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How Will The A 380 Delay Affect EK's Expansion?  
User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Posted (8 years 4 months 2 weeks 2 days 12 hours ago) and read 3824 times:

Since we all know that EK has ordered 43 frames of the whale. A one year delay has totally thrown EK's expansion plan offtrack!!! Alot of their scheduled New Destinations will be postponed until they have enough equipment!!

So how do you think this will affect EK's expansion as a whole? Is it only a one year delay or will EK lease or buy 77W's to cover for the lack of planes? Will they go ahead with their new destinations knowing that some of them are in North and South America?

What is EK's next step?

20 replies: All unread, jump to last
 
User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 1, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3812 times:

The A380 situation is a big issue for the type's biggest customer, EK, and there is no doubt that the EK management is reviewing all of its options at this very moment and trying to come up with a comprehensive plan to compensate for the delayed delivery of its A380s.

Expect the following:

1. The introduction of new destinations will be delayed in some cases. Also, there was some talk that EK would use some of the A380s for a high capacity, lower fare long haul carrier.....these plans are probably on hold for the near term future.

2. EK will hold on to its aircraft for longer periods than might have originally been expected; many expected EK to begin rationalizing its fleet with some 772As and the leased in A343s expected to be among the first EK aircraft to be retired. Due to the A380 situation, these aircraft are going nowhere for the time being.

3. EK may be working with leasing companies to see what aircraft may be available in the near-term future - however, there is probably not much available.

4. EK will recieve some type of compensation from Airbus - it will be interesting to see a revised A380 delivery schedule.


Longer term, there is the issue of the EK A346s that no one seems to be talking about.....EK chose to delay delivery of those aircraft, now Airbus is again delaying the delivery of the A380s.....so what is the result? While the two issues are not directly related, both situations involve Airbus and EK, and the fact is that EK will be receiving far fewer aircraft from Airbus in the coming years, so discussions must be going on. This can go any which way.

And, there is the EK and the 787 or A350/70 situation.....and how will the A380 situation affect that competition? We could see EK follow SQ and place an order for the 787 very quickly, or will Airbus try to take a whole bunch of negatives and try to land EK as the launch customer for the new and improved A3-something? You can almost hear the discussions.....Airbus saying to EK: look, we screwed up with the A380 deliveries, the A350 was not a great offering, and the A346 is going nowhere......give us another chance, EK, and lets wipe the slate clean - why dont you order 50 A350/70s and we will let you out of your A346 committment, and give you double compensation for the A380 delay that you can use for as a deposit toward the new A350/70 airplanes, and we will give you a 50% launch customer discount for the A350/70s...we all win!!!

Interesting times.....stay tuned.


User currently offlinePavlin From , joined Dec 1969, posts, RR:
Reply 2, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3794 times:

Quoting EK156 (Thread starter):
whale

Ha. Ha. They don't let you use that word again. You face 1 month ban.


User currently offlineCO737800 From Canada, joined Dec 2003, 545 posts, RR: 1
Reply 3, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3794 times:

"You can almost hear the discussions.....Airbus saying to EK: look, we screwed up with the A380 deliveries, the A350 was not a great offering, and the A346 is going nowhere......give us another chance"

I would have to say 3 strikes and your out


User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Reply 4, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3786 times:

Quoting Pavlin (Reply 2):
Ha. Ha. They don't let you use that word again. You face 1 month ban.

Opppsss... I didn't know that?


User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 5, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3786 times:

Quoting CO737800 (Reply 3):
I would have to say 3 strikes and your out

So would I........but we are talking about billions of dollars/euros here and anything can happen.


User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Reply 6, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3774 times:

But EK needs planes badly now and they were relying greatly on the A 380's. So what can they do to get planes and FAST!!!

And if they get any planes, what would happen to the original A 380 order? How will it be put back into the system? This seems like a whole lot of a messy situation!!!!


User currently offline11Bravo From United States of America, joined Feb 2005, 1720 posts, RR: 10
Reply 7, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3750 times:

Quoting Dutchjet (Reply 1):
You can almost hear the discussions.....

..., and you can almost hear the answer as well I think.

"Well that's certainly an interesting offer, but quite honestly we're not interested in being a launch customer for another Airbus product at this time. The delays in the A380 program have caused us to completely revise our fleet acquisition and expansion plans and we're not willing to risk similar problems with our mid-size sector. Now if you'll excuse me, I have to catch a flight for a meeting in Seattle."



WhaleJets Rule!
User currently offlineAirlineAddict From United States of America, joined Jan 2005, 420 posts, RR: 1
Reply 8, posted (8 years 4 months 2 weeks 2 days 11 hours ago) and read 3733 times:
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Quoting Dutchjet (Reply 1):
Interesting times.....stay tuned.

With the delay in aircraft deliveries, the A346s could be an expedient way to expand the fleet temporarily. What is the current delivery time for 77Ws vs the A346? The A346s bad fuel economics could potentially be offset by a very sweet "mea culpa" deal from Airbus.


User currently offlineJayinKitsap From United States of America, joined Nov 2005, 769 posts, RR: 1
Reply 9, posted (8 years 4 months 2 weeks 2 days 10 hours ago) and read 3685 times:

I had a hard time tracking down the source but my recollection of original schedule of deliveries (before the 1st delay and production along with the current Airbus schedule announced on the 13th is:

Original Revised Shortfall
First Delivery April 06 Dec 06
Production 2006 8 1 -7
Production 2007 28 9 -19
Production 2008 28 19 -9
Production 2009 28 23 -5
Airbus was discussing a 4 per month production rate or 48 per year by around 2009.

So the 30th plane delivered moved from 4Q 07 to 1Q 09 18 months late

By the end of 2009 there were originally 92 expected to be delivered, now it is 52 delivered, a 40 plane shortfall and the rate in 2010 will probably be 28 not 48 planes. So the 100th plane will be late by almost 2 years.

That is the crux of the impact on EK.


User currently offlineMham001 From United States of America, joined Feb 2005, 3684 posts, RR: 3
Reply 10, posted (8 years 4 months 2 weeks 2 days 10 hours ago) and read 3685 times:

Whats getting missed is that it's not just a one year delay. Thats only for the first plane. As I understand it, many of the later planes will be delayed for years.

edited:Jay just beat me to it.

[Edited 2006-06-17 21:21:43]

User currently offlineNWDC10 From , joined Dec 1969, posts, RR:
Reply 11, posted (8 years 4 months 2 weeks 2 days 10 hours ago) and read 3671 times:

I believe EK will cancell "some" A380's and NOT get all 43 frames but instead get more 777's. Robert NWDC10

User currently offlineDutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 57
Reply 12, posted (8 years 4 months 2 weeks 2 days 10 hours ago) and read 3655 times:

Quoting JayinKitsap (Reply 9):
So the 30th plane delivered moved from 4Q 07 to 1Q 09 18 months late



Quoting JayinKitsap (Reply 9):
So the 100th plane will be late by almost 2 years



Quoting Mham001 (Reply 10):
Whats getting missed is that it's not just a one year delay. Thats only for the first plane. As I understand it, many of the later planes will be delayed for years.

I must admit that I did not fully comprehend this very very important point - in situations such as this, the manufacturer usually tries to "catch up" to compensate for initial delays, that is not the case here.

The continued delivery delays is likely far more critical to the airlines than the initial EIS delay.


User currently offlineKhobar From United States of America, joined Mar 2006, 2379 posts, RR: 4
Reply 13, posted (8 years 4 months 2 weeks 2 days 10 hours ago) and read 3651 times:

Quoting Pavlin (Reply 2):
