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Leahy: A380 Already Close To Breakeven  
User currently offlineJoni From , joined Dec 1969, posts, RR:
Posted (8 years 11 months 1 week 6 days 14 hours ago) and read 9814 times:

http://news.bbc.co.uk/2/hi/business/4433030.stm

According to Leahy, the A380 is effectively near the 250-unit breakeven point since customers are holding around 100 options that they're not letting go - and therefore assumedly likely to firm up at some point. (This is well in-line with the rumours that the A380 will exceed its performance targets, discussed in another thread, since that would also make it far more likely options would be firmed)

He also discusses the delay compensation, fingering it at a "couple of million" USD.

Nice to see that both A and B appear to be doing so well nowadays.

108 replies: All unread, showing first 25:
 
User currently offlineArt From United Kingdom, joined Feb 2005, 3382 posts, RR: 1
Reply 1, posted (8 years 11 months 1 week 6 days 14 hours ago) and read 9656 times:

"Mr Leahy also told reporters that the firm was now close to selling 250 of the superjumbos - the number the company needs to sell to break even on its investment. "

How close is close: 1 year away, 2 years away, 3... ? The 250 breakeven number: did JL say this or did the journalist look up "old" breakeven numbers? I thought Airbus had conceded it would be higher than 250, due to extra dev costs.


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 984 posts, RR: 51
Reply 2, posted (8 years 11 months 1 week 6 days 13 hours ago) and read 9599 times:

Quoting Art (Reply 1):
How close is close: 1 year away, 2 years away, 3... ? The 250 breakeven number: did JL say this or did the journalist look up "old" breakeven numbers? I thought Airbus had conceded it would be higher than 250, due to extra dev costs.

I also thought the break-even was higher than 250 frames. There was a period of media confusion regarding the A380 break-even because it seemed Leahy, Foregard, and Airbus divisions were all quoting different figures. A conservative number for now seems like 300-350.

In any event, Airbus won't break-even until "X" number of A388 are delivered. That will be some time from now, though Airbus could secure the backlog for the necessary break-even point in the near term.


User currently offlineJoni From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 11 months 1 week 6 days 13 hours ago) and read 9579 times:

From the article it appears that the journalist looked it up. Anyhow from the point-of-view of the statement that is doesn't matter much if the breakeven number is 250 or 280.

WRT the years, I think that by "close" he meant that the orders and options count is nearing the breakeven point (and that it looked likely the options _would_ be firmed up) and not referring to when the options would be firmed up.


User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 4, posted (8 years 11 months 1 week 6 days 11 hours ago) and read 9331 times:

IMO, Breakeven Analysis is best used for pricing products, it's far too crude a yardstick to meaningfully measure/evaluate the financial performance of a long-term project because it doesn't take into account the time value of money. Airbus and Boeing like to use it for P.R. purposes because it's easier to understand than other measures of financial performance like I.R.R., etc. Additionally, there's added significance for Airbus because IIRC, Airbus uses Breakeven Point as a triggering event for the repayment of launch aid and the payment of royalties to risk sharing creditors.

On a related note, I've seen production capacity quoted anywhere from 44-50 units per year; IIRC, prior to the announcement of the program delay, capability of reaching full capacity was anticipated by early 2008. If what Mr. Leahy says is true and 5+ years of delivery slots are essentially spoken for already, I'd think Airbus would be looking at increasing capacity instead of having Mr. Champion proclaim that new customers will have to wait at least six years for delivery.

[Edited 2005-11-13 20:44:36]

User currently offlineFCKC From France, joined Nov 2004, 2348 posts, RR: 4
Reply 5, posted (8 years 11 months 1 week 6 days 10 hours ago) and read 9197 times:

Never mind if the breakeven number is 250 or 350 , they will sell far more these numbers.

User currently offlineJoni From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 11 months 1 week 6 days 9 hours ago) and read 9046 times:

Quoting Leelaw (Reply 5):
I'd think Airbus would be looking at increasing capacity instead of having Mr. Champion proclaim that new customers will have to wait at least six years for delivery.

