Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 21 Reply 1, posted (7 years 9 months 1 week 5 days 3 hours ago) and read 10130 times:
Sorry, but the link takes one to a subscription page. The article can be accessed easily from Google News. I'd cut and paste but there are copyright issues. It's well worth a look since it's rare to see such candor.
"When all is said and done, more will be said than done".
Beauing From , joined Dec 1969, posts, RR: Reply 3, posted (7 years 9 months 1 week 5 days 3 hours ago) and read 9969 times:
Up to $100 million!!! The penalties are far stiffer than I ever imagined. If all launch customers are demanding such compensation, what will this do to A380 breakeven number?
To read the original article just go to Google News and use A380 as the search term.
WINGS From Portugal, joined May 2005, 2831 posts, RR: 70 Reply 4, posted (7 years 9 months 1 week 5 days 2 hours ago) and read 9909 times:
Quoting Beauing (Reply 4): Up to $100 million!!! The penalties are far stiffer than I ever imagined. If all launch customers are demanding such compensation, what will this do to A380 breakeven number?
Not all of the A380 customeres will be recieving this, just the early customeres such as Qantas, Emirates and Singapore Airlines. As soon as the A380 is certified they will increase the production rate to offset the late deliveries. Although am sure that Airbus will try to ease this loss with an offer for the A350.
N79969 From , joined Dec 1969, posts, RR: Reply 6, posted (7 years 9 months 1 week 5 days 2 hours ago) and read 9840 times:
Airbus must tread carefully and showing contrition for the delay is the right thing to do. If Airbus is smart, they will not make any further statements that place blame on customers.
PlaneDane From , joined Dec 1969, posts, RR: Reply 8, posted (7 years 9 months 1 week 5 days 1 hour ago) and read 9540 times:
My reaction is that Leahy's visit with Dixon was merely a thinly disguised sales campaign. Doesn't it seem like the focus was more on getting A330's and A350's into the Qantas fleet than anything else?
After all, matters concerning compensation between Airbus and Qantas are best left to the lawyers, not either of these men. Besides, the apology Leahy offers comes too little, too late and sadly follows comments made by Airbus that should never have been made.
Jacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 61 Reply 9, posted (7 years 9 months 1 week 5 days 1 hour ago) and read 9456 times:
Quoting WINGS (Reply 5):
Not all of the A380 customeres will be recieving this, just the early customeres such as Qantas, Emirates and Singapore Airlines
there were a few of these early customers..and if the rumoured price which QF paid for the A380s is true ($150 million), they might be basically getting one of The Whalejets for practically free (ok......80% off form listed price..thats damn cheap)
I COMPLETELY believe that the Airbus quoted 250-300 price to break even now is a load of bullocks..I would say its somewhere between 350-400......
might be a good selling point for the A350, but now it seems that future A350 profits are going to become cannabalized..that being said, I still think QF will go for the 777's and 787's....
Sphealey From United States of America, joined May 2005, 361 posts, RR: 0 Reply 10, posted (7 years 9 months 1 week 5 days ago) and read 9395 times:
I have to question if the public statements that are "leaking" out from the customers are just part of a re-negotiation campaign to lower the price a bit. Call it a refund, rebate, or penalty, but working with a number of CFOs on large contracts has taught me that it never hurts to ask that the price be lowered or that a rebate be given; the worst the supplier can do is say "no".
The reason I say that is I have been involved in some large technology purchases, although never in the airline industry, and no organization I worked for would have made solid business plans based on the 380 being delievered on time. There are just too many things new needing to be tested and integrated to assume that first delivery would occur +/- 5 minutes from the date specified on the original purchase order.
If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.
Jacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 61 Reply 11, posted (7 years 9 months 1 week 5 days ago) and read 9366 times:
Quoting Sphealey (Reply 11):
If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.
you are correct in your assesment...but you are making the assumption that the A380 will sell enough frames..and that's what I don't think will happen
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 21 Reply 12, posted (7 years 9 months 1 week 5 days ago) and read 9282 times:
Quoting Jacobin777 (Reply 10): Quoting Lumberton (Thread starter):
Talks about a possible "carry over" to A350 orders.
might be a good selling point for the A350, but now it seems that future A350 profits are going to become cannabalized..that being said, I still think QF will go for the 777's and 787's....
