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Businessweek.com - Why Can't Airbus Glide On 2005  
User currently offlineFlyingHippo From United States of America, joined Aug 2005, 684 posts, RR: 1
Posted (8 years 7 months 2 weeks 23 hours ago) and read 3390 times:

Looking at the business side of Airbus and Boeing's record breaking 2005:

http://yahoo.businessweek.com/bwdail.../jan2006/nf20060117_9445_db039.htm

Some interesting points I found interesting:

The profit margins for wide body jets are about 20% more than narrowbody jets. (I didn't know it's that much of a difference)

Based on face value, Boeing's 2005 orders are valued at 10 billion dollars more than Airbus orders.

Airbus has a 10% operating margin, that's impressive!

A340 orders vs. B777 orders:
A340: 15, B777: 154

EK's Clark has said that Airbus has pitched to its customers the idea of enhancing A340 even more, with more efficient engines and more composites.

Airbus has not asked for any aid to develop the A350 so far.

The record orders for both companies suggest that the airline industry has finally pulled out of its post 9/11 doldrums. Great news!!

[Edited 2006-01-18 22:43:42]

[Edited 2006-01-18 22:44:28]

17 replies: All unread, jump to last
 
User currently offlineMD-90 From United States of America, joined Jan 2000, 8507 posts, RR: 12
Reply 1, posted (8 years 7 months 2 weeks 23 hours ago) and read 3347 times:

Quoting FlyingHippo (Thread starter):
Based on face value, Boeing's 2005 orders are valued at 10 billion dollars more than Airbus orders.

Wonder if that gap still holds even with both manufacturers' discounts off list?

Anyway, over 2000 big airliners were sold in 2005. That's an impressive amount.


User currently offlineManni From South Korea, joined Nov 2001, 4221 posts, RR: 22
Reply 2, posted (8 years 7 months 2 weeks 23 hours ago) and read 3273 times:

Quoting FlyingHippo (Thread starter):

Based on face value, Boeing's 2005 orders are valued at 10 billion dollars more than Airbus orders.


Good estimate. The combined value is estimated at 200 billion US$. Airbus claims a 45% share or 95 billion US$, leaves 105, or 10 billion more than Airbus, for Boeing.

Quoting FlyingHippo (Thread starter):
The profit margins for wide body jets are about 20% more than narrowbody jets. (I didn't know it's that much of a difference)


That would be 20% more of the NB profitmargin, not 20% more profit on the listprice. If, as example, a NB has a 10% profit margin a WB would have a 12% margin. However, WB is a very general term covering the smallest 767 and A310 aswell as the A380 and 747. I'd assume that the profitmargins for each WB are different, aswell as for each manufacturer.



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User currently offlineAvObserver From United States of America, joined Apr 2002, 2471 posts, RR: 9
Reply 3, posted (8 years 7 months 2 weeks 23 hours ago) and read 3262 times:

Seemingly lost in Airbus's brouhaha about snagging the most orders in 2005 is the real truth that Boeing's orders were of a significantly higher dollar value. In my book, that, and not the higher numerical total propelled mainly by the lower margin A320 family, makes Boeing the real 2005 winner. Airbus has an unbeatable single-aisle product but has problems in the wide-body arena, mainly due to the A340 sales stall. By any measure, Airbus is still doing phenomenally well but isn't quite the invincible dragon they've often been tarted up to be the last few years. The A340 problem won't be an easy fix, given the -500/600 weight disadvantage vs. competing 777s. The 4-engine solution is rapidly losing credibility in this market, as Airbus itself tacitly admits by targeting the A350-900 against the 777-200ER. I'm not sure even Virgin's Branson is still buying into it after the last few years of fuel price increases though after touting it so highly awhile back, I doubt he'd admit to that. Another year or two of similarly poor sales for this big quad could put it on life support, despite whatever promises for improved performance Airbus makes. Scrapping the proposed enhanced version for an even costlier redesign to twin-engine configuration might be the preferred option, in my opinion.

User currently offline787engineer From United States of America, joined Dec 2005, 572 posts, RR: 15
Reply 4, posted (8 years 7 months 2 weeks 22 hours ago) and read 3225 times:

To me the article helps to emphasize the big gap the A350 needs to step in to fill. Right now only the A320 and A380 are selling well for Airbus. The A320 sales are unbelievable, and the A380 will come around once it enters service. Boeing has conceded the A380 market to Airbus, and Airbus has basically conceded the 747 market to Boeing. The A340 is on life support thanks to the 777, and I feel the A330 will get knocked out by the 783 and 788. Yea, its still selling at a decent pace, but it won't be able to compete economically with the 787. Once the 787s prove themselves in service the drop off in 330 sales will be more drastic than the 340's recently. The A350 will have to be another winner by Airbus to help keep all the major airlines from eventually switch over to 773s and 787s. Just seems to me the A350 has an awfully big task ahead of it.

