smile - it confuses people!
User currently offlinePVG From Hong Kong, joined Dec 2004, 724 posts, RR: 2
Reply 19, posted (9 years 8 months 3 weeks 1 day 7 hours ago) and read 6661 times:

I understand the concept of maximizing efficiency and reducing unit costs by expanding output. I also agree that US companies tend to focus too much on shareholder return and too little on the larger benefit to society. It is something that has occurred in the past twenty five years since the Reagan/Thatcher revolution. At the time it was necessary as the economy was becoming stagnant. However, the pendulum now seems to have swung too far.

Getting back to the point. TREX8 talks about GE and predatory pricing, which is what Airbus does as well. GE can afford it by using their finance unit to subsidize their losses or non-profits on engine sales. Airbus uses government subsidies and profits from the A330 to subsidizes losses on their other products. Notice how quickly Airbus reacted to the 7E7? The A330 is obviously their cash cow and only truly superior product offering and it seems that they will do anything to defend. However, again, how can they afford to invest over 5 billion dollars at a time when they are launching the A380 (with apparent cost overruns) and their military product? I understand the need to think about society, but at some point profits need to take precedence. Do you think that they could raise the money to fund all of these projects at the same time if they were truly a profit driven private enterprise? I doubt it.

I'm tired of this. AIRBUS has bought their market share whether you believe it or not.


User currently offlineLeskova From Germany, joined Oct 2003, 6075 posts, RR: 70
Reply 20, posted (9 years 8 months 3 weeks 1 day 7 hours ago) and read 6648 times:

Airbus uses government subsidies and profits from the A330 to subsidizes losses on their other products. Notice how quickly Airbus reacted to the 7E7? The A330 is obviously their cash cow and only truly superior product offering and it seems that they will do anything to defend.

Should they have said (to use your words) "well, the A330 is our cash cow, so let's give that market to our competitor"? And, by the way: which losses on other programs?

As for the only truly superior product - Boeing and Airbus both don't seem to be having problems getting profits from their almost-equal products... the A320 series and the B737NG...

However, again, how can they afford to invest over 5 billion dollars at a time when they are launching the A380 (with apparent cost overruns) and their military product?

Regarding the A380, the cost overruns are not really too much of a surprise, and I doubt that too many people are losing sleep over them - and Airbus does seem to be getting to the end of the spending on the A380, since they already know in which margin the overrun will be...

As for the A400M - that's being financed by the governments buying the plane... with South Africa a new candidate that has just annouced its interest in joining.

Do you think that they could raise the money to fund all of these projects at the same time if they were truly a profit driven private enterprise? I doubt it.

Do you honestly think they could raise the money if they were just throwing it down the drain? In case you've missed it - while Europe's budget deficit is not quite near the awe-inspiring numbers the US produces these days, the days when European governments could simply go out and spend money without anyone asking questions about it are long, long, long gone.

AIRBUS has bought their market share whether you believe it or not.

... by offering a product that the airlines want, at a price they can afford and by using sales teams that listens to what their prospective customers say...

Regards,
Frank



Smile - it confuses people!
User currently offlineWhitehatter From , joined Dec 1969, posts, RR:
Reply 21, posted (9 years 8 months 3 weeks 1 day 6 hours ago) and read 6620 times:

More laughable nonsense.

Airbus is an evil Government program which is State owned even though the company is owned by EADS which is quoted on the Amsterdam stock exchange and also by BAE which is totally private....

Airbus doesn't make money on sales even though it does generate profits...real profits which are apparently an accounting trick...

Airbus is subsidised even though these subsidies are actually loans which get repaid and are not for 100% of the development costs...

Airbus is dishonestly factoring in longterm revenues into the sales price of aircraft which is scadalous, even though HP and Lexmark are extreme examples of just that policy....

and the golden one

But Airbus fundamentally exists as an EU program to transfer jobs away from the United States to Europe

I don't think I have read such arrogant crap in years. Since when was airliner manufacturing the God-given right of the USA?


User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 8 months 3 weeks 1 day 6 hours ago) and read 6598 times:

Leskova,

I think the point is that Airbus should finance a 7E7 rival out of pocket (with cash from fat A330 sales) rather than turning to the EU yet again for another round of "loans" at sub-markets rates that do not necessarily require repayment.

Considering all the whining from Europe that is heard about alleged "indirect subsidies" to Boeing, the A400M is the grand-daddy of all indirect subsidy programs if one thinks about. If Europe is going to spend money on military technology, why not spend it on a new and innovative weapons/intelligence platform that will complement existing NATO capabilities? Why another transport when Europe agonizes over deploying troops or metal even to its own backyard? Further, European strategic thinkers know well that the US will never let a future threat from the east really harm Europe. I think the real reason behind the A400M is to lower the amortized costs of light bulbs and electricity in Tolouse for Airbus as a whole.

