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FI: Airbus To Offer Customers Cash Back On A340s  
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Posted (8 years 7 months 3 days 17 hours ago) and read 18592 times:

The electronic edition of this week's Flight International is reporting:

FI 24-January-2006 "Airbus to offer cash back on A340 as 777 stretches lead" (fair use)

"Airbus executives [John Leahy is quoted in the article] say they will not be panicked into a "rash" decision to reinvigorate the 340-500/600 family and believe they can compensate for the higher operating costs of the four-engined aircraft over the rival Boeing 777 by offering cashback deals to potential customers rather than investing in a costly redesign..."

Hopefully the full article will be online by the end of today.

[Edited 2006-01-23 11:35:50]

205 replies: All unread, showing first 25:
 
User currently offlineGARPD From UK - Scotland, joined Aug 2005, 2646 posts, RR: 4
Reply 1, posted (8 years 7 months 3 days 17 hours ago) and read 18557 times:

Quoting Leelaw (Thread starter):
higher operating costs of the four-engined aircraft over the rival Boeing 777

So its true then? The A340 DOES cost more to operate?



arpdesign.wordpress.com
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 2, posted (8 years 7 months 3 days 17 hours ago) and read 18523 times:

So they'll effectively be PAYING people to fly their aeroplanes?

Does rather make you wonder whose money they're planning to use?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineHS748 From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 7 months 3 days 17 hours ago) and read 18506 times:

Quoting NAV20 (Reply 2):
So they'll effectively be PAYING people to fly their aeroplanes?

Don't be silly.


User currently offlineAerosol From Germany, joined Oct 2000, 558 posts, RR: 0
Reply 4, posted (8 years 7 months 3 days 16 hours ago) and read 18496 times:

Quoting NAV20 (Reply 2):
So its true then? The A340 DOES cost more to operate?

With a possibily of oil hitting the $100 this week, I think so!


User currently offlineTheSonntag From Germany, joined Jun 2005, 3564 posts, RR: 29
Reply 5, posted (8 years 7 months 3 days 16 hours ago) and read 18448 times:

Just to keep things in perspective: McDD was paying (or, better said, compensating) customers for years because the MD11 didn't do what it was promised to do.

Certainly not good, but nothing unusual.


User currently offlineMir From United States of America, joined Jan 2004, 21558 posts, RR: 55
Reply 6, posted (8 years 7 months 3 days 16 hours ago) and read 18437 times:

Airbus is starting to sound like a car company.

-Mir



7 billion, one nation, imagination...it's a beautiful day
User currently offlineGlom From United Kingdom, joined Apr 2005, 2815 posts, RR: 10
Reply 7, posted (8 years 7 months 3 days 16 hours ago) and read 18346 times:

Quoting Mir (Reply 6):
Airbus is starting to sound like a car company.

No. They're started to sound like Sainsburys.


User currently offlineSFORunner From United States of America, joined Jul 2004, 324 posts, RR: 0
Reply 8, posted (8 years 7 months 3 days 16 hours ago) and read 18322 times:

What's next, a free tank of gas with each new A340 purchased? Fuzzy dice for the cockpit?

User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 9, posted (8 years 7 months 3 days 16 hours ago) and read 18320 times:

Quoting TheSonntag (Reply 5):
McDD was paying (or, better said, compensating) customers for years because the MD11 didn't do what it was promised to do.

That would be somewhat different. The MD-11 didn't make its performance guarantees. I believe that McDD wasn't paying the operators as an incentive to purchase. Mir is right in that this is what car dealers to--provide incentives to buy the product in the first place.



"When all is said and done, more will be said than done".
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 10, posted (8 years 7 months 3 days 16 hours ago) and read 18302 times:

Quoting NAV20 (Reply 2):
So they'll effectively be PAYING people to fly their aeroplanes?

From FI Article:

"Is it a good investment [for Airbus] to spend a couple of billion dollars to get a better aircraft, when you can solve the fuel burn problem with money?" asks Leahy...."I can agree a figure with a customer that reflects a fuel burn delta and run that out over 12 years and pay it to them."


User currently offlineAirways45 From United Kingdom, joined May 2000, 300 posts, RR: 0
Reply 11, posted (8 years 7 months 3 days 16 hours ago) and read 18294 times:

In 2005 there were 12 A340-500/600s sold compared to 154 777s.

The 777-300ER has, according to Airbus a single digit fuel burn advantage over the A340-5/600.

Airbus COO John Leahy stated:

"Is it a good investment [for Airbus] to spend a couple of billion dollars to get a better aircraft when you can solve the fuel burn problem with money".

From Flight International:

The A340-600 and 777 have "comparable ranges and seat counts and Rolls-Royce guarantees that maintenance costs for four engines are the same as the twin".