Actually, I was trying to make the point that it could have adverse consequences for A350 sales--especially to the likes of QF & SQ. Note the actual text from the article:
"Two months after Airbus was forced to concede its A380 program was running way behind schedule, Mr Leahy admitted the fiasco could affect the Toulouse aircraft maker's promotion of its yet to be built A350.
"I would like to believe not - but people are people," he said."
This is a remarkably candid admission from an individual who generally manages to put things in their best light.
Cheers.
"When all is said and done, more will be said than done".
Gigneil From United States of America, joined Nov 2002, 16215 posts, RR: 89 Reply 13, posted (7 years 9 months 1 week 4 days 23 hours ago) and read 9187 times:
Quoting Beauing (Reply 8): Given Airbus' net profit was $586.4 million for the last year, $100 million is significant, given that other airlines may seek similar damages.
I would absolutely love to see your source for that number.
You can also go to Google News and use EADS net as the search term;
Airbus jets power rise in EADS net profit
eTaiwan News, Taiwan - Jul 27, 2005
EADS said net profit rose to 488 million euros (US$585 million) in the April-June quarter from 332 million euros in the year-earlier period. ...
Boeing, EADS Post Sales Gains, Raise Profit Forecasts (Update2) ...
Bloomberg - Jul 27, 2005
... EADS net income rose to 488 million euros ($586 million), or 61 cents a share, from 332 million euros, or 41 cents, a year earlier. ...
EADS and Boeing both ramp up forecasts
International Herald Tribune, France - Jul 27, 2005
... Before Wednesday, they had increased 28 percent since December. EADS net income rose to €488 million from €332 million a year earlier. ...
Eatmybologna From France, joined Apr 2005, 412 posts, RR: 0 Reply 15, posted (7 years 9 months 1 week 4 days 23 hours ago) and read 9069 times:
Quoting PlaneDane (Reply 9): Besides, the apology Leahy offers comes too little, too late and sadly follows comments made by Airbus that should never have been made.
Quoting N79969 (Reply 7): If Airbus is smart, they will not make any further statements that place blame on customers.
To what comments are you referring? I completely missed reading anything negative from A except a two month lack of admission to any delays.
Thanks,
e-m-b
Isn't knowledge more than just the acquisition of information? Shouldn't the acquired information be correct?
Zvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 66 Reply 16, posted (7 years 9 months 1 week 4 days 23 hours ago) and read 9042 times:
Quoting Sphealey (Reply 11): If the 380 succeeds, it will have a product lifetime of at least 30 years.
Succeeds at what??? If the new Adv JumboJet has significantly (at least 2-3%) lower CASM than the WhaleJet, then most WhaleJets may be retired by 2015. Remember the MD-11? Time will tell.
Jacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 61 Reply 17, posted (7 years 9 months 1 week 4 days 23 hours ago) and read 8973 times:
Quoting Lumberton (Reply 13): ctually, I was trying to make the point that it could have adverse consequences for A350 sales--especially to the likes of QF & SQ. Note the actual text from the article:
"Two months after Airbus was forced to concede its A380 program was running way behind schedule, Mr Leahy admitted the fiasco could affect the Toulouse aircraft maker's promotion of its yet to be built A350.
"I would like to believe not - but people are people," he said."
This is a remarkably candid admission from an individual who generally manages to put things in their best light.
Cheers.
Maersk737 From Denmark, joined Feb 2004, 632 posts, RR: 1 Reply 18, posted (7 years 9 months 1 week 4 days 23 hours ago) and read 8969 times:
I
Quoting Zvezda (Reply 17): Succeeds at what??? If the new Adv JumboJet has significantly (at least 2-3%) lower CASM than the WhaleJet, then most WhaleJets may be retired by 2015. Remember the MD-11? Time will tell.
Why do we have to remember the MD 11?
If the A350 has significantly lower CASM than the nightmareliner (787), then most nightmareliners will be retired by 2017. Time will tell.
