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Last-Ditch Bid To Save SQ Order For A350  
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Posted (8 years 7 months 3 weeks 3 days 17 hours ago) and read 12243 times:

Airbus will be watching the results of a Singapore Airlines (SIA) board meeting carefully this week, hoping the carrier will again delay ordering new twinjets and instead await more details of the radically revised A350 offering.

http://www.flightglobal.com/Articles...+Singapore+Airlines+order+for.html

64 replies: All unread, showing first 25:
 
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 1, posted (8 years 7 months 3 weeks 3 days 17 hours ago) and read 12207 times:

There is a chance that SQ might hold off on ordering the B787, but I don't expect them to hold off on ordering the B777-200LR.

User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4166 posts, RR: 36
Reply 2, posted (8 years 7 months 3 weeks 3 days 16 hours ago) and read 12034 times:

As the other one was apparently deleted...:

Quoting Lumberton (Reply 1):
Why would SQ wait that long? Given the experience with the EIS delays on the A380, Airbus is asking a top customer to take the 'leap of faith' again. If Boeing can offer deliver slots for the 787-9 in 2010 (or earlier!) then why would it be in SQ's best interest to delay (again)? Do they have certitude that Airbus' latest edition of the A350 could "leapfrog" the 787? Why sacrifice at least two (probably more) of greatly enhanced cash flows from operating a more efficient aircraft?

At this point nobody is able to say if Boeing will be able to deliver the B787 in the promised time frame to the promised specifications. I don't buy the "everything will go nice and smooth" PR - it is an industrial project, and you can always have problems, as for example experienced by Airbus with the A380.

Why would SQ wait?

1. Depends what they actually need. In the recent past most has been pointing towards the B787-1000, which won't be in before 2012 last thing I read. That means that the delta between the A350 (in whatever variation) will be comparably marginal with about 2 years.

2. They have several times stated that they actually need something to replace the 777-200s on the short Intra-Asia runs. Airbus could for example offer A330-300s as an interim solution (which could stay...) for this mission profile, and could bring in the A350 at a later stage which not only replace these A333 but a full load of B777s as well.

3. Price. The 787 is well booked for the near future, which likely means that Boeing is demanding a premium at the moment, and can likely forget anything like a "launch discount". Now consider how it looks on the other side of the Atlantic...

-------------
In the end it will be a financially driven decision - as (nearly) always. The 777-200s - not perfect for the intended mission profile - are not bad and could stay 2 or 3 years longer if needed, without making such a big financial impact.



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 3, posted (8 years 7 months 3 weeks 3 days 16 hours ago) and read 12000 times:

Quoting Zvezda (Reply 1):
There is a chance that SQ might hold off on ordering the B787

SQ's decision tomorrow may make or break Airbus's alleged proposal for a "radically redesigned" A350. If SQ goes ahead with a decision to place a 787 order despite Airbus's eleventh-hour heroics, won't the new and improved A350 family concept be DOA?


User currently offlineEI321 From Iraq, joined Jul 2009, 0 posts, RR: 0
Reply 4, posted (8 years 7 months 3 weeks 3 days 16 hours ago) and read 11928 times:

[quoteLumberton=reply=2]Quote(Reply 1):
Why would SQ wait that long? Given the experience with the EIS delays on the A380, Airbus is asking a top customer to take the 'leap of faith' again. If Boeing can offer deliver slots for the 787-9 in 2010 (or earlier!) then why would it be in SQ's best interest to delay (again)? Do they have certitude that Airbus' latest edition of the A350 could "leapfrog" the 787? Why sacrifice at least two (probably more) of greatly enhanced cash flows from operating a more efficient aircraft? [/quote]

Some suggestions Lumberton

Why would they wait so long? It may not be that long at all. 787 production is apparently sold out for the first three years as is. Maybe SQ management know something we dont.

SQs 773s and most of the 772s are relativly new, they may not want to replace them so soon. This apparent A350-10 sounds like it would not only match the 787 line, but might put the 777 line to bed also.

Like is said above, if airbus can offer 333s as an interm then that may be attractive also as the 333 is much more efficient than the 772 on shorter routes.

