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Airbus "Creates" A350 Client - Lesson For Boeing?  
User currently offlineReggaebird From Jamaica, joined Nov 1999, 1176 posts, RR: 0
Posted (9 years 4 months 2 days 8 hours ago) and read 10211 times:

So, according to media reports, Airbuse has "created" a launch customer for the A350. Because Airbuse helped to finance the US Airways/America West merger, the new carrier has agreed to take A350's beginning in 2010. Do you think that this is an innovative move or is it a risky manuever that will cause Airbuse more heartache than they have with the A350 now? Furthermore, should Boeing do the same thing for other struggling carriers? For, example, could funding for United Airlines lead to that carrier taking large numbers of 777-200LR's or even being the launch customer for the Boeing 747Adv?

Reggaebird

94 replies: All unread, showing first 25:
 
User currently offlineKl911 From Czech Republic, joined Jul 2003, 5140 posts, RR: 15
Reply 1, posted (9 years 4 months 2 days 8 hours ago) and read 10181 times:

Quoting Reggaebird (Thread starter):
Do you think that this is an innovative move or is it a risky manuever that will cause Airbuse more heartache than they have with the A350 now?

Nothing wrong with it.. Business is Business. Look at what boeing does with the tanker deal...

KL911


User currently offlineUSAF336TFS From United States of America, joined Apr 2005, 1445 posts, RR: 52
Reply 2, posted (9 years 4 months 2 days 7 hours ago) and read 10064 times:

Quoting Kl911 (Reply 1):
Nothing wrong with it.. Business is Business. Look at what boeing does with the tanker deal...

I don't see the similarities, unless you see a parallel with the US Air Force and US Air.
It's a very risky move on Airbus' part, and one that will either pan out or become disastrous for them. For US Air, I'm wondering if there's a "bail out" clause in their contract for the A350. I'm not sure what the thinking is when you have your house in foreclosure and decide to go out and order a new Cadillac.

[Edited 2005-05-20 17:58:25]


336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
User currently offlineCol From Malaysia, joined Nov 2003, 2116 posts, RR: 22
Reply 3, posted (9 years 4 months 2 days 7 hours ago) and read 9978 times:

Kl911,

Don't believe that you want to say that this Airbus deal is similar to Tanker deal. One is corrupt and abuse of power, using tax payers money. The other isn't, but I'm not going to confirm which one is which!!!


User currently offlineFlySSC From United States of America, joined Aug 2003, 7412 posts, RR: 57
Reply 4, posted (9 years 4 months 2 days 7 hours ago) and read 9949 times:

Airbus has created a launch customer for the A350

No need. Airbus already had a launch customer for the A350 Air Europa ...


User currently offlineCahiwa From United States of America, joined Mar 2005, 52 posts, RR: 0
Reply 5, posted (9 years 4 months 2 days 7 hours ago) and read 9886 times:

Chalk me up to the risky column. Only because this merger is really years off from any real dividends (paying off debt, cut-cut-cut, etc.) I wish all involved the best but think in this case it is questionable. Throwing good money after bad?

Ciao... K


User currently offlineDanny From Poland, joined Apr 2002, 3509 posts, RR: 2
Reply 6, posted (9 years 4 months 2 days 7 hours ago) and read 9862 times:

Quoting Col (Reply 3):
Don't believe that you want to say that this Airbus deal is similar to Tanker deal.

Then check Hawaiian deal or recent Air Canada deal. As said above - business is business and you need to be flexible to push sales.


User currently offlineSlider From United States of America, joined Feb 2004, 6814 posts, RR: 34
Reply 7, posted (9 years 4 months 2 days 7 hours ago) and read 9838 times:

Quoting Cahiwa (Reply 5):
Throwing good money after bad?

Bingo.

As one poster whose name escapes me now noted, why would Airbus throw a measly $250M at a merged set of struggling carriers only to create $10B of liability a few years from now?


User currently offlineCol From Malaysia, joined Nov 2003, 2116 posts, RR: 22
Reply 8, posted (9 years 4 months 2 days 7 hours ago) and read 9751 times:

Danny,

I think the deal is excellent for US, HP and their employees. Just making a little humor out of the comparison Kl911 made with the Tanker deal, which was illegal and gross misuse of my tax dollars, and nobody should compare any deal of this nature to that embarrasing debacle.