I know this is a bullshit statement, but I couldn't resist
If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.
you are correct in your assesment...but you are making the assumption that the A380 will sell enough frames..and that's what I don't think will happen
I think that Sphealey was writing from the point of the customer. For a customer, it doesn't matter how many frames the A380 will sell. If I buy 20 frames, what matters to me is that they will last 30 years.
Dutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 58 Reply 20, posted (7 years 9 months 1 week 4 days 22 hours ago) and read 8880 times:
Airlines like QF, SQ and EK are going to want much more than an apology from Airbus concerning the A380 - while much of what reported in the media is one-sided and the airlines are doing what they can to make the delay seem like the end of the world - there is no doubt that both SQ and QF are more than a little upset with Airbus and the delays in the A380 program. Media leaks such as the subject article, and the recently posted article/thread about SQ's reaction to the delay, are a bit out of the norm.
$100 million in damages seems like a lot of money to me for a 6-8 month delay but it all depends on what the purchase agreements say. There were rumors that QF got an amazing deal (and good deals are more than sharp prices) on its A380/A330 purchase, so it could be possible. If SQ and EK have similiar provisions in their A380 contracts with Airbus, the delays are going to get very expensive for Airbus - the number of A380s that must be sold for the program to breakeven just went up by a couple of dozen if all of this is true.
While Airbus must look ahead to the A350 to keep the momentum for that program moving, Airbus really should be concentrating its efforts in getting the A380 program back on track.......at this moment, I do not think that Airbus offering A350s at bargain prices to A380 customers is a practical solution to this situation.
PHXinterrupted From United States of America, joined Apr 2002, 474 posts, RR: 0 Reply 21, posted (7 years 9 months 1 week 4 days 22 hours ago) and read 8817 times:
Quoting Maersk737 (Reply 19): If the A350 has significantly lower CASM than the nightmareliner (787), then most nightmareliners will be retired by 2017. Time will tell.
Spoken like a true Airbus fan/European. Good one, pal.
RedChili From Norway, joined Jul 2005, 2053 posts, RR: 2 Reply 23, posted (7 years 9 months 1 week 4 days 22 hours ago) and read 8703 times:
Quoting Dutchjet (Reply 21): If SQ and EK have similiar provisions in their A380 contracts with Airbus, the delays are going to get very expensive for Airbus - the number of A380s that must be sold for the program to breakeven just went up by a couple of dozen if all of this is true.
Ehhh? $100 million is approximately the cost of one third of an A380 at list prices. If they have to pay SQ and EK similar fees, I don't see how this will raise the bar with a couple of dozen frames.
Areopagus From United States of America, joined Sep 2001, 1356 posts, RR: 1 Reply 24, posted (7 years 9 months 1 week 4 days 22 hours ago) and read 8588 times:
Quoting Beauing (Reply 15): eTaiwan News, Taiwan - Jul 27, 2005
EADS said net profit rose to 488 million euros (US$585 million) in the April-June quarter from 332 million euros in the year-earlier period.
So the 488 million Euro figure is for quarterly profits, not yearly.