I have no inside info, but since it looks like the production slots really are effectively sold out for the next 5 years, you can bet that Airbus is looking at increasing the production rate. Making noises about the state of sold-out production is good for extracting higher prices for the A380s that they sell next, whereas actually increasing the production capacity costs a lot of money.

[Edited 2005-11-13 22:15:08]

User currently offlineGlideslope From United States of America, joined May 2004, 1620 posts, RR: 0
Reply 7, posted (8 years 11 months 1 week 6 days 7 hours ago) and read 8874 times:

ROFLMAO. Mr. Leahy is full of it up to his ears. The break even on the Whale Jet is close to 350 frames by now.

Show us some numbers John? You can't expect anyone to actually believe you, can you? Look at your record over the last 2 years?

More desperate Airbus PR as 07-Jan is looking like the earliest revenue service for the Whale.  

[Edited 2005-11-14 00:13:14]


To know your Enemy, you must become your Enemy.” Sun Tzu
User currently offlineAbba From Denmark, joined Jun 2005, 1372 posts, RR: 2
Reply 8, posted (8 years 11 months 1 week 6 days 4 hours ago) and read 8691 times:

Quoting Glideslope (Reply 8):
ROFLMAO. Mr. Leahy is full of it up to his ears. The break even on the Whale Jet is close to 350 frames by now.

Show us some numbers John? You can't expect anyone to actually believe you, can you? Look at your record over the last 2 years?

With all respect Sir! Airbus is claiming that about 250 are the break even. If you want to be the one to claim this as plain wrong I find that you should be the one to provide the numbers necessary for proving this. I expect that such argument also include the real cost of production of the aircraft for Airbus which I believe is kept at as a deep secret in Toulouse. In other words: If you do not have substantial data to prove otherwise, I and a few more will feel free to trust what Airbus says knowing of cause that numbers can be calculated in many different ways.


Abba


User currently offlineNWA742 From , joined Dec 1969, posts, RR:
Reply 9, posted (8 years 11 months 1 week 6 days 4 hours ago) and read 8673 times:

Quoting Abba (Reply 9):
With all respect Sir! Airbus is claiming that about 250 are the break even.

Right, and they also claimed that there was no market or need for the 787 program. Now they're full force on the A350 project.

They claim their products are superior, so does Boeing. This is nothing more than PR bullshit. And from Leahy, no doubt.

Quoting Abba (Reply 9):
If you want to be the one to claim this as plain wrong I find that you should be the one to provide the numbers necessary for proving this.

Nonsense. That's not how it works, buddy.

Unless Leahy proves his comments correct, with hardcore numbers and facts, than Glideslope has every right to call him out on it and assume he's wrong.




-NWA742


User currently offlineLehpron From United States of America, joined Jul 2001, 7028 posts, RR: 21
Reply 10, posted (8 years 11 months 1 week 6 days 3 hours ago) and read 8486 times:

Does the break-even value depend on the fluctuation of the world economy or even how world currency is evaluated?

If the cost relative to a constant went up, then so would the number required to break-even; until the variable drops. Right now, the US Dollar to Euro ratio is greater than 1, wasn't that why the break-even rose when it did?



The meaning of life is curiosity; we were put on this planet to explore opportunities.
User currently offlineN908AW From United States of America, joined Aug 2005, 938 posts, RR: 1
Reply 11, posted (8 years 11 months 1 week 6 days 3 hours ago) and read 8448 times:

Let's put it this way guys. The Airbus A380 is closer to breakeven now than it ever has been.


'Cause you're on ATA again, and on ATA, you're on vacation!
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 12, posted (8 years 11 months 1 week 6 days 3 hours ago) and read 8394 times:

Quoting Abba (Reply 9):
numbers can be calculated in many different ways.