Col


User currently offlinePM From Germany, joined Feb 2005, 6915 posts, RR: 63
Reply 9, posted (9 years 4 months 2 days 7 hours ago) and read 9724 times:

Not really sure whose 'side' I'm on here! But, for what it's worth, didn't McD sell a bundle of MD80s to TWA at give-away prices a few years back? First people decried it. Then they praised McD's wisdom.

(Then McD went bust...)


User currently offlineMD80Nut From United States of America, joined Jul 2003, 929 posts, RR: 8
Reply 10, posted (9 years 4 months 2 days 7 hours ago) and read 9699 times:

Quoting PM (Reply 9):
(Then McD went bust...)

Nope, McD merged with Boeing. They never went "bust" or bankrupt either.

Cheers, Ralph



Fly Douglas Jets DC-8 / DC-9 / DC-10 / MD80 / MD11 / MD90 / 717
User currently offlinePM From Germany, joined Feb 2005, 6915 posts, RR: 63
Reply 11, posted (9 years 4 months 2 days 6 hours ago) and read 9657 times:

Quoting MD80Nut (Reply 10):
Nope, McD merged with Boeing. They never went "bust" or bankrupt either.

Fair enough but it's a fine point!  Smile


User currently offlinePM From Germany, joined Feb 2005, 6915 posts, RR: 63
Reply 12, posted (9 years 4 months 2 days 6 hours ago) and read 9622 times:

Quoting MD80Nut (Reply 10):
Nope, McD merged with Boeing. They never went "bust" or bankrupt either.

Nor, upon further reflection and two more glasses of red wine, does the McDonnell Douglas name or any of its civil products seem to have survived the, er, "merger".

[Edited 2005-05-20 18:57:57]

User currently offlineNYC777 From United States of America, joined Jun 2004, 5758 posts, RR: 47
Reply 13, posted (9 years 4 months 2 days 6 hours ago) and read 9540 times:

Look if Airbus had just loaned the money to US without the A350 being forced down the throats then it would have been a good deal. But now what Airbus has done was to force a carrier to not only take on $bns worth of debt but Airbus dictates the timing of when they take on that debt irregardless if US can or cannot take on that debt load and irregardless if US has use of the planes or not.

Bad deal for US and a bad deal for Airbus.



That which does not kill me makes me stronger.
User currently offlineSolnabo From Sweden, joined Jan 2008, 852 posts, RR: 2
Reply 14, posted (9 years 4 months 2 days 6 hours ago) and read 9441 times:

It looks to me that USA Civil Avi. couldnt care less if US / HP and (maybe) UA goes bankrupt. Is it only AA DL CO NW that counts here?

IMO Airbus are to help them and save thousands of jobs, am I right or am I right?

 twocents 

Micke//SE



Airbus SAS - Love them both
User currently offline'Longreach' From Australia, joined Jul 2001, 505 posts, RR: 0
Reply 15, posted (9 years 4 months 2 days 6 hours ago) and read 9410 times:

Quoting NYC777 (Reply 13):
Look if Airbus had just loaned the money to US without the A350 being forced down the throats then it would have been a good deal.

A good deal to WHO exactly???


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2826 posts, RR: 42
Reply 16, posted (9 years 4 months 2 days 6 hours ago) and read 9387 times:

Quoting Kl911 (Reply 1):

Nothing wrong with it.. Business is Business. Look at what boeing does with the tanker deal...

Yep, in front of Congressional review, and people in Jail.

Which is not what I am saying occured here, your example is out of line.

This is a bit different then examples in the past where Boeing has bailed out companies to keep them afloat when they already had a order backlog. This is a new investment, in exchange for committing to a new product, no matter the price difference over the Boeing model. (US explicitly said that they could cancel it if it did not match the 787s performance on the other hand).


User currently offlineMham001 From United States of America, joined Feb 2005, 3645 posts, RR: 5
Reply 17, posted (9 years 4 months 2 days 5 hours ago) and read 9375 times:

Quoting Solnabo (Reply 14):
It looks to me that USA Civil Avi. couldnt care less if US / HP and (maybe) UA goes bankrupt. Is it only AA DL CO NW that counts here?

IMO Airbus are to help them and save thousands of jobs, am I right or am I right?

Spoken like a citizen of a socialist system.

Its a free market here. The strong survive and the problem is over-capacity. Something needs to give and Airbus is just extending the agony. It is good for the employees, they don't have to look for work right away. Although, many of the routes would still need to be served and somebody solvent would just step in and use employees too. I don't think this is good for US civil aviation as a whole.