User currently offline787engineer From United States of America, joined Dec 2005, 572 posts, RR: 15
Reply 5, posted (8 years 7 months 2 weeks 22 hours ago) and read 3208 times:

Quoting AvObserver (Reply 3):
higher numerical total propelled mainly by the lower margin A320 family, makes Boeing the real 2005 winner

A win is a win, let's not try to cheapen it. . . Airbus IS the winner in total orders for 2005.  Smile Congrats again to Airbus!


User currently offlineSingaporegirl From Singapore, joined Oct 2000, 302 posts, RR: 9
Reply 6, posted (8 years 7 months 2 weeks 22 hours ago) and read 3164 times:

Quoting 787engineer (Reply 5):
A win is a win, let's not try to cheapen it. . . Airbus IS the winner in total orders for 2005.

so is that like back in 2000 during the us election, gw bush won the electoral votes (and of course became the president), but al gore won the popular votes?  Wink



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User currently offlineScbriml From United Kingdom, joined Jul 2003, 12499 posts, RR: 46
Reply 7, posted (8 years 7 months 2 weeks 22 hours ago) and read 3159 times:
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Quoting AvObserver (Reply 3):
Seemingly lost in Airbus's brouhaha about snagging the most orders in 2005 is the real truth that Boeing's orders were of a significantly higher dollar value.

It's simply not true that it was lost.

Humbert openly discussed the relative value of Airbus's and Boeing's sales in 2005, admitting that Boeing's total represented higher value (55% vs 45%). He was also very honest about the poor year the A340 had against the 777.

Please don't lose the fact in all the "Boeing value" brouhaha that Airbus still significantly out delivered Boeing (this is where most of the money comes in) and, despite having "such an awful year", still managed to sell more widebody planes in 2005 than it has ever done in the past.

Despite the "200 A350s" own-goal, I think they are confident the A350 can compete with the 787 and that it will win significant orders. Just under 200  duck  orders and commitments at this stage of the program is hardly a dismal failure is it?

Humbert said that Airbus will look at what they can do this year with the A340, so we'll have to wait and see what they can come up with.



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User currently offlineGARPD From UK - Scotland, joined Aug 2005, 2649 posts, RR: 4
Reply 8, posted (8 years 7 months 2 weeks 22 hours ago) and read 3111 times:

Quoting Scbriml (Reply 7):
He was also very honest about the poor year the A340 had against the 777.

Never the less he sounded quite rattled when he answer questions about 777 V A340. He also tried to pad it out by stating the A330/340 family was leading a few years ago.

Sounded like straws, as in grasping at.

Quoting Scbriml (Reply 7):

Humbert said that Airbus will look at what they can do this year with the A340, so we'll have to wait and see what they can come up with.

He also said they see no need to update it as yet. So if they will do anything it would seem more piecemeal tweaks are in order



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User currently offlineGlacote From France, joined Jun 2005, 409 posts, RR: 2
Reply 9, posted (8 years 7 months 2 weeks 19 hours ago) and read 2982 times:

Quoting Manni (Reply 2):
The combined value is estimated at 200 billion US$. Airbus claims a 45% share or 95 billion US$, leaves 105, or 10 billion more than Airbus, for Boeing.

45% x 200b = 90b USD.


User currently offlineBjornstrom From Australia, joined Jun 2005, 329 posts, RR: 1
Reply 10, posted (8 years 7 months 2 weeks 19 hours ago) and read 2956 times:

Quoting AvObserver (Reply 3):
Airbus has an unbeatable single-aisle product...

Why is the A319-A321 series so much better than a B737NG? (you can refer to a old discussion as I am sure that this has been up earlier)



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User currently offlineAnxebla From , joined Dec 1969, posts, RR:
Reply 11, posted (8 years 7 months 2 weeks 19 hours ago) and read 2953 times:

Quoting Singaporegirl (Reply 6):
so is that like back in 2000 during the us election, gw bush won the electoral votes (and of course became the president), but al gore won the popular votes?