The short answer to the question, "What is the A380's breakeven point?" is that no-one knows. Because it depends on the prices that are achieved for future sales. If you assumed:-

1. That all future sales will be at full list price ($US292M.) or better;
2. That those sales are all achieved within the next year;
3. That production rates can be increased so that 250-300 aircraft, instead of the likely 150, can be built and delivered over the next six years;

By assuming high prices and early sales, you could possibly produce a calculation that showed something like break-even, in terms of recouping development and build costs plus accrued interest. But, at the present moment, it wouldn't be worth the paper it was written on.

The only thing we can be certain of is that the programme is nowhere near the breakeven point yet. And that, given the low launch prices, the delivery delays, the mounting compensation bills, the stalled sales, and the likely low production rate, any such point remains a long way off at the present time.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineIkramerica From United States of America, joined May 2005, 21544 posts, RR: 59
Reply 13, posted (8 years 11 months 1 week 6 days 2 hours ago) and read 8193 times:

Quoting N908AW (Reply 12):
Let's put it this way guys. The Airbus A380 is closer to breakeven now than it ever has been.

Very true. I would hope so, as going backward is never good.

Wonder how many options will be converted at Dubai?



Of all the things to worry about... the Wookie has no pants.
User currently offlineBoeing767-300 From Australia, joined Sep 2001, 660 posts, RR: 0
Reply 14, posted (8 years 11 months 1 week 6 days 2 hours ago) and read 7989 times:

Wow.. this is an interesting topic. There are the usual posters here who are so quick to swallow any bu***hit that Leahy tells anyone.

There are also people who believe that the A380 won't be 'quite' as good as expected for a number of reasons but then that's creates an enviroment for healthy debate.

So before falling prematurely into either of the above a few basic financial questions of the project need to be asked.

How much investment required to launch A380 (15 Billion Euros - approx?)

How many aircraft to break even = 250

15 000 000 000 dived by 250 A380s = 60,000 000.

That's 60 Million per Aircraft.

The next big question is how much did the launch customers have to pay given the Airbus desperation to lauch the project in 2000.

I don't have the answers but you can be sure Singapore and Qantas paid nothing like full price for their copies and Emirates with an order for 43, what do you realistically think they paid? You can surely bet they didn't make ANYTHING on the first 50 or so copies!!

The big unknown is what is actually costs to produce a copy given the sheer size of the whalejet. There are huge transportation issues which large chunks coming from all over Europe, barging, trucking and associated road closures. These all take time and money and add to the cost of the project.

What price have EK SQ and QF got their options locked in at - the same as their original purchase - if so then if will be even harder to reach the break even point. If anybody has any figures please post them as this would assist in this debate. There were plenty of rumoured figures at the time.

I believe the current lack of sales in A380(744 outsold A380 in 2005) is because current customers Leahy is trying hard to aquire are being asked to pay a price that reflects all of the above. Given recent issues over weight, performance, engines, delays Airlines are waiting to see if A380 is worth the money being asked. Some or most of the launch customers were quite frankly offered the A380 at a price they could not refuse.

Most of the dribble that comes out of Leahys mouth is sales bu***hit that is cleverly designed to created value by inferring lack of supply. If this was not true then you would still see many Airlines that are currently holding back signing up.

I don't like Leahy but he is clever at what he does.

We don't need to respond to Dreamliner it is just a Chinese Copy of A330.

We can beat 787 by attaching the same Engines.

We have spent the last 12 months redesigning and redesigning again the A350 which is the response we did not need to compete with 787


Honestly I am tiring of Leahy's b/s


User currently offlineAbba From Denmark, joined Jun 2005, 1372 posts, RR: 2
Reply 15, posted (8 years 11 months 1 week 6 days 1 hour ago) and read 7936 times:

Quoting Boeing767-300 (Reply 15):
Honestly I am tiring of Leahy's b/s

You ask some good questions (differnetly from some of the others above). I just wonder if you apreasiate Leahy's opposite in Boeing more?

Abba


User currently offlineManni From South Korea, joined Nov 2001, 4221 posts, RR: 23
Reply 16, posted (8 years 11 months 1 week 6 days 1 hour ago) and read 7891 times:

Quoting Boeing767-300 (Reply 15):
Some or most of the launch customers were quite frankly offered the A380 at a price they could not refuse.