User currently offlineNYC777 From United States of America, joined Jun 2004, 5758 posts, RR: 47
Reply 18, posted (9 years 4 months 2 days 5 hours ago) and read 9348 times:

Quoting Solnabo (Reply 14):
IMO Airbus are to help them and save thousands of jobs, am I right or am I right?

No Airbus is protecting it's investment in the US and trying to save a project that has not been selling very well. They really don't give two hoots about saving US jobs. If they did then why aren't they offering terms to UA or saving DLs butt?

Bottom line is Airbus is going to add to the debt load of US, they are telling them when they will accept the A350 irregardless of market conditions interest rates, route that they would serve etc.(these are things that airlines usually have control over).



That which does not kill me makes me stronger.
User currently offlineFlying_727 From United States of America, joined Jun 1999, 435 posts, RR: 5
Reply 19, posted (9 years 4 months 2 days 5 hours ago) and read 9323 times:

Isn't it funny that Airbus has Money to invest in HP/US, but has to ask the state to give it money to develope the A350?

User currently offlineAither From South Korea, joined Oct 2004, 858 posts, RR: 0
Reply 20, posted (9 years 4 months 2 days 5 hours ago) and read 9322 times:

Boeing has no lessons to receive from Airbus,
they did the same with Primaris and the 7E7.

These things have always existed in the aviation industry (e.g. hugues and TWA).



Never trust the obvious
User currently offlineMidnightMike From United States of America, joined Mar 2003, 2892 posts, RR: 14
Reply 21, posted (9 years 4 months 2 days 5 hours ago) and read 9310 times:

Risky deal, 250 million, delay of the A320's, and the hope of the company to purchase the A350 in the future. Who is to say that the company will not go bankrupt and that would leave Airbus holding the keys to the A320's, A350's, and about $250 million less from the checking account.

Saying all that, I am sure that Airbus had the bean counters lay out all of the risks, so who knows. On paper, seems like a great deal for US Air/American West, and a very risky deal for Airbus.



NO URLS in signature
User currently offlineAither From South Korea, joined Oct 2004, 858 posts, RR: 0
Reply 22, posted (9 years 4 months 2 days 5 hours ago) and read 9306 times:

Quoting Flying_727 (Reply 19):
sn't it funny that Airbus has Money to invest in HP/US, but has to ask the state to give it money to develope the A350?

They dont give they borrow... aren't you tired of bashing Airbus on their financing ? Boeing and Airbus products are highly similar so why you can't stand they both have 50% of the market ?



Never trust the obvious
User currently offlineSolnabo From Sweden, joined Jan 2008, 852 posts, RR: 2
Reply 23, posted (9 years 4 months 2 days 5 hours ago) and read 9292 times:

Quoting Mham001 (Reply 17):

"spoken like a socialist system"

I didnt know Europe was socialits, its a free market here if you didnt know! Maybe you know something I dont? Maybe more liberals than US, and not so tighta$$ed conservative.  Wink

Jeeehhhh....  Yeah sure



Airbus SAS - Love them both
User currently offlineNYC777 From United States of America, joined Jun 2004, 5758 posts, RR: 47
Reply 24, posted (9 years 4 months 2 days 5 hours ago) and read 9276 times:

Quoting Aither (Reply 20):
Boeing has no lessons to receive from Airbus,
they did the same with Primaris and the 7E7.

What are you talking about...
1) Primaris is new airline..one that hasn't started scheduled service
2) Boeing has not provided financing to them
3) Primaris is still looking for financing to start operation and start to acquire aircraft.

I think you need to check your facts.