You are right, but anyway politics and the Aviation business don't combine well  Wink


User currently offlineFlyingHippo From United States of America, joined Aug 2005, 684 posts, RR: 1
Reply 12, posted (8 years 7 months 2 weeks 2 hours ago) and read 2757 times:

Quoting Singaporegirl (Reply 6):
so is that like back in 2000 during the us election, gw bush won the electoral votes (and of course became the president), but al gore won the popular votes?

Why?! Why Singapore Girl??? Why do you have to rip open my wound and put more salt on it?!?!

Quoting Scbriml (Reply 7):
despite having "such an awful year", still managed to sell more widebody planes in 2005 than it has ever done in the past.

I don't think anyone would say Airbus or Boeing had "such an awful year"... However, A340, one of my favorite plans as a passenger, did get their arse handed to them by 777....

Quoting Scbriml (Reply 7):
Despite the "200 A350s" own-goal, I think they are confident the A350 can compete with the 787 and that it will win significant orders. Just under 200 orders and commitments at this stage of the program is hardly a dismal failure is it?

I think it's mostly the fact that Boeing did the exact same mistake the year before, and Airbus didn't learn from it...


User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7123 posts, RR: 57
Reply 13, posted (8 years 7 months 2 weeks 2 hours ago) and read 2730 times:

Quoting FlyingHippo (Thread starter):
Airbus has a 10% operating margin, that's impressive!

As a matter of comparison (not an avsb) Boeing currently has a 7% operating margin.

Quoting Bjornstrom (Reply 10):
Why is the A319-A321 series so much better than a B737NG? (you can refer to a old discussion as I am sure that this has been up earlier)

It isnt, but perhaps because the end of the aircraft is in sight, airlines are concerned about long term residual values, making the Airbus better 'value'.

Quoting GARPD (Reply 8):
Never the less he sounded quite rattled when he answer questions about 777 V A340. He also tried to pad it out by stating the A330/340 family was leading a few years ago.

He deflected the question - no good company officer would ever say "The 340 is doomed" but we all know that it is as good as.



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User currently offlineXkorpyoh From United States of America, joined Oct 2004, 819 posts, RR: 0
Reply 14, posted (8 years 7 months 2 weeks 2 hours ago) and read 2680 times:

Quoting AvObserver (Reply 3):
In my book, that, and not the higher numerical total propelled mainly by the lower margin A320 family, makes Boeing the real 2005 winner

Boeing is the real winner. Airbus counted all the "chinese goverment" orders as one, while Boeing only counted the "chinese governement" orders that were assigned to specific airlines. Why doesnt boeing go back and add those orders? i will for sure pass Airbus by about 50 or more orders (ang get their newspaper headline back from Airbus)

Quoting Singaporegirl (Reply 6):
so is that like back in 2000 during the us election, gw bush won the electoral votes (and of course became the president), but al gore won the popular votes?

 checkmark 


User currently offlineDazeflight From Germany, joined Jun 1999, 580 posts, RR: 2
Reply 15, posted (8 years 7 months 1 week 6 days 5 hours ago) and read 2519 times:

Quoting Xkorpyoh (Reply 14):
Boeing is the real winner. Airbus counted all the "chinese goverment" orders as one, while Boeing only counted the "chinese governement" orders that were assigned to specific airlines. Why doesnt boeing go back and add those orders? i will for sure pass Airbus by about 50 or more orders (ang get their newspaper headline back from Airbus)

get your facts right before cheerleading:

A.net:The China Orders And 2005 "totals"...


User currently offlineXkorpyoh From United States of America, joined Oct 2004, 819 posts, RR: 0
Reply 16, posted (8 years 7 months 1 week 6 days 4 hours ago) and read 2457 times:

yep..just read it. and it is still clear that Airbus counted all the chinese orders in 2005 but Boeing only counted the allocated orders to the specific airlines done in 2005... they ordered the same amount, so Boeing's orders are higher if we go with the same accounting procedure airbus used

User currently offlineJoni From , joined Dec 1969, posts, RR:
Reply 17, posted (8 years 7 months 1 week 6 days 3 hours ago) and read 2365 times:

Quoting Xkorpyoh (Reply 14):
Boeing is the real winner. Airbus counted all the "chinese goverment" orders as one, while Boeing only counted the "chinese governement" orders that were assigned to specific airlines. Why doesnt boeing go back and add those orders? i will for sure pass Airbus by about 50 or more orders (ang get their newspaper headline back from Airbus)

You're assuming that Boeing's and Airbus' "Chinese orders" are on similar terms, which is by no means necessarily the case. Indeed the fact that they're counted differently by A&B infers that the terms aren't the same.


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