John Leahy continues:

"I can agree a figure with a customer that reflects the fuel burn dela and run taht out over 12 years and pay it to them... but if the 777's fuel burn advantage was to give it greater range, then we'd have to look at [improving the A340]."


User currently offlineOlympicbis From , joined Dec 1969, posts, RR:
Reply 12, posted (8 years 7 months 3 days 16 hours ago) and read 18281 times:

Quoting Mir (Reply 6):
Airbus is starting to sound like a car company

The way Boeing sounded when they "sold" their B738s to Ryanair for example and to name only one ?


User currently offlineVfw614 From Germany, joined Dec 2001, 3996 posts, RR: 5
Reply 13, posted (8 years 7 months 3 days 16 hours ago) and read 18260 times:

Why don't they simply lower the sales price accordingly ? Would only look half as stupid as this pay-back stuff and cannot be rocket science to calculate....

User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 14, posted (8 years 7 months 3 days 16 hours ago) and read 18211 times:

Just my opinion, but I am surprised to see this out in the public domain. A company as public relations sensitive as Airbus usually opts to incentivize customers privately. (and I am only referring to "above board" business here; not insinuating anything untoward!) Again, just my opinion, but there is a solid cadre of A340 operators around the world that have too much invested in this aircraft to change horses: SAA, LH, VS, PR, Sri Lankan, Air Tahiti Nui, IB, and others. Would the current operators eligible for the fuel burn discount, as well?

[Edited 2006-01-23 12:30:56]


"When all is said and done, more will be said than done".
User currently offlineRichardPrice From , joined Dec 1969, posts, RR:
Reply 15, posted (8 years 7 months 3 days 16 hours ago) and read 18202 times:

Quoting Vfw614 (Reply 13):
Why don't they simply lower the sales price accordingly ? Would only look half as stupid as this pay-back stuff and cannot be rocket science to calculate....

Because a cashback means you GET the money to start with, and can start earning interest on it. It doesnt say if the customer gets all the money at the start, or over the period the delta is agreed on. If its the latter, then Airbus continue to earn interest until the money is paid each year.

If Airbus can do this, then it means they can put off developing a replacement aircraft for a few years and benefit from the advance in technology that happens in the meantime, which means a better aircraft.


User currently offlineKangar From Ireland, joined Feb 2000, 395 posts, RR: 0
Reply 16, posted (8 years 7 months 3 days 16 hours ago) and read 18184 times:

Ah, so we're back to believing everything Mr Leahy says now, are we?

User currently offlineSFORunner From United States of America, joined Jul 2004, 324 posts, RR: 0
Reply 17, posted (8 years 7 months 3 days 16 hours ago) and read 18164 times:

Quoting Leelaw (Thread starter):
offering cashback deals to potential customers

Airbus gets subsidies to launch the A340.

Airbus provides subsidies to buy the A340.

 duck 


User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 18, posted (8 years 7 months 3 days 16 hours ago) and read 18147 times:

So, what is new ?

OEM "support" to "bridge" a "transistion period". Hardly any deals without it.

Take a good look at recent the Air Canada and NWA deals.

[Edited 2006-01-23 12:40:42]

User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 19, posted (8 years 7 months 3 days 16 hours ago) and read 18137 times:

Quoting Kangar (Reply 16):
Ah, so we're back to believing everything Mr Leahy says now, are we?

Why would we doubt Mr. Leahy's credibility or veracity on this matter?

[Edited 2006-01-23 12:41:06]

User currently offlineOyKIE From Norway, joined Jan 2006, 2732 posts, RR: 4
Reply 20, posted (8 years 7 months 3 days 15 hours ago) and read 18078 times:

I don't think this is a dumb Idea. If you can sell the A340-600 at a price that makes the capital investment so much lower than the 777 that it makes up for the increase of fuel burn over a period of 12 years then Leahy has something to sell to airlines. And I think Airbus is able to sell the A340 at a low price and still make money. If they can get the sales to keep the A340 going until the A340-600 enhanced is available it might not be such a bad idea after all.


Dream no small dream; it lacks magic. Dream large, then go make that dream real - Donald Douglas
User currently offlineSabenapilot From Belgium, joined Feb 2000, 2714 posts, RR: 46
Reply 21, posted (8 years 7 months 3 days 15 hours ago) and read 18025 times:

I think this is in fact a very good and sound business strategy!

It has been used with much success by Airbus in the past, notably to offset the higher cost of:
additional crews
increased maintenance investments (spare parts)
extra facilities (containers, loaders, trolleys)
and all other expected investments new Airbus operators are looking at when switching from B to A, so why not use the same financial mechanism to take away the only disadvantage the A340 has developed vs the 777 only recently, that of the higher fuel bills?

As RichardPrice pointed out, a cashback operation would give airlines back all the financial benefits of the A340, namely the already relatively lower acquisition price as well as a traditionally similar operating cost than the 777.