That which does not kill me makes me stronger.
25 Kdeg00 : You're joking, right? It's either that or you stopped reading about corporate law with sophomore year economics. A "free market" economy offers neith
26 Aither : That's the way it looks... now if you check the Primaris situation and management, their "independence" from Boeing is highly doubtful. At least, Air
27 DAYflyer : Wow...a whopping 10 frames....very impressive! It's not funny at all. Just goes to prove Boeing's position that Airbus is more than healthy to stand
28 Lnglive1011yyz : Some people just find difficult to read under the lines. Governments use easy ways to hide what their real intent is by using colourful language. Per
29 Post contains images NYC777 : Hardly, they're trying to prevent 100's of planes from re-entering the market and sell a plane that has not been selling well at all. They could give
30 Pope : This new US is a launch customer in name alone. I can't imagine that the board would consider this a bona fide indication of customre support for the
31 Mham001 : I didn't know Europe was one government.
32 Reggaebird : Obviously spoken by someone who lived in a country where socialized systems dominate!! I'll stick with the market-driven approach any day.
33 Kdeg00 : I would have thought the whole EU thing was pretty well public knowledge by now.
34 NYC777 : I didn't say that!!!!!
35 Reggaebird : Come to think of it, why would an LCC based in Phoenix, Arizona need a 300 passenger aircraft with an 8,000 mile range? It might be useful if they app
36 Eha : Do you believe Boeing Capital corporation helps airlines financing Airbus plane ???? Both companies haves financial services helping airlines custome
37 Mham001 : Thats the short-term view. Propping up a sinking ship only prolongs the ships' sinking. Most of those lost jobs will be recreated when those routes a
38 BlackKnight : Bottom line which is either right or wrong, there is a whole lot more to these deals than what meets the press or is printed. I would buy a plane who'
39 Reggaebird : Financing the purchase of new aircraft is different than propping up a bankrupt company so that you can force your products on them. Airbuse is now p
40 Mariner : Airbus is doing this? GECAS is not involved? Not PAR Investment? Nor ACE Holdings? Nor Air Wisconsin? Nor Wexford Capital? Only Airbus? Wow. Please t
41 Kdeg00 : A look at how the workforces in other merger-driven industries (telecom, printing, automobile, computing) have fared post merger should put the lie t
42 QR332 : That is only partially true - the MD11 and IIRC the MD-80 series were still being made after the merger, and the MD series was continued with the Boe
43 PlaneSmart : Well said. Later this year you will see at least one more merged entity, and B will likely provide a similar package, although it may use mirrors (GE
44 Slider : Agreed- it's delaying natural selection. And by doing so, it's detrimental to the rest of the industry who is not on life support. It only accelerate
45 Commavia : I agree. It isn't fair competition, and it isn't fair to Boeing, but, as you say -- business is business -- and all's fair in love and war. Airbus is
46 M27 : Do these institutions have an agreement that the new airline can only borrow money from them? Does this agreement mean they can only lease aircraft f
47 Mariner : I have read nothing that prevents it. I have read nothing that prevents it. I have read nothing that says that. Generally, I really do not understand
48 M27 : I believe you do Mariner. I see a difference because there is one.
49 Mariner : Seriously, I do not see your point. I may be many imperfect things in this world, but I am not a liar. Nor do I see the point in lying on an internet
50 PlaneSmart : For the forseeable future, there are very few players keen to increase their long-term exposure to the US-based airline industry. The queue actually
51 M27 : Mariner: I believe I stated in the first paragraph of my reply, through questions, the difference. Beyond payment with intrest and or and equity stake
52 F4N : PlaneSmart: My sentiments exactly. I believe that the US/HP merger is an entity contrived by the institutions that these carriers owe a ton of money
53 Mariner : As stated by CEO Parker, if the A350 fails to meet certain specific criteria - in comparison with the B787 - then HP/US can walk away from the deal i
54 PlaneSmart : I think you are being a bit hard on US and HP. As always, there is what is in the public eye, and what is not. The magnitude of the 'meeting of the m
55 Mariner : There is a point that many are forgetting. America West is owned by David Bonderman. I mean, it is owned by him - he controls the major voting block.
56 Post contains links Mariner : And in case anyone doubted Mr. Bonderman's role in the deal: http://money.excite.com/jsp/nw/nwdt_...d=dji-00089020050520&date=20050520 mariner
57 Jet-lagged : Yes, a bit ironic, but that is just re-sequencing cash-flow assumptions. Airbus has decided that they'll do the A350, and their SugarDaddies will pon
58 Mariner : Then CEO Parker can cancel the order and go straight to the B787. He has said it is a condition of the aircraft order - not the loan - that the A350
59 Commavia : At which time Airbus will call in their $250M loan?
60 N79969 : I think F4N has it about right. As a creditor, do you sit and do nothing and watch your outstanding claims against US go to zero or do you front a lit