As far as the "life of the deal" argument goes, I think Airbus made a conscious decision to forego profits in order capture market share in the low-cost market beginning with EasyJet. When you have malleable shareholders such as elected European governments, you can pursue such market-distorting strategies.


User currently offlineWidebody From Ireland, joined Aug 2000, 1152 posts, RR: 8
Reply 23, posted (9 years 8 months 3 weeks 1 day 6 hours ago) and read 6576 times:

This 'only selling for a profit' line is marketing talk, not sales talk. Read why Boeing replaced their top salesman a week or two ago. The airlines has stated over and over to Boeing that they were not at all listening to the airlines; they were hearing, but nobody was listening. And forget this line of selling below cost, those that use it clearly no nothing about aircraft pricing. Aircraft price is based on your competitors price. And nothing more. The better your aircraft; the better your margins. Aircraft purchasing boils down to price. If you've a good aircraft, you don't need to fund operational cost targets etc. to meet guaranteed reliability targets. If you've a bad aircraft, it's going to cost you a fortune. This is why Boeing are making a fortune on the 777; and is why they made a fortune on the 747 i.e. no competition.



User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 24, posted (9 years 8 months 3 weeks 1 day 6 hours ago) and read 6576 times:

"Since when was airliner manufacturing the God-given right of the USA? "

I never said that. But the EU has certainly adopted a position that it is entitled (I emphasize the word "entitled") as a matter of near-birthright to have 50-percent or more of the market. Perhaps you should put that question to Brussels before you ask an American.

Unlike Airbus, Lexmark and HP have to make decisions based on the full brunt of the risks they undertake. You seem to imply that Airbus has adopted this model of low upfront costs and expensive spares. If so, that has been only made possibly by advantegous financing from the EU not available to Boeing.