Quoting Lumberton (Reply 14):
I am surprised to see this out in the public domain.

These kind of deals are quite common for Airbus really (see above), so I think Mr Leahy is just signaling that A has done their calculations and decided it can come up with similar mechanisms to offset the higher fuel bills too. Expect a much more in-depth explanation of the mechanism to be handed over to several key customers and I think many airlines will be seduced to at least evaluate the A340 somewhat closer again in the future....

Quoting Lumberton (Reply 14):
Would the current operators be eligible for the fuel burn discount as well?

Of course, but because of other financial savings through commonality too, don't expect the 'cash back' for an all Airbus operator like IB to be the same than for a new A340-600 operator, which is why Airbus has always prefered to work with compensating mechanisms (taylor made for each case) rather than with a price cuts on the list price.

Very good news in my view!

[Edited 2006-01-23 12:59:02]

User currently offlineKangar From Ireland, joined Feb 2000, 395 posts, RR: 0
Reply 22, posted (8 years 7 months 3 days 15 hours ago) and read 18025 times:

Quoting Leelaw (Reply 19):
Why would we doubt Mr. Leahy's credibility or veracity on this matter?

Because you doubt it on pretty much every other matter.......


User currently offlineShenzhen From United States of America, joined Jun 2003, 1710 posts, RR: 2
Reply 23, posted (8 years 7 months 3 days 15 hours ago) and read 17879 times:

However.......................... As with any contract, this would end as soon as the airplane is sold, meaning the re-sale value of the airplane is unaffected, therefore the purchase price is still to high.

If Airbus are at the point of stating this in public, then it is quite obvious that it hasn't worked in the recent past, so is now being used as some sort of PR gimick. Remeber when he said, "I'll just drop the price of the A330-200, because I don't have any development cost" ?


Cheers


User currently offlineTifoso From United States of America, joined Jan 2006, 440 posts, RR: 0
Reply 24, posted (8 years 7 months 3 days 15 hours ago) and read 17816 times:

Quoting Sabenapilot (Reply 21):
as well as a traditionally similar operating cost than the 777.



Quoting Leelaw (Thread starter):
Airbus executives [John Leahy is quoted in the article] say they will not be panicked into a "rash" decision to reinvigorate the 340-500/600 family and believe they can compensate for the higher operating costs

A little contradictory there, Sabenapilot? After all, Airbus is coming up with this scheme to offset the higher costs associated with using the A340.

[Edited 2006-01-23 13:46:19]