Quoting Boeing767-300 (Reply 15):
If anybody has any figures please post them as this would assist in this debate



Quoting NWA742 (Reply 10):
You can surely bet they didn't make ANYTHING on the first 50 or so copies!!

Yet, any figures are missing. Speculation on your behalf, or can you provide the missing figures?

Quoting Boeing767-300 (Reply 15):
I believe the current lack of sales in A380(744 outsold A380 in 2005) is because current customers Leahy is trying hard to aquire are being asked to pay a price that reflects all of the above

Nothing unussual. Boeing sold 2 777's in the year preceeding the first revenue flight of the 777. And these were for ANA, who already placed orders at an earlier date, so no new customers the year preceeding the launch of the 777 in revenue service. This reflects that after the launch customers, airlines take a 'wait and see' approach towards new airliners. Expect a cascade of orders after the first few months the A380 is in revenue and performs as promised.



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User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 17, posted (8 years 11 months 1 week 6 days 1 hour ago) and read 7836 times:

Quoting Boeing767-300 (Reply 15):
How much investment required to launch A380 (15 Billion Euros - approx?)

One correction there, Boeing767-300 - it's usually estimated at $US15B. - say about E12B.

In orthodox project analysis terms, interest should be applied to the outstanding balance until it is recouped. Therefore the 'historic cost' will mount at something over E1B. p.a. until net inward project cash flow turns positive and begins to reduce it.

In addition, one-third of the development cost came in the form of 'launch aid', which (according to the 1992 Agreement rules, anyway) will have to be repaid in the form of royalties on sales, or in any event within 17 years of the commencement of the programme. Short-term, the royalties will be a further drain on profits; longterm, unless fully repaid by way of royalties, the balance of the launch aid will represent a large future capital commitment which will have to be provided for in some way.

[Edited 2005-11-14 06:30:15]


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineCoa747 From , joined Dec 1969, posts, RR:
Reply 18, posted (8 years 11 months 1 week 6 days 1 hour ago) and read 7816 times:

I think that new order will be slower in coming. Airlines want to see the A380 in service and watch Qantas and Singapore work out all the bugs before they make up their mind. Options turned into orders from the original lanch customers are likely to be the first new orders before any new A380 customer commits. The 747 Adv when launched will put a dent in A380 sales. How much remains to be seen. But the Boeing product doesn't have to take away too many sales to make an impact. By the way do the current order totals for the A380 include both the passenger and freighter variant? My estimation is that it will take 10 years before Airbus starts to turn a profit on the A380 and it may not be much to get excited about. It depends on building a family of aircraft that can let the A380 grow and advance like the 747 line did. The 747-100 wasn't a big money maker for Boeing but successive advanced models like the 200 and 200B was where Boeing started to cash in and orders went through the roof. Does the A380 have staying power that is the real question. We won't know that for some time yet.

User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 19, posted (8 years 11 months 1 week 6 days 1 hour ago) and read 7733 times:

Quoting Coa747 (Reply 19):
By the way do the current order totals for the A380 include both the passenger and freighter variant?

I believe that 17 of the current orders total relate to the freight version - which has yet to be fully-designed, tested, and certified.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineAntares From Australia, joined Jun 2004, 1402 posts, RR: 39
Reply 20, posted (8 years 11 months 1 week 6 days 1 hour ago) and read 7648 times:

NAV20,

Your supposed to be out there with an antique fire arm shooting the damn thing down last we corresponded on this, not sitting in front of a computer.

Yours from another antique

Antares


User currently offlinePtcflyer From United States of America, joined Apr 2001, 103 posts, RR: 0
Reply 21, posted (8 years 11 months 1 week 6 days ago) and read 7425 times:

Don't ever forget: Revenue is a fact. Profitability is an opinion! No one knows for sure what "rationalizations" exist in various executive statements about breakeven, profitability, payback, development cost recovery, etc.