25 Lufthansa : Welll then...why not make it available to Boeing? Why doesn't the american governement offer to help boeing this way (maybe they could redirect funds
26 N79969 : "And forget this line of selling below cost, those that use it clearly no nothing about aircraft pricing." Widebody, After reading your post riddled w
27 N79969 : Lufthansa, I think you know the answers to the questions you posed. To put it simply, the US does not have an industrial policy. If we offer the deal
28 Post contains links and images Leskova : Hmm... we're once again quite far away from the actual topic of the thread, but - nonetheless - I think I'll post these quotes from the EU's website r
29 Lufthansa : Boeing is never going to recover its 1992 marketshare against airbus unless there is a significant shakeup of the global players...ie...we'd need a ne
30 Trex8 : I said it before and I'll say it again, if its ok for Washington to subsidize farmers in producing a product, why can't they at least subsidize the R
31 PVG : Lufthansa: You seem to forget to mention the amount of American blood that was shed on European soil in exchange for some aircraft technology, a 20 ye
32 PlaneSmart : Here we go again........ For all u armchair experts, there is far more to selling aircraft than the upfront cost. The cost of an aircraft is acquisiti
33 PVG : There is far more to selling any major capital intensive long-term industrial use product/technology, not just planes. Again, people keep bringing up
34 PlaneSmart : PVG And I repeat, so Boeing has been sitting around watching this with their thumb up their butts for 30 years? No they haven't, and neither have Airb
35 PVG : PS, OK noted. I don't believe it, but I could be wrong. Yes, it's true that the market leader tends to lose sight of the ball until they have a compet
36 Lutfi : There was an interesting editorial in ATW on this - talking about RR/GE/PW as well. RR is "happy" to make less money than GE/PW, and it's share price
37 Lufthansa : Lufti Thats very true. Just look at the airlines that have now got a very good relationship with RR, that certainly looks set to continue. AA's 777s,
38 Widebody : N79969, And that's one of fundamental differences between Airbus and Boeing in their definition of pricing. PlaneSmart has it about right, Airbus pric
39 N79969 : Leskova, The language below is from the 1992 agreement and is the part that EU has wantonly chosen to disregard. The EU has no interest whatsoever in
40 PVG : Well, at least we have Widebody admitting that there is a possibility in 20 years time that Airbus will have lost money on a deal because they over-pr
41 Widebody : PVG, As with all manufacturers, the cost and exposure will already have been calculated and allocated. Don't forget that the longer an aircraft is in
42 PVG : Yes, it's called accounting! So, like I said, without being able to see how costs and expenditures are accounted for, we will never know if and/or how
43 PlaneSmart : Quite an entertaining thread, with A v B battle lines not drawn as sharply as usual. For those too young to remember, let me summarise the A / B histo
44 PVG : PS: Everything that you say is 100% correct. I never said that Airbuses are inferior or bad. I said that they buy market share and hide the losses in
45 Post contains links PVG : http://www.airliners.net/discussions/general_aviation/read.main/1860998/ Looks like it's going to take less than 20 years for the pyramid scheme to un
46 ODwyerPW : Miscellaneous Musings. Boeing 737-800 has a list price between $61.5mil - $69.5mil. Factor that most carriers receive a 25% to 45% (RyanAir deal?) dis
47 Ruscoe : Word is that Air Asia is going Airbus at under 30 million per craft. Pricing sems impossible to me. Ruscoe
48 BestWestern : Guys - Dont forget that Boeing went very low with Ryanair - so low that the FR CEO stated that "we raped them". Have we ever thought that Airbus can c
49 PlaneSmart : Where is the 'word' coming from? Both A & B insert strict confidentiality clauses, so customers talking before all the i's are dotted and t's crossed
50 GKirk : I was just going to say the same thing that BestWestern said about Ryanair "raping" Boeing on the 737-800 deal
51 PlaneSmart : As i said in an earlier post, B revenue expectations per unit sale for the 737 must trend down, because although it's a good a/c, it's near the end of
52 Col : For me also, I do not understand why Boeing did not take the family concept further. They invented the thing across products with the 757/767. That wo
53 Post contains links Hoya : For those that want a source on the under $30 million price tag for AirAsia's A320s, well here it is: http://yahoo.reuters.com/financeQuoteCompanyNews
54 ETStar : Funny how people take a defensive positon when the issue of Boeing not willing to cut prices is raised, saying that Boeing is here to make money this,
55 Post contains images Trex8 : > said the analyst, who declined to be named whats an analyst - someone who came uninvited , to provide an answer for a question which was not asked a
56 Post contains images Airbus Lover : I can attest that AK is paying well below US$30 mil a piece and not to mention all the goodies that comes along with it. I doubt Airbus is doing busin
57 Post contains links PVG : http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/122380/1/.html How many times to the words/phrase "cheap" and "lower price" show
58 Widebody : If you consider that Boeing products are over-priced, then Boeing would appear to be over designing. A manufacturer could build you a 300mUSD A32x/73x
59 PVG : Yes, Widebody, good point. Only problem is that if you design to buyer's spec. and your main competitor decides to "SELL AT A LOSS!" to grab market sh
60 BestWestern : Airbus is a profitable company - FACT Boeing is a profitable company - FACT Now and again companies lose sales to competitors. It seems that whenever
61 Sebolino : @ PVG: Airbus doesn't lose money, and pay back all the aid it receives (limited to 33% of the project price). Now stop your ridiculous whining. I don'
62 Post contains links N79969 : I think PVG is correct especially in the light of the fact that Air Asia is apparently paying a figure south of $30 million. That Airbus could actuall
63 Post contains images Scbriml : Wow, Airbus' ability to build planes that airlines want, and sell them in big numbers is really winding some people up!
64 Sebolino : Remember that Enron was "profitable" along with Worldcom and that CreditLyonnais maintains high ethical standards because they say they do in their an
65 Widebody : PVG, You don't design to your buyers spec every time a sales campaign pops up. The airline can chose from a series of pre-defined catalogue options, a
66 N79969 : "You will perhaps be able to explain to us how Airbus did pay back every cent of launch aid it had, without earning money as you insinuate ..." Why do
67 Widebody : N79969, I'm not referring to the Ryanair deal, I'm referring to the way Ryanair do business. The large proportion of their money doesn't come from the
68 Sebolino : Why don't you dot that since you seem so convinced that it is actually true? Start with the A300 program proceed to the 310, and keep going. I think y
69 Post contains images Scbriml : N79969, To apply some GWB policy logic here - Don't like the way we do it? Tough!
70 ODwyerPW : Widebody, Look a few replies above. I discuss Boeing's need to discount deeper than Airbus specifically; stemming from their higher list price.
71 PVG : I give up! Airbus is better and their costs are lower than Boeing's. You guys are right, they have re-invented the airline business. A revolutionary c
72 Widebody : They have re-invented it PVG, but the certainly have changed the way it deos business. One fact that always astounds me about Airbus is the fact that
73 PVG : Widebody, I think that one of the reasons that AIRBUS needs to keeping pumping out product and win business at all costs is that fact that layoffs in
74 Widebody : True but it seems to have been overkill, Boeing just don't seem to have the resources to meet demand these days. Airbus suffered the same decline, alt
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