25 Leelaw : IMO, it's a wise policy to take most of the sales puffing that Baseler and Leahy spout with a grain of salt, this seems like a more substantive polic
26 Kangar : I would say it's a throwaway comment myself, remember, he's a salesman, he doesn't run the show.....
27 NAV20 : Tell you the truth, Kangar, IMO he does run the show. If he doesn't run the sales side properly, in the end nobody eats........ I must admit that I f
28 Leelaw : I disagree with your assessment, I think the likelihood of an uncoordinated and/or unsanctioned Leahy pop-off on any subject is low at this point in
29 N79969 : You believe anything Airbus says or does to be good and sound. ************ This does not inspire confidence in the A340. Unless the A340 has suddenl
30 Shenzhen : One has to wonder what Rolls Royce has to think about these comments. If an airline is to be offered a 777NG performance gurantee, then one could ass
31 Post contains images NAV20 : Shenzhen, I think you meant 'an A340NG performance guarantee'. Still time to edit.
32 Shenzhen : I may not have worded it perfectly, but I meant 777NG gurantee, as that is what the A340 will be guaranteed against. Cheers
33 Post contains images AKelley728 : Or the way Airbus sounded in their Easyjet deal?  [Edited 2006-01-23 15:20:05]
34 WhiteHatter : Rolls Royce delivered the Trent 500 to Airbus specifications. Their part of the deal has been delivered on. You cannot expect a company to compensate
35 Post contains links Keesje : Indeed, they gained market share for the last 5 years & probably will continue to do so in 2006 and 2007. Personally I don't think the heralded new a
36 Shenzhen : Ahhh.... what is in it for them.... well how about four engines per airframe. If Rolls Royce wants to sell any more of those engines that "work" on t
37 N79969 : This is just completely and abjectly absurd. Airbus is an aerospace manufacturer and supplier of aircraft to airlines. That it now must consider assu
38 Tifoso : NAV20, there is no denying the fact that the A340 is a quality product. It may not be as good as it's competitor when it comes to fuel burn and opera
39 Jaysit : I agree. Especially as the much ballyhooed A380 is about to start passenger service this year. By publicly acknowledging that the A340 is an inferior
40 Shenzhen : Not going to dig through any numbers, but would be willing to bet that any A340 market share gain over the past 5 years was negated in 2005. Certainl
41 OldAeroGuy : The problem is that the single digit is an exponent to ten in scientific notation. The 773ER burns about 10% less fuel per trip compared to the A346H
42 NYC777 : This is a very telling statement from Airbus. Instead of investing money to improve a product which would take years and require cash outlays in the f
43 Post contains images NAV20 : Tifoso, I was reacting to Leahy saying, "Is it a good investment to spend a couple of billion dollars to get a better aircraft....." I wasn't implying
44 OldAeroGuy : On second thought, maybe the subdizidation plan is an admission that Airbus thinks the future market of the A345/6 is 100 airplanes or less.
45 Killjoy : I find this a bit strange. While I understand the reasoning, I can't figure out why it should be a simple all or nothing decision. Spending huge amoun
46 Trex8 : if its good enough for Daimler Chrysler, GM, Ford,(ok so those two are going down the tubes!) even Honda and Toyota why isn't it good enough for an ai
47 Max999 : This cash back is similar to what Ford and General Motors are doing recently... offering heavy discounts on products they know are selling very poorly
48 PlaneDane : Wouldn't the best solution be for Airbus to simply let the A340 program die? The current A350 design and perhaps a further stretch could take the pla
49 Post contains images Killjoy : Bill Ford is live on TV right now discussing job cuts of up to 30 000 people .
50 WINGS : What problems? From what Im aware they are just running late with A380. Maybe you will be kind enough to point out all the problems with the A380 and
51 OldAeroGuy : This option is out of Airbus control. It puts all the risk on RR and they may be unwilling to make the investment, given the size of the market. The
52 Widebody : It's easy to understand the above when you know how sales campaigns work. Airlines today use the total life-time cost of the aircraft in order to push
53 Atmx2000 : I doubt the HGW is costing very much. The question is why did they think it was a good idea anyway? Well, maybe they are in the position that Boeing
54 STT757 : This is a doubled edged sword for any airline that would take Airbus (Leahey) up on the cash back offer, the problem is that through these comments th
55 N79969 : I do not think that is an easy option either. Since the A330/340 share the same assembly line, costs are amortized across the two products. A complet
56 OldAeroGuy : The HGW was committed to development back in 2002 when Airbus was still in denial about the fuel burn differences between the A346 and the 773ER. The
57 Atmx2000 : But guarantees on the maintenance only exposes you to labor and parts costs. Fuel guarantees exposes you to a volatile commodity's price. Hedging to
58 Widebody : You're not guaranteeing the fuel price, only the cost of operating the engine when the fuel passes through it. It's a comparison process, you don't ge
59 787engineer : I don't see your point with this post. Do you like to hear about people losing their jobs? Are you trying to draw the ridiculous analogy to Ford offe
60 Dw747400 : I think these are two very important points. First, the cost of the cash back depends on the projected cost of fuel and the number of aircraft sold.
61 Post contains images Francoflier : And now, introducing Airbus 'employee discount' on some of Airbus' greatest products! Visit your local Airbus dealership for more information.