I still think SQ is likely to order 772LRs in the meantime though.


User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 5, posted (8 years 7 months 3 weeks 3 days 16 hours ago) and read 11909 times:

Quoting Leelaw (Reply 3):

SQ's decision tomorrow may make or break Airbus's alleged proposal for a "radically redesigned" A350. If SQ goes ahead with a decision to place a 787 order despite Airbus's eleventh-hour heroics, won't the new and improved A350 family concept be DOA?

I think that's placing too much weight on a single order. If Airbus were to lose both SQ and EK while not picking up any other blue-chip carriers, then they would need to rethink their strategy. SQ alone is not a reliable indicator of what other airlines will do.


User currently offlineDalecary From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11805 times:

Quoting Flying-Tiger (Reply 2):
1. Depends what they actually need. In the recent past most has been pointing towards the B787-1000, which won't be in before 2012 last thing I read. That means that the delta between the A350 (in whatever variation) will be comparably marginal with about 2 years.

My understanding is that the 789 is the 787 model most likely to be ordered in large numbers. The 788/-10 could also figure.


User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 7, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11681 times:

Quoting Dalecary (Reply 6):
My understanding is that the 789 is the 787 model most likely to be ordered in large numbers. The 788/-10 could also figure.

I've heard that too, but I'm not convinced. SQ need a smaller, low-CASM aircraft to increase frequencies to daily for many european and middle-eastern destinations, in order to raise yields. The B787-8 fits that requirement. The B787-9 and B787-10 also satisfy many of SQ's requirements. I think the earlier availability of the B787-8 will play a role. The first of SQ's B777-200ERs will be due for retirement about 2009.


User currently offlineEI321 From Iraq, joined Jul 2009, 0 posts, RR: 0
Reply 8, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11640 times:

Quoting Dalecary (Reply 6):
My understanding is that the 789 is the 787 model most likely to be ordered in large numbers. The 788/-10 could also figure.

So far the breakdown is as follows:

787-3: 43
787-8: 296
787-9: 44
787-10: not yet launched
TBA: 10

TOTAL: 393 (350 firm, 43 pending)

[Edited 2006-05-08 14:47:55]

User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 9, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11616 times:

Does begin to look like a re-run of the Qantas thing - Airbus making a 'final offer' to try to delay things. My money's on 788s and 772LRs - with an 'each way' bet on SIA being launch customer for the 748.


"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 10, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11589 times:

Quoting EI321 (Reply 8):
TOTAL: 393 (350 firm, 43 pending)

Is the Primaris "commitment" still pending?


User currently offlineEI321 From Iraq, joined Jul 2009, 0 posts, RR: 0
Reply 11, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11589 times:

Quoting Leelaw (Reply 10):
Is the Primaris "commitment" still pending?

Yes I included that, for 20 788. They have 15 options also IIRK.


User currently offlineBoeingBus From United States of America, joined May 2004, 1597 posts, RR: 17
Reply 12, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11493 times:

With all these now new delays in launching yet another version of the A350...I bet all the airline directors and shareholders that approved the purchase of 787's are patting themselves on the back... and the those who opted for the A350 are kicking themselves...

I bet is that SQ will opt for the 787. I have my doubt on how a wider Al-Li fuselage can be more efficient that an all composite fuselage... but in Toulouse it's all "smoke and mirrors" to me...



Airbus or Boeing - it's all good to me!
User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 13, posted (8 years 7 months 3 weeks 3 days 15 hours ago) and read 11462 times:

Has SQ ever hinted at whether or not it has made refundable deposits to hold early 787 delivery slots? I'm wondering if SQ has indeed made refundable deposits to hold 787 delivery slots, whether at this point deferring a decision between ordering the A350 & 787 would require relinquishing relatively early slots (2008-2011)?

User currently offlineStitch From United States of America, joined Jul 2005, 31437 posts, RR: 85
Reply 14, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11415 times:
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Okay, this is probably going to sound silly, but if SQ wants something smaller then the 772ER for intra-Asia in the near-term, and they want the 787, why not take some 763ERs or 764ERs? Sure, the A330 is the better plane, but if it's a short-term lease...