How firm are those orders really? Is the pricing offered to the initial carriers rational -- factoring in development/manufacturing/all fixed/variable costs? What are the true risks to the airline operators, Airbus's manufacturing capabilities, the plane's operational performance? How does one anticipate probable threats to large-scale passenger growth requiring the A380 (Bird-flu, terrorism, oil prices, economic, geopolitical challenges) that may delay the delivery of those 200 + copies. With all of these threats and a year away from first delivery.. it is so hard to determine what the appropriate number of airfames is required for the program to truly be profitable.


User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10106 posts, RR: 97
Reply 22, posted (8 years 11 months 1 week 5 days 22 hours ago) and read 7129 times:
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Quoting Boeing767-300 (Reply 15):
How much investment required to launch A380 (15 Billion Euros - approx?)



Quoting NAV20 (Reply 18):
One correction there, Boeing767-300 - it's usually estimated at $US15B. - say about E12B.

As usual we're throwing some of the conspiracy theory numbers around. "It's usually estimated at".. by you?

The correct figures for the A388 + A38F are:-
$12.6Bn in total (dollars, you'll note)
$9.5Bn provided by Airbus, of which $3Bn is repayable launch aid.
$3.1 Bn provided by risk sharing partners (therefore nothing to do with Airbus)

Quoting NAV20 (Reply 18):
interest should be applied to the outstanding balance until it is recouped. Therefore the 'historic cost' will mount at something over E1B. p.a.

Once again, the correct figures are:-
Outstanding debt for the A380 is $3Bn govt loans at average 4.25% and E1Bn (say $1.25Bn) Eurobonds at 4.75%. The rest came from cash.
The ANNUAL interest charge IS $180m (dollars, you'll note..)

Quoting Boeing767-300 (Reply 15):
The big unknown is what is actually costs to produce a copy given the sheer size of the whalejet. There are huge transportation issues which large chunks coming from all over Europe, barging, trucking and associated road closures. These all take time and money and add to the cost of the project.

Once again, the correct figure is:-
These huge transportation costs amunt to the grand total of 0.015% per frame - disastrous!  Smile
The production cost might not be as unknown as you think  Wink

Quoting Boeing767-300 (Reply 15):
You can surely bet they didn't make ANYTHING on the first 50 or so copies!!

YOU can be sure that whtever you say is probably wrong. Feel free to enjoy your conspiracy theory.
Whatever they make on the 1st 50 frames, large launch discounts are normal, discounts are normal.
"You can be sure" they were factored into the project beak-even analysis.

Quoting Boeing767-300 (Reply 15):
Most of the dribble that comes out of Leahys mouth is sales bu***hit



Quoting Boeing767-300 (Reply 15):
Honestly I am tiring of Leahy's b/s

Won't be long before we'll be quoting the same about you, will it?  Wink


User currently onlineScorpio From Belgium, joined Oct 2001, 5037 posts, RR: 44
Reply 23, posted (8 years 11 months 1 week 5 days 22 hours ago) and read 7082 times:

Quoting Glideslope (Reply 8):
The break even on the Whale Jet is close to 350 frames by now.

Source, or are you talking out of your backside, as usual?

Quoting Glideslope (Reply 8):
Show us some numbers John?

Why don't you show some too?

Quoting Glideslope (Reply 8):
You can't expect anyone to actually believe you, can you?

But you do expect us to take YOU serious, right?

Quoting Glideslope (Reply 8):
Look at your record over the last 2 years?

Let's look at yours over the last month: 2nd A380 won't fly until December at the earliest, Aeroflot only will only pay $70 million for A350 (with NO sources or anything at all to back it up), etc.

Lesson: you are the LAST person to be telling anybody they have no cerdibilty...

Quoting NWA742 (Reply 10):
Right, and they also claimed that there was no market or need for the 787 program.

Where did they ever claim that? They had been IN that market for years themselves...

Quoting Boeing767-300 (Reply 15):
We don't need to respond to Dreamliner it is just a Chinese Copy of A330.

We can beat 787 by attaching the same Engines.

We have spent the last 12 months redesigning and redesigning again the A350 which is the response we did not need to compete with 787

That's PR. Boeing does the same thing.