61 Mariner : I have no evidence that they will do that, nor do you. However, since you are determined to make Airbus a villain, let us assume that they do. If, by
62 Commavia : You notice the question mark at the end of my question? I was not stating it as fact, as if I had any evidence, I was asking a question. And, I might
63 Post contains links NAV20 : This story offers a new angle on the deal. If Airbus had not helped in the bail-out it would have faced a hole in its present A320 order book. In maki
64 RwSEA : As much as $250M sounds, it really isn't a huge amount of money for Airbus (how much is the list price for an A380 anyway?). People are announcing $1
65 Mariner : Then I misinterpreted you, and I apologize. You are correct, I did not notice the question mark. NAV20: And they have succeeded - as long as the plan
66 NAV20 : Agree, mariner. In their position I might have done the same; although, as you imply, it would depend on whether I was satisfied that the A350 will b
67 Post contains images Mariner : I would seriosuly doubt that pushing back 30 x A320 orders is going to cause them too much - if any - grief. The lines are not under-utilized, and I
68 NAV20 : Agree again, Mariner, depending on where the 30 delivery slots are, they should be able to re-allocate them. But, IMO, the single-aisle order book is
69 Monteycarlos : Very much agree... I read a few articles last week that had some interesting analysis on the cash flow for Airbus for the next couple of years... I c
70 Mariner : I am aware you think that. A while, at least, I agree. You mean the 300/310 perhaps? I don't know what the 330/10 is. But yes, the 300/310 is pretty
71 NAV20 : Hi Montey! Sorry, mis-type, meant 'A330' - edited.
72 Post contains links and images NAV20 : Yes, Mariner, A300 - editing like mad!   Montey, was the cash flow article this one? I only found it myself a couple of days ago - pretty perceptive
73 Cloudy : I think F4N has it about right. As a creditor, do you sit and do nothing and watch your outstanding claims against US go to zero or do you front a lit
74 Jet-lagged : Considering only these orders you are right. Maybe $2B in revenue that they'll have to delay a few years. But if, in the bigger picture, they can use
75 NAV20 : Or, Jet-lagged, it could be a disaster for them. If the aeroplane isn't going to be competitive, there's no point in launching it; it would literally
76 Jet-lagged : I can see your logic in this and just might agree. A decade ago they might have been the leaders in adapting new technologies, for example, a nicer c
77 PlaneSmart : 1. A and financiers wouldn't consider credit/advances previously extended to US as an investment. 2. A significant portion of these advances have alr
78 Mark777300 : Anyone who poured money into this merger will regret it in a number of years to come. I'll even bet that by the time the A350 is ready for delivery, t
79 RamerinianAir : NEWS FLASH: America is not at war, we do not need a military or military supplies/technology. We do not need tankers for long flights out to the Middl
80 BlackKnight : Lets not forget Airbus must have or will help negotiate landing slots. Slots in places not in the current flight plans (further distances) for why els
81 Post contains images B787 : I think the fact a person has gone to jail over their involvment in one of two deals mentioned means it's fairly obvious which deal you're talking ab
82 AvObserver : "It's going to either cannibalize or completely destroy the market for the A330 in just a few years," says Doug McVitie, a Scottish aerospace analyst
83 F4N : To all: An interesting topic, no? I have to admit that I am disappointed though not surprised that the attempt to bail out US is moving forward. What
84 BlueSky1976 : You keep bashing Airbus for that sale for no apparent reason. Why don't you show us the proof for your comments? I bet if US ordered 787s and Boeing
85 Atmx2000 : Except Boeing wouldn't do that because it has to be careful about its cash flow and debt burden, and US Air is too much of a risk and is in a weak co
86 BlueSky1976 : They probably would. But don't forget Boeing is one of the reasons why USAirways is in such a poor shape (the other main reason is Thomas Wolf's poor
87 Trex8 : not sure how this Airbus ploy is that different from Boeing buying an equity interest in the late 80s in UA to stop them entering ch.11 and to preser
88 N79969 : BlueSky1976, "But don't forget Boeing is one of the reasons why USAirways is in such a poor shape (the other main reason is Thomas Wolf's poor managem
89 Post contains images Keesje : Wasn´t Boeing & United Airlines the same company (United Aircraft and Transport Corporation) once. I don´t think Airbus can learn Boeing a lesson i
90 Commavia : In the 1930s!
91 Post contains links Keesje : Well, sort of: http://www.chicagobusiness.com/cgi-bin/article.pl?article_id=19464
92 WhiteHatter : Again the cheerleaders regurgitate the same old arguments and get their asses handed to them, then come back with the same old crap. Airbus is providi
93 Slider : I don't know what you mean by controlled VS uncontrolled, but if you're implying that some sort of artificial crutch or life buoy as is being used vi
94 Art : If the 744 was the right tool for the job for UA at the time, fine. Why not invest in a company that is buying the right equipment (from the same inv
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