Boeing could certainly use some more sales to keep the line going, could offer pretty close to "at cost" pricing, and even with Boeing slowing production to a crawl, if SQ needs planes "right now" I imagine Boeing can work something out with LA or NH to shift their deliveries around.


User currently offlineDAL767400ER From , joined Dec 1969, posts, RR:
Reply 15, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11344 times:

Quoting EI321 (Reply 4):
Why would they wait so long? It may not be that long at all. 787 production is apparently sold out for the first three years as is. Maybe SQ management know something we dont.

Well, the 787 is undoubtly sold out for the first years, but then again, Boeing will decide this year whether they will open a second 787 line, which would open up space for quite a few additional orders. Boeing's decision on this is still up for some time (late Q3 IIRC), but if they can gather the interest of airlines and perhaps LOIs or MOUs, they might announce the second line sooner than later, and as such attract the interest of even more airlines.


User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 16, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11344 times:

Quoting Stitch (Reply 14):
Okay, this is probably going to sound silly, but if SQ wants something smaller then the 772ER for intra-Asia in the near-term, and they want the 787, why not take some 763ERs or 764ERs?

SQ don't want something smaller than the B777-200ER at any cost. They want something smaller than the B777-200ER with low CASM. The B787-8 is attractive to SQ not only because it is smaller than the B777-200ER but because it will have a lower CASM (at least when configured 9Y, which SQ would surely do).


User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 17, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11262 times:

Quoting Flying-Tiger (Reply 2):
As the other one was apparently deleted...:

I can't understand why it was deleted. There was nothing inflamatory. Perhaps the Mod made a mistake? I never received an e-mail notification either.... Anyway, than you for resurrecting my post!

Quoting Flying-Tiger (Reply 2):
At this point nobody is able to say if Boeing will be able to deliver the B787 in the promised time frame to the promised specifications. I don't buy the "everything will go nice and smooth" PR - it is an industrial project, and you can always have problems, as for example experienced by Airbus with the A380.

You bet. But Boeing has a significant head start. I can't see SQ waiting any longer. They can do the "we'll revisit the A350 later" thing, but in the meantime, delivery slots are going to their fiercest competitors.

Quoting Flying-Tiger (Reply 2):
2. They have several times stated that they actually need something to replace the 777-200s on the short Intra-Asia runs. Airbus could for example offer A330-300s as an interim solution (which could stay...) for this mission profile, and could bring in the A350 at a later stage which not only replace these A333 but a full load of B777s as well.

SQ didn't take the A330 option in the past. Why now? That means putting up with higher fuel burn penalties (and costs) vis a vis the 787. I suspect Boeing as a few slots they may be able to offer in 2010, if not 2009.

[Edited 2006-05-08 15:38:35]


"When all is said and done, more will be said than done".
User currently offlineA319XFW From , joined Dec 1969, posts, RR:
Reply 18, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11170 times:

Quoting DAL767400ER (Reply 15):
Well, the 787 is undoubtly sold out for the first years, but then again, Boeing will decide this year whether they will open a second 787 line, which would open up space for quite a few additional orders.

I think the one thing Boeing is considering about opening another line is, if it will be sustainable - it might bring short term gains, but what will happen to it in 10 years time when the initial rush is over and they have got over-capacity. See what happened post 9-11 when they had too much capacity. But that admittedly was a extreme case.

It says that Leahy and Humbert were there because of the A350 - I'm guessing they were also there to update them on the progress of the A380, too.


User currently offlineWedgetail737 From United States of America, joined Aug 2003, 5951 posts, RR: 6
Reply 19, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11148 times:
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For those in the United States, it's already May 9th in Singapore. Maybe, we'll hear something tonight on what SIA may do.

User currently offlineBoeingFever777 From United States of America, joined Jul 2009, 409 posts, RR: 53
Reply 20, posted (8 years 7 months 3 weeks 3 days 14 hours ago) and read 11122 times:

The SQ board meets tomorrow, so will we know something tomorrow or later in the week or next week?


Faire du ciel le plus bel endroit de la terre.
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 21, posted (8 years 7 months 3 weeks 3 days 13 hours ago) and read 11098 times:

Quoting BoeingFever777 (Reply 20):
The SQ board meets tomorrow, so will we know something tomorrow or later in the week or next week?