62 Max999 : I'm not sure who you're trying to quote, but I didn't mention anything about job losses. I was trying to make the analogy that Airbus is recognizing
63 OldAeroGuy : The HGW change was primarily structural in nature. The airframe was strengthened to increase MTOW and MZFW. The MZFW increase was necessary to match
64 Boeing767-300 : What a load of rubbish and even if they did they are woefully short of the GE perfomance (Economy) Aircraft should never designed or engines for that
65 Jacobin777 : well...we'll see how accurate their predictions have been.....they obviously coudn't have predicted that fuel would be so expensive, and I wouldn't b
66 Atmx2000 : Which might be what they are considering this. Airbus has been able to acquire a number of all-Airbus operators or airlines who haven't purchased fro
67 Post contains images 787engineer : I was actually quoting Killjoy (reply #49). I didn't think his by the fact that Ford is laying off 30,000 employees was very appropriate. I also thin
68 Killjoy : I think he was quoting me. Like jumping to conclusions, do you? It's just rather amusing that the Ford news hit the air at the exact same time Max999
69 Kangar : Folks, Can we just put one myth to bed here. At no time in the last 30 years has fuel efficiency been anything less than a primary concern in the desi
70 Post contains links Leelaw : The full text of FI article is now available online: http://flightinternational.com/Artic...on+A340+as+777+stretches+lead.html
71 N79969 : The distinction you attempt to draw is not meaningful. Think about variable has changed dramatically since the A340-600 was launched? As you know, it
72 GARPD : This whole thing strikes me as desperation.... Ok, perhaps desperation isn't the best word to use, about about the phrase "grasping at straws". I am i
73 Tifoso : Any rough estimates on what Airbus is going to be paying per frame assuming an ownership period of 12 years, as per Leahy's comment? The A346 list pri
74 Kangar : Folks, This all originated from one throwaway comment from Leahy, since when has everything he says been taken for gospel? I'd personally be very con
75 GARPD : I should very well hope so. But now that the suggestion is out in the press. Surely the WTO will be taking a long hard look at the sales transactions
76 Kangar : Correction, one offhand comment has been turned into an entire article in FI, you will notice, that Humbert, the man who counts at Airbus has said no
77 GARPD : I still see that even the suggestion of these "pay offs" to airlines by Leahy could cause some scrunity that would otherwise probably not have happene
78 Post contains images Jacobin777 :
79 N79969 : Yeah but he is also one of the top three officials at Airbus and holds the position of Chief Operating Officer. He is in charge of sales and he is ta
80 Atmx2000 : I wouldn't be so certain about it. They won't do it on a large scale, but they will do it to protect their position at some airlines, likely the smal
81 11Bravo : ..., and I would be surprised if FI didn't give Airbus an opportunity to clarify their position prior to publication. That's pretty standard practice
82 Post contains images Scbriml : Let's not make it sound like a bribe shall we? How is this any different to a car dealer including five years' "free" servicing or a year's "free" pe
83 GARPD : An entirely simple, expected and false analogy my esteemed fellow member. It differs mainly in that were are not talking about cars, but aircraft. Se
84 Kangar : They don't seem to have done that when they went to print over the recent composites debacle. It will have zero impact on the WTO hearings. Airbus ar
85 Ikramerica : If this is only meant to tide them over for a few years until the A350 flies, and they are selling 15 a year, it isn't such a bad thing, even if it is
86 GARPD : I completely agree. I think this is nothing more than baloney from a well practised story teller.
87 Katekebo : In my opinion is taking a big risk. It may not be a bad business tactic as long as it is just a short time measure, limited to the A340 to keep it afl
88 N908AW : This is of course assuming that in 12 years crude is at the exact same price...and it also assumes they'll only use it for 12 years. In any case, mos
89 Ruscoe : I think the reason Airbus is considering the cash back rather than airframe enhancement is that they know that Boeing will respond with an enhanced 77
90 Ken777 : Both Airbus and Boeing have limited resources - human resources and financial resources. Airbus is facing a problem with the 340, but the simple face
91 Atmx2000 : I expect Boeing would like engines for the next gen narrowbodies to be almost ready around the time the 787-9 and 787-10 enter the marketplace and no
92 GARPD : Which shouldn't be all that hard to do, considering that once such a project launches the 777 would be about 20 years old.[Edited 2006-01-23 22:13:22
93 Kangar : One key to the whole Airbus competitiveness situation rests with the A380. If Airbus can make this aircraft genuinely successful, if the operating eco
94 Post contains images Glideslope : This should not be news to anyone in aviation.
95 Widebody : Read the article N79969, it says cashback deals to potential customers, not current customers. The cashback deal becomes contractual through the sales
96 AirFrnt : I agree with the analysis that this is basically Airbus providing fuel hedges for anyone who is daring enough to buy a A340. However, if I were some o
97 Atmx2000 : This program has run concurrently with the behind schedule A380. Airbus may not have devoted the resources to the HGW variants that would make it pos
98 Atmx2000 : It's an operating cost differential directly linked to fuel price and that varies with fuel price. The amount of compensation would rise with fuel pr
99 Post contains images Scbriml : In what way is it false prey? I do recognise the difference between cars and planes , but you failed to actually explain why such an incentive for an
100 N79969 : This is exactly right. The amount of cash exposure that Airbus would face would largely determined be the price of fuel. How else would Leahy's "delt
101 Ken777 : The problem, as I see it, is the fact that Airbus has limited resources and I'm talking about human resources. Talented engineers that can be put on
102 Kangar : I have read your post, you make good points, but I must disagree with the above - it is a long time since fuel has been anything other than a primary
103 OldAeroGuy : Actually, I think Airbus farmed out the analysis and design work to US contract engineering houses. Airbus engineering resources were not fully engag
104 Post contains images Spartanmjf : To quote Edwin Land, inventor of the Polaroid Land Camera: "Marketing is what you do when your product is no good." Sorry, I just couldn't resist....
105 Dalecary : the end of the line for the A340 comes closer. Airbus has been shopping around both the discounted 345/6 and the enhanced 345/6 for a while now(certai
106 OldAeroGuy : If Boeing wasn't concerned about fuel efficiency before the 787, why does the 773ER burn 10% less fuel per trip and 25% less fuel per passenger than
107 Post contains images A388 : As much as I like Airbus, these things are the things I don't like. I see the term WTO written all over this move. Anyway, good luck to both Airbus an
108 N1120A : Not to mention the 737NG's (not to mention the 737Classics) burning less and having lower operating costs than the competitive A320 Family members.
109 787engineer : The improved fuel burn comes mostly from those enormous engines on the 777. Those engines weren't avaliable when the A340 was designed, so the A340 w
110 Widebody : Fully agreed that the Airbus compensation is going to rise with fuel prices, however the initial delta is down to the engine operating efficiency, whi
111 PlaneDane : If what you're saying is accurate, Widebody, then this sales tactic seems like a risky proposition and could be deleterious to what Airbus hoped to a
112 Travelin man : The A340-600 and 777 have “comparable ranges and seat counts and Rolls-Royce guarantees that maintenance costs for four engines are the same as the
113 Widebody : Not really PlaneDane, in the past manufacturers slogged it out over the actual aircraft price, nowadays they slog it out over the total cost of owners
114 OldAeroGuy : Your disagreement is with Kangar (Reply 102), not me. He was the one who said Boeing has only been concerned about fuel burn since the advent of the
115 Gasman : This is nothing short of an admission, by it's own manufacturer, that the A340 is a dead duck. Shame really, because I particularly like the pencil th
116 Widebody : Airlines nowadays are only focused on one thing - money. Anyone who works in the admin side of an airline will understand that tech/reliability/operat
117 Trex8 : they actually hired 100 something engineers to work for Airbus N America in Wichita, it allows them to run almost a 24hr engineering department the g
118 Dougloid : What would this do to the profit that was earned on the A340 to begin with? I dunno, offering to give away money with nothing in return seems like a m
119 Trex8 : they don't need A340 sales to keep the line going, the A330 is selling just fine with an adequate backlog , there are something like 350 A330/340s on
120 Leelaw : Backlog 12/31/05: A330= 186 A343 = 5 A345/6= 68 Total= 259[Edited 2006-01-24 03:12:58]
121 Post contains images CX flyboy : During a recent competition between Boeing and Airbus for a large order at a company I know well , Airbus repeatedly answered the airline's queries an
122 ContnlEliteCMH : I see your point. Now I hope you'll see two serious flaws in it: (1) The vast, vast majority of new car purchasers do absolutely no due diligence in
123 N79969 : That's pretty interesting...so Airbus has already employed the tactic at least once and one airline did not bite. If Airbus would have to pay all the
124 Boeing767-300 : Giving cash away is an incentive to buy an inferior product. General Motors and Ford in the US are offering cashbacks but you don't see Honda and Toyo
125 Post contains links OldAeroGuy : Strange, but FI seems to think the A330/A340 backlog sits at 259, or about 2.5 years worth of production at 8 per month. A330: 186 A343: 5 A345/6: 68
126 Post contains images Iwok : The've probably come to the conclusion that the market for 4-holers is about to dry-up (except for VLA until the super twins arrive ), and they do no
127 PlaneDane : Sorry, but the engines are only part of the success story with the B777, 787engineer. I can personally assure you that Boeing engineers worked a lot
128 NAV20 : Apart from anything else, a 'cashback' strategy simply can't work in business terms. An aeroplane is a capital asset with a working life of the order
129 Atmx2000 : I didn't say it wasn't a key factor. But I still don't think it was the most important factor. It seems to me the most important consideration for Ai
130 Manni : While 54 A330 might not sound a lot to you, IIRC 2005 was the second best year ever for the A330 and this despite the A350/787 on offer. It seems tha
131 Elvis777 : Hello Manni, I see what you are trying to say. But it is highly likely that this is the last year that the A330 sales wont be affected by the 350/787.
132 OldAeroGuy : While it may have been the second best year yet, why wasn't it the best? It was for the other airplanes in its market slot except for the 767. The an
133 Atmx2000 : Deliveries were only 80 last year, so the backlog isn't decreasing quite so fast. But if they don't significantly increase A330 orders it will, as th
134 FlyDreamliner : A330 is a good replacement for the 767 and A300 for airlines who weren't going to wait for dreamliner or A350, and so it's found steady sales. A340 go
135 Post contains images Scbriml : It was actually 79 gross - 49 x A332, 15 x A333, 3 x A342, 12 x A346. Deliveries in 2005 were 80, but Airbus has said that they will increase deliver
136 Thorben : Replacement of the 747-8? Why not? The A350 has shown that it can compete with the 787 (see QR). And Airbus can apply the A350 advantages to the A346
137 Post contains images Beowulf : I read through some of the comments and I come to the concusion that many of you are naive. It's normal that customers ask for and get some type of di
138 Atmx2000 : Let's wait to see that firm order. That's nice. So when are those 100K lbs GEnx/Trent engines going to become available? I'm sure Boeing would like t
139 GARPD : You call people naive, yet either you are so or ignorrant. 1, this is not about discounts, it is about a "cash in hand" deal 2, NO ONE claims that Bo
140 Glareskin : I think the comparison with the car manufacturers is in place here. As some of you already said the discount policy is a common thing for them if sale
141 Post contains images Beowulf : Whether a "discount" comes in the form of an upfront discount or a backend incentive is irrelevant, in my opinion. Both forms reduce the earning of c
142 GARPD : Erm, Leahy is very clear in stating he (they) would pay for the difference in fuel costs over 12 years. [Edited 2006-01-24 12:10:27]
143 Lumberton : This is not a discount in the usual meaning of the word. IMO, what we're talking about here is a purchase incentive in the form of a subsidy. Whether
144 Thorben : OK I never said it wwas going to be a twin. Besides, I think the current 773ER engines already have a lot of GEnx technology. Anyway, put the same en
145 Trex8 : Airbus website today, total orders 1044, delivered 698, difference 346
146 Post contains links Halibut : This is just more proof that Boeing is an Engineering led Company & Airbus Sales Led ! http://www.flightinternational.com/A...ng+triumphs+in+twinjet+t
147 Leelaw : I just looked at the Airbus website myself, total orders of 1044 in this category includes the A330/340/350: 346 less A330/340 backlog of 259 equals
148 MrComet : I think it is a great capitalist idea that can be expanded. Airbus now doesn't ever have to beat Boeing with a more efficient product. They can just o
149 BoomBoom : When US auto companies give big discounts on slow selling new cars it affects resale value of their prior sales and damages the brand. The same thing
150 Post contains images Atmx2000 : Ooh, that's harsh. Though I think the larger figure of 2000 jobs also includes jobs in Sweden.
151 N328KF : This is a rather myopic viewpoint. The fact of the matter is that the A330 slots being sold are mostly for delivery before 787/A350 availability. To
152 Tifoso : That is just wrong. To have a second best year when there were 2000+ orders (i.e. unprecented) in 2005 is not evidence of the A330's strength. I don'
153 N328KF : Funny you should say that. This is a headline from The Wall Street Journal from a few minutes ago:DaimlerChrysler said it will cut 6,000 jobs over th
154 Kangar : Halibut/Dougloid - You don't expect a chief executive to say the 787 is inferior after buying it, do you? Point is Guys, It is unfair in the extreme
155 Atmx2000 : And as I have said before, simply being later to market isn't an advantage unless there is a major technical advance one can take advantage off. In t
156 N79969 : Yes. That is the basic point. Certain costs are fixed and do not vary by the number or type of aircraft produced. For example, the costs of keeping t
157 11Bravo : That's a great strategy when you're introducing a new aircraft to run against the competition, as was the case with the B777. It doesn't work nearly
158 Thorben : This doesn't become true no matter how often it is repeated. Actually, the opposite is closer to the truth. Airbus is a company that is out there to
159 Killjoy : Wtf, I take a jab at Airbus by pointing out that a company it was compared to just axed 30 000 jobs, and somehow you Americans interpret it as an ins
160 GARPD : Ah Thorben, always one to entertain us. Are you sure you're not an alias for Keesje? What you're suggesting is total rubbish. You need to grow up som
161 N328KF : Even then, you can't always say that such advances will rule the day. When the A320 series was introduced, it had FBW and other advancements, and whi
162 Post contains links N79969 : Bass ackwards. If Flight International and CxFlyboy are to believed, Airbus is so profit oriented that they are willing to pay cash back to airlines
163 Atmx2000 : Well, it did force Boeing to replace the 737 Classics with models of similar capability. The fact that its tech advantages haven't had an impact on B
164 GARPD : Heh, agreed
165 Glareskin : Sorry for bringing up the comparison with the automotive industry. I'm afraid it provoked a discussion about the wrong topic. What I was trying to say
166 Post contains images Manni : And that's just what this quote of mine indicates. A parrot could have typed your reply.
167 FlyDreamliner : Some things to think about: Firstly, Airbus is offering rebates to airlines as life support for the A340 program. At the same time Boeing is seeing r
168 Halibut : Agreed ! However, my beef is with the Polititions that I " Feel " ...! that have intervened in many of AB's decisions , which I believe were not made
169 FlyingHippo : Eh... I'm not so sure about that. A350, with almost brand new design, and next generation of engines, is competing with 772ER and doing a good job at
170 Trex8 : duh! sorry didn't notice the A350 bit! well, now we know whats the real A350 order number anyway!!!
171 Lehpron : Isn't the affect of the rising price of oil instantaneously linear, that it affects any airplane? How can A340, in this example, cost more to fly whe
172 Post contains images NAV20 : Aerosol's quote was from GARPD, not from me, Lehpron. The relationship is a bit more complicated than that, though; rising fuel prices would hit A340
173 Ikramerica : In theory, no. Assume that aircraft A has fixed costs to fly a route of $100 (insurance, amortization, maintenance indexing, crewing, whatever). Then
174 Echster : I'm not even trying to pretend I know a lick about this subject, but why couldn't Airbus just buy fuel on the futures markets and offer those futures
175 Elvis777 : Hello Thorben, I am sure I misunderstood you. Here in the states Boeing is not the flag bearer of our country. I am sure lots of aviation enthusiasts
176 Thorben : Airbus isn't offering anything read the article and what Humbert said. Again, not true no matter how often repeated. Airbus gets LOANS which it has t
177 Astuteman : Don't deduce an Airbus Europhilia from what you see posted on A-net - most of the people that I meet and have cause to question in the Uk don't even
178 Leelaw : Interesting observation. In America, "Boeing" is iconic mostly in the sense of brand name recognition; however, I don't think that very many American
179 GARPD : Then explain why the 744 still vastly outnumbers it in service with airlines all over the world. If it was a true 744 killer, we'd see a heck of a lo
180 Thorben : When was the last time a pax 744 was ordered? The exchange from 744 to A346 (and 773ER) doesn't go fast, I admit. These are huge investments and at a
181 Dougloid : You know, something else occurs to me here. Here's more or less what Mr. Leahy said on the subject. "Is it a good investment [for Airbus] to spend a c
182 FlyingHippo : As much as I love the A340s, it's sleek looks and quiet cabins, I must admit that when I see the numbers, I am not too optimistic about it... Then I s
183 FlyingHippo : Again, you don't understand the difference between a loan that will need to be paid back if you turn a profit and tax breaks. A tax break only happen
184 Atmx2000 : Indeed, it would have been poor politics to do so, since for most of Boeing's life it had domestic competition.
185 Post contains links N79969 : I think this is incorrect. The average American really knows little or cares little about Boeing. This is right. In contrast, the A380 rollout had at
186 Trex8 : there are also tax breaks for not paying property taxes etc etc which have zero bearing on whether you make a profit, corporate tax "breaks" can also
187 Trex8 : actually the 4 744s ordered, with 6 744Fs was done at the same time as the A330 order so it wasn't like they had A340s AND A330s in the fleet, they w
188 Thorben : I think my language skills are good enough for a non-native speaker. What was wrong in the sentence? Should it have been "from" the throne? What woul
189 Astuteman : I think this is CORRECT. The average "European" knows a sight less about EADS than the average American knows about Boeing! Trust me. Most "Europeans
190 Atmx2000 : Well, Boeing is a much, much older company which sells things under its own name that the public comes into contact with on a regular basis, not to m
191 Post contains images Glareskin : I think you are right Thorben. They really wanted to abuse Airbus for their European purpose. But not only within Europe but indeed (as N79969 probab
192 Astuteman : You're absolutely right. I'll suggest from my own experience that the answer would still be the same, but by a smaller margin. You hit the nail on th
193 Post contains links Trex8 : 30 http://www.heraldnet.com/stories/06/01/11/100bus_airbus001.cfm
194 N79969 : In terms of consumer brand recognition, I would compare Boeing to Airbus and not EADS. In that regard, I would say that the average European probably
195 Thorben : " target=_blank>http://www.heraldnet.com/stories/06/...1.cfm OK, thanks. But how many of those would have been widebodies? I guess less than the 24 th
196 Leelaw : Wasn't Mr. Leahy tacitly admitting in his remarks that the A340 line will "dry-up" without cash incentives or substantial, "couple of billion dollar,
197 Thorben : I don't know. Since they already invested in the A345/6 program and the A350, the combination of the two should not be that expensive. Besides, being
198 Tifoso : Actually, according to Leahy's comments, they are willing to have the A346 as second best to the 773ER, and are willing to make up the difference wit
199 FlyingHippo : Thanks for the date corrections, Trex. I was not aware of BR's 330 order was later than 773ERs. I knew about CI's request to B about 777s, it's reall
200 Thorben : Leahy says a lot. Whether people believe him or not depends on whether they like what he said or not. Come on, what a comparison. The 787 is about ha
201 OldAeroGuy : The most expensive part will be the Trent 1500 development. RR must be sure they will recover their investment for this engine. The Trent 1700 is too
202 FlyingHippo : They're making modifications, they're not redesigning the wing completely. Also, they're just putting extensions on the fuselage, which both A & B kn
203 Glareskin : Believe me there is a lot of special (unfair IMO) treatment to all kinds of firms within the EU! One of the reasons the Dutch voted against in the re
204 Post contains links and images Confuscius : Paying Airlines to Pollute? (Airbus Offers Money In Lieu of Fuel Efficiency) more... http://enplaned.blogspot.com/2006/01...ng-airlines-to-pollute-air
205 N79969 : That is a poor way to characterize what Airbus is doing....if they really wanted to pay polluters, Airbus would be paying airlines to fly vintage B70
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