25 B777fan: Beauing, Not that $100 million isn't a lot of money but, the net profit figure you quote is for a single quarter, not a year. The comparison is to the
26 Mariner: I think this is great, and interesting that it is Mr. Leahy who is making the public apology. I assume there have been other, private apologies, by ot
27 Lightsaber: True! And look at the sales forecasts. Sales aren't really expected to get "traction" until 2011 for the whalejet. Good point. However, "once bitten,
28 Cruiser: Yes and no. Both of these guys pay the lawyers, so if they come back with not enough, then both of these men have the power to tell them (the lawyers
29 Leskova: ... and, if I'm reading it correctly, it's for EADS, not Airbus. Regards, Frank
30 Jacobin777: could be...not arguing..but it still doesn't help EADS/Airbus.. well..it depends if its EBITDA or not..regardles....that still going to be a large hi
32 Mariner: Well - what is? We don't know what the figure is, yet. WE may never know. I don't wish to downplay the seriousness of it, and I'm sure Qantas will ge
33 Beauing: http://www.theaustralian.news.com.au.../0,5744,16229821%255E23349,00.html "...quite honestly we didn't keep up with all the work that was involved in
34 Jacobin777: "Mr Leahy would also be discussing the "relatively significant penalties" that it will now pay Qantas for the delay. "It's in the contract and it's n
35 Mariner: Yes. I still don't know the actual firgure. I am sure it is, and I am sure Airbus/EADS would prefer not to have to pay it. I still don't know the act
36 Ken777: If the rumors are true and Airbus actually "put their money where their mouth is" in the agreements then the checks (cheques) should be in the mail no
37 Glideslope: Then they had better keep a tight leash on Mr. Leahy. I'm sure Qantas is "pounding on the table" over their excitement in the 380. Airbus should dump
38 Atmx2000: If CASMs were all that mattered, all air travel would be done on 747s for the last 40 years. Trip costs do matter because you can't fill a larger pla
39 Jet-lagged: You mean actual cash payments? That would be very surprising. If Airbus were smart, they would have negotiated penalties being paid on discounted spa
40 Braybuddy: What's all the fuss about? How many new aircraft have been delivered to the first customer on time? Sounds like posturing and discount-seeking to me.
41 Sphealey: >> you are correct in your assesment...but you are making >> the assumption that the A380 will sell enough frames..and >> that's what I don't think wi
42 Jacobin777: fair enough..i'm clueless on Netherlands tax laws... hmm...i can't seem to recall stating a comment which says otherwise.. how many people will..but
43 MidnightMike: Airbus is not going to write a check for $100 million, sheesh. The penalty would probably be spread over the number of aircraft orders, and may not e
44 Mariner: A crude estimate? Even if I accepted the high estimate of $100 million, it is reported in an Australian newspaper about an Australian corporation. So
45 MasseyBrown: It also matters which country's laws govern contract disputes. In the US, if the contract didn't specify a method for determining the penalty, the ai
46 NAV20: The delays must be causing dreadful problems for the accountants. As things stand at present, the customers don't even know for certain which financia
47 Mariner: I would think Mr. Leahy has given them a fairly good idea: http://au.biz.yahoo.com/050811/17/78y1.html cheers mariner
48 Jetfuel: Lets hope it's not another MD-11 and that all the performance expectations are met
49 Boogyjay: Well it might be "not an insignificant sum". But if it were not, he would still publicly say that they consider it's a lot of money, and that they ta
50 Astuteman: I suspect the discussions/negotiations will be an awful lot more complex than that - Airbus would clearly and probably explicitly not want that to ha
51 N79969: "What's all the fuss about? How many new aircraft have been delivered to the first customer on time? Sounds like posturing and discount-seeking to me.
52 Burnsie28: Just a little bit more of a delay, and even the 787 will beat this thing into service
53 NYC777: True they probably would use the $100mm as a credit against other Airbus products and services but it would still have to be a charge against the A38
54 BoogyJay: Wait and see. Don’t count your chickens before they're hatched.
55 Ikramerica: As long as it delivers on what it promises in terms of in service performance, the delays of the initial A380 will be long forgotten in a few years b
56 Jacobin777: I never specified to what degree "crude" was in the first place..maybe your definition of "cruder" is my definition of "crude"....... usually, unless
57 Mariner: Um - I think I said - or certainly I tried to indicate - that the "crude estimate" I was using was the $100 million figure. As in: Perhaps my meaning
59 Jet-lagged: However . . . I highly doubt that Qantas would accept penalties getting paid with new aircraft purchases. Here is the logic: "If we Airbus screw up o
60 Mariner: So - $6 million compo for SQ against $100 million for QF?: http://news.xinhuanet.com/english/2005-08/16/content_3363779.htm Something is out of whack
61 Maersk737: Is $6 million a substantial figure? And will it bring Airbus down? Well, we will have to wait for the next episode of Soap Cheers Peter
62 ClassicLover: It depends on the deals in the original contracts, that's why there could be a difference. It could also refer to lump sum payments, as opposed to dis
63 SparkingWave: Oh well. It just seems logical that the biggest passenger jet airplane in the world should also beget the biggest delivery delay in the world. Actuall
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