I would not be surprised if SQ were to make an announcement on the 9th.


User currently offlineDAL767400ER From , joined Dec 1969, posts, RR:
Reply 22, posted (8 years 7 months 3 weeks 3 days 13 hours ago) and read 11052 times:

Quoting A319XFW (Reply 18):
I think the one thing Boeing is considering about opening another line is, if it will be sustainable - it might bring short term gains, but what will happen to it in 10 years time when the initial rush is over and they have got over-capacity.

That could theorethically happen, but then again, looking at the current orders for the 787 (and A350 for that matter), it appears the majority of those planes on order are for growth, and not for a 1-to-1 replacement of current types. It is highly speculative, but look at all the demand AA, UA, CO, DL, NW and US could have in around 5 years for planes that will just be replacements? 100+ 787s for AA and DL each, roughly 100 A350s or 787s for UA, 40 787s for CO, and so on. Admittedly, these are extreme large numbers, but they prove that there will still be enough demand, even if Boeing were to open a second line. Not to disregard of course the smaller widebody operators like AM, LAN or CSA, which will likely buy either one of the competing products in the future as well, and all those numbers combined can indeed add up pretty good.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 23, posted (8 years 7 months 3 weeks 3 days 13 hours ago) and read 10951 times:

About the second line, I think 'payback' comes into it. Boeing have sold 350 787s already - enough, probably, to recoup the entire development cost. A second line, with no current competition, would be an absolute goldmine. Boeing could hope literally to sell ANOTHER 350 before Airbus can organise a competitor.

Even after that, they would be in a position to compete for a time by offering low prices on the 787 while still turning a profit. My guess is that they are already doing that with the 737, which is currently more than holding its own against the A320, even though the A320 is arguably the better aeroplane.

Beyond that, the profits on the 787 and 777 lines will give Boeing the R & D funds to develop both Y3 and Y1 while still paying good dividends to shareholders; and even fund an upgraded or 'compositised' 777.

I think Airbus (if it scraps the A350 and concentrates on producing a truly competitive design, even if it takes six or seven years) is finally doing the right thing. But it's going to be a long, hard road back to parity.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineJoni From , joined Dec 1969, posts, RR:
Reply 24, posted (8 years 7 months 3 weeks 3 days 13 hours ago) and read 10886 times:

Quoting NAV20 (Reply 23):


Beyond that, the profits on the 787 and 777 lines will give Boeing the R & D funds to develop both Y3 and Y1 while still paying good dividends to shareholders; and even fund an upgraded or 'compositised' 777.

Provided they use the same program structure as with the 787, meaning lots of risk-sharing partners. You need to keep in mind that Boeing has outsourced a large chunk of the 787's value, and with it a large chunk of the revenues.