User currently offlineBill142 From Australia, joined Aug 2004, 8458 posts, RR: 8
Reply 24, posted (8 years 11 months 1 week 5 days 20 hours ago) and read 6876 times:

Quoting Boeing767-300 (Reply 15):
We don't need to respond to Dreamliner it is just a Chinese Copy of A330

I think you'll find that was a Foregard comment and not one from Leahy


25 Jet-lagged : IMHO, Mr. Leahy is making such a statement based on: - simple breakeven, and not a more relevant positive ROI factoring time value of money - options
26 Post contains images Astuteman : "Simple breakeven" - I'm certain you are correct on that one (in fact I've seen it documented somewhere, but blowed if I can find it.). There's no wa
27 Jet-lagged : You are right. But we are talking communications to public, not internal financial models. And in the article he reiterated US$285million. So, I gues
28 Post contains images Boeing767-300 : Well then if you are so 'astute' (sorry couldn't help the pun) then with an extremely informative tiny fraction amounting to less than a tenth of one
29 Joni : The reason it will break-even at lower unit sales is that since it's a bigger widebody plane, the margins are larger as they tend to be. This effect
30 Post contains images NAV20 : 'Er - bit of a stuffup there, old boy' - of the sort beloved of Commonwealth armies. I was on my break. The duty troop 'spotted and plotted' it, but
31 Post contains images Astuteman : Pardon my slip, Boeing767-300 - it should have been 0.15% of frame cost. Can you enlighten yourself as to the actual cost with that information. I th
32 PM : "We are essentially there now. We have 159 firm orders and I have got about 100 options that are blocking delivery slots, most of them over the next f
33 Sabenapilot : NO they don't! Boeing generally sticks to the first kind of statements for well over 5 years (767 vs A330) and then makes a pathetic attempt to pull
34 Art : Indeed. If delivery slots could be reserved cheaply, this would be one way to go with a new aircraft: wait and see if it works; when that is clear, r
35 Trex8 : nah, they saw what happened to Boeing in 97, why takes charges of several billion to ramp up production and lose money making products! besides it ke
36 Scorpio : "The Airbus will be like any other European plane: they'll build a few dozen and disappear." "There is no market for the A320." I repeat: Boeing does
37 Shenzhen : One would think that at least ONE would need to be delivered before bragging about break even. Airbus has a long way to go before delivering one, let
38 MrComet : No need to prove it. Airbus quoted a breakeven of 250 aircraft in 2001 when it was a $10 billion project. Now it is $15 billion and counting. Airbus
39 Ruscoe : My interpretation is that Leahy is saying: "Cripes, I've got airlines with options who might by the plane blocking production slots I could sell to ai
40 WAH64D : Same old drivel Glideslope. You really are one seriously boring poster here on a.net Straight from the brain of Glideslope? Revenue service doesn't m
41 Post contains images JetMaster : Says who? You? Wait - didn't you predict many other "things" as well? Regards, JM
42 Jet-lagged : There are no physical laws of the universe that guarantee such a thing. When they calculate ROI - or whatever - for the shareholders - I agree with y
43 NAV20 : Have to comment on that point, Astuteman. The 'cash ' concerned was shareholders' funds, which would otherwise have been distributed as profits. They
44 N79969 : Break even is not a static figure. They would have to achieve 250 sales by a certain date to breakeven. Because of interest rates, the profitability o
45 Post contains images Boeing767-300 : N79969... I could not have put it better myself!!
46 Post contains images Sabenapilot : Well, you do know that almost all legendary best selling musicians like the Beatles or the Stones never took any lessons as such, but learned to play
47 Sebolino : I wonder why all Americans (nearly) in this forum are so angry or at the minimum disdainful (engl. word ?) towards Leahy when he does his job of PR. I
48 Stitch : While I am sure Airbus sold the first set of A380s - and especially the huge EK order - at a significant discount, I don't know why people assume tha
49 A319XFW : Let's look at it how it is, John Leahy is a salesman and a good one at that. I think this year he was off ill for a few weeks and Airbus sales were vi
50 NWA742 : Scorpio, I'm not really concerned with looking up Leahy's press announcements, speeches, and/or meetings......but you know as well as I do, that Airb
51 PlaneDane : Yes, Leahy is a good salesman. I think, however, that it is time for him to move on. What I mean is that back when Airbus was that scrappy underdog c
52 N79969 : I think it is also notable that Leahy is making this claim in the midst of a sales campaign and not Humbert or Foergard during an interview. I think t
53 Columbia107 : I can only put it down to Leahy's gift of the gab.......... No but the wind is changing..........
54 Scorpio : They discredited it (as one would expect - they're the competitor) in the sense that they claimed an A330 with new engines could effectively compete
55 Unicorn : Might I make a few points to both the rabid Airbush bashers AND the rabid Boeing bashers. Yes, you can find John Leahey's style abrasive (I personally
56 Gigneil : This is exactly what I read, too. N
57 RedChili : If you really believe that Airbus only started to believe in point-to-point after Boeing received a lot of 787 orders, then you know very little abou
58 Post contains images A319XFW :
59 N79969 : It is not a matter of totally rejecting one model in favor of another. Rather it is a question of where do you invest the bulk of your resources. Air
60 Scorpio : True, but keep in mind that, at the time Airbus decided to build A380, they had no need to invest large amounts of money in a point-to-point aircraft
61 N79969 : Scorpio, Your point is also correct. But let me add that the B777 family is also a key part of the point-to-point concept. They put their resources in
62 RedChili : And now that the 787 started to slaughter Airbus in the market, Airbus had more or less finished the development of the A380. So now, Airbus can turn
63 Post contains images BlueSky1976 : All Boeing fans (especially NAV20 & like) READ THIS!!!! Something I've been saying all along   Unicorn - welcome to my RU list  [Edited 2005-11-14
64 Dougloid : All of which leads me to believe that there may be people speculating in production slots on the A380. Canadair did the same thing and it had the sam
65 Abba : Another thing that might also play a role here is that the 380 is still very young and there might be many ways the plane itself as well as its produ
66 Post contains images Astuteman : Conspiracy theory numbers YET AGAIN! For your information, the projected cost has grown from $10.5Bn to $12.5Bn - a 20% growth. To be fair, though, E
67 RedFlyer : Or Chirac...as another example.
68 Post contains links NWA742 : Perhaps I should've clarified myself more, Scorpio. Airbus never said there was no market for the 787-sized airplane, however, they made it clear tha
69 Post contains links AV757 : Eclosed you will find this article by the BBC where Chief Operating Officer John Leahy of Airbus admits that it will cost the company some millions du
70 Post contains images BoomBoom : Airbus shot their wad on a niche market aircraft. Boeing blew their load on a mass market aircraft. Who made the better business decision?[Edited 200
71 Abba : I think that there is a line of income that you seem to completely forget. Once the 380 is being delivered it will generate a continuous cash flow in
72 BoomBoom : How much did Boeing spend developing this derivative? They didn't blow $15 billion developing on it.[Edited 2005-11-15 07:29:33]
73 RedChili : My understanding of what Airbus was saying at that time was that they got a little bit cocky about the A330, and they believed that the Boeing 7E7 wo
74 Post contains images Astuteman : What's the relevance of that? Who spent $15Bn developing an aircraft? Airbus didn't If it does ever achieve a break-even in terms of discounted cash
75 Atmx2000 : Well, they needed a large number of orders early to justify a large project. 777LR development costs for both the 772LR and 773ER is thought to somew
76 Abba : I think that you see something similar with printers these days. Looking at the prices you have to pay for the machine, the manufacturers can't possi
77 Astuteman : That surprises me Atmx. Is there a source other than "thought"? (genuine question, here..) I understood the A345/6 development was in the region of $
78 Thorben : I also read the number of $3 billion. But that is from sources from before the program started. I think the early wing trouble and the HGW version ha
79 Art : And Airbus have a stake in a mass market with the A350. And Boeing have a stake in a niche market with the 747-8. They have both covered mass and nic
80 NAV20 : Agree, Abba - any positive cash flow connected with the project should (and would, if I was doing the analysis) be counted in against expenditure. Bu
81 Art : Out of curiosity, where/who would it come from? Does SQ pay before the aircraft is delivered to them?
82 NAV20 : I'm assuming that, once aircraft are under construction, the customers concerned have to make progress payments based on 'added-value', Art. That's a
83 Abba : No we are not but it does pay an important role when you are considering how many planes to sell before break even (whatever that might mean). The pr
84 NAV20 : I used to plan, organise, and monitor capital projects for a living, Abba. Not aeroplanes, buildings - but since quite a few of them were major offic
85 Post contains images Abba : To me it seems pretty much thought out. Airbus has a good profit margin. And your most beloved and highly beloved American working for Airbus seems t
86 Post contains images Thorben : Like we always do in Europe with projects worth more than €12 billion. Just stumbling into the dark.
87 Joni : I don't know how you "look" at the project, but I find it unlikely to say the least that the financial aspects of it haven't been examined in excruci
88 NAV20 : Abba, Thorben, I don't think the brief was ever, "Build the best VLA you can, which will sell in the expected market in good numbers and can be produc
89 Abba : It is indeed difficult to prove the negative - that something does not exists. I do not think that you really KNOW. (It might have been kept confiden
90 Sebolino : NAV20, you already said that Airbus PR was catastrophic while Boeing's was so intelligent and nicely expressed. I showed you that Boeing used the exa
91 Dougloid : The point is, they were required to produce a CPA under an agreement between the US and the EU as a condition of using government money, and they did
92 N79969 : Dougloid is correct. It is not a matter of proving the negative. Rather these CPAs were standard until the A380.
93 DAYflyer : Some people will but into anything this hack Leahy says. Sure they are close...if you include all the potential orders and options coming along in th
94 NAV20 : What an extraordinary statement, Sebolino. Boeing and Airbus have very different design philosophies. Their aeroplanes are in many respects totally d
95 Abba : ... which is not the matter that is being discussed here. Perhaps not - but you at times getting pretty close. Just read what you just wrote: Abba
96 Joni : You're naturally entitled to think whatever you please, but don't expect others to accord more merit to these kind of thoughts than they do to childr
97 Post contains links NAV20 : A bit more than a 'thought', Joni. With hindsight, this July 2000 article begins to look eerily prophetic:- ''Jean-Luc,'' Welch asked, ''is this thing
98 JetMaster : If you were able to prove the "safety" argument, nobody would question your preference. Regards, JM
99 Thorben : Well, Airbus has already 160 orders and a bunch of options, Boeing needs to speed up to get its fair share of that 400, otherwise the B747-8 might be
100 Post contains images NAV20 : That quote isn't me, Thorben, it's 'Business Week'. Took a bit of time off to watch TV - Australia just beat Uruguay to qualify for the World Cup. Giv
101 Thorben : OK, but could you answer my last paragraph (Repl.99) Welcome to Germany, Aussies. I was for you, because that makes the world-cup more global than an
102 Post contains images Numbertwelve : Break even or not - who cares? Airbus is subsidiesed from European governments (like the US farmers from US government by the way)
103 Post contains images NAV20 : Fair enough, Thorben, finished celebrating, I'll answer now. The answer is that all of us, you, me, Airbus, even the banks - are working not on facts
104 Joni : Indeed prophetic in the sense that the A380 has been built and there are examples already flying. However this is irrelevant to the discussion at han
105 Post contains images NAV20 : JM, I sincerely hope that I am NEVER able to prove it. So far, the products of both firms (excepting only the 747 and the A300) occupy very high posi
106 Sebolino : It has nothing extraordinary, it's a simple fact.
107 Joni : The breakeven point can be predicted assuming whatever scenario (comprising among other things the variables you mentioned) one chooses. Airbus has d
108 Abba : 5. Value of subsequent income generated by each sale Abba
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