25 Keesje : I don't think parity would be the goal. From comments earlier on from SQ it became clear SQ doesn't want a solution for 2012 or later (787 available
26 NAV20 : Easily organised, Joni. The sub-contractors turn a decent profit and the proprietor gets the cream on top. Easy as pie when there's no competition. Tr
27 Post contains images Manni : Let's have some fun with these figures... At a development cost of US$ 8000000000, if everything goes as planned, each sold 787 would need to contrib
28 Zvezda : Manni is right. There is no way Boeing would have spread the B787's development costs over only 350 units. I might believe 500, but not fewer. However
29 Poitin : If they are selling 787s to anyone at $65M and not losing money, Airbus has a problem. The list price for the 783 is $132-136M, and so that is 50% of
30 NAV20 : Manni, Zvezda, Qantas made it clear that their initial tender related only to the airframes, and that they would be tendering the engines separately.
31 Stitch : Does the A333 have better CASM then the 772ER? And does it have better CASM then the 772A?
32 Zvezda : Thanks for clearing that up. The B777-200 and B777-200ER have slightly lower CASM than the A330. Typically, for any given generation of technology an
33 TIA : Which A330 though? The A333 is about the same size as the 772.
34 Wjcandee : It could be that the most profitable thing that Primaris could do for its investors (as opposed to actually trying to operate its...er..."challenging"
35 Post contains images Ken777 : This appears to be the second trip to the well for Airbus. Didn't they go to SQ with grand benefits of holding off on the SQ 7E7 purchase because of t
36 Poitin : Not to mention the delivery of an A380 or two as well. One possibility. This is a definite possibility. Boeing wants this order bad, and if they have
37 Post contains links Keesje : If consistent that also means that anything spend on the Sonic Cruiser is also written off? And orders also. I think you are too pessimistic. Incorre
38 Leelaw : R & D expenses are generally expensed as incurred, so there won't be write-offs per se.
39 Post contains links Scbriml : That's all well and good assuming that Boeing has actually held Primaris's "commitments" open. In all likelyhood, given the fact that Primaris hasn't
40 Post contains images Astuteman : In reality, the key advantage of the technology transfer situation is more related to risk reduction and ease of implementation. The "technology" mig
41 Brendows : If I've understood things correctly, those slots has been lost..
42 Zvezda : The chart you cited shows them with the same CASM.
43 11Bravo : Anybody know what time this Board meeting is? Currently 0500 hours Tuesday morning in Singapore.
44 Post contains links Keesje : No, it isn´t. A more recent sources gives an even bigger casm difference between A330 and B777. I think it is widely accepted in the industry the A3
45 Post contains images F4N : Keesje: Despite your conjecture, SQ has turned down the 330 at least 2 times I can think of, possibly 3. You would think they know what they're doing
46 Intothinair : That means it's already been, its 9 30am now? Why haven't we heard anything?
47 Post contains images Boeing767-300 : Ken777 I think you have summed up the whole argument in one sentence The A370 is a blocking move to those who have not already gone to 787!!!
48 Kaitak744 : Well, the 777-200 seats more people than the A330-300, and it carries a greater amount of cargo. So, the finaly cost difference is very small.
49 Keesje : Indeed, but it also carries a fixed addition 20.000kg / 43.000lb of non revenu metal..
50 Post contains links and images Manni : What Geoff Dixon said at that time could be spinned anyway you like... but even so, following your spin... It doesn't make any difference, Boeing wou
51 Dalecary : And Manni, I suppose your data is clearcut that QF played US$65m for each 787? Just the sort of heresay you typically criticise others for. You and I
52 EI321 : That head guy at Qantas said in the press release afterwards that there was virtually no difference on price betewwn the two offers. Thats really the
53 Dalecary : Yes, but that could mean purchase price. I believe modelling the 2 types in QF revenue service over a 20 year period favoured the 787 significantly.
54 EI321 : Thats not what I quoted you on. You were were refering to purchase price:
55 Post contains links NAV20 : With all due respect, he did mention a few other criteria governing their choice:- "Qantas said it chose the 787 over the Airbus A350 because the Boe
56 Post contains links and images Manni : No, once again, a little search goes a long way. http://www.flightglobal.com/Articles...o+develop+Trent+1700+for+A350.html
57 Leelaw : I think NAV20 meant engine interchangability/common pylon feature of the 787?
58 NAV20 : Manni, that only says that RR are 'developing' an alternative engine for the A350. Care to guess how much priority they're giving the project now that
59 Post contains images Brendows : I believe you're right Leelaw I understood this as there were just a small difference in the sales price, but the 787 was chosen [Edited 2006-05-09 1
60 ClassicLover : Yes, because of earlier delivery slots, and the quote above - the 787 flies further, faster, burns less fuel, and has lower maintenance costs. Howeve
61 Timboflier215 : Isn't the CASM only really relavant if you can expect to fill the plane up to capacity? If the 777 is hauling around the number of people who can fit
62 Post contains links Manni : Judging by his reply, apparently not. In a market that is estimated at 3500 aircraft over he next 20 years with only 2 different manufacturers offeri
63 11Bravo : That's the beauty of a statement like this. It can be interpreted to mean almost anything. It's all things to all people. I personally take it to mea
64 Post contains images ClassicLover : Bulk discount. You order anything in bulk and you get a discount. QF order in bulk, they get a discount from Boeing. Boeing's suppliers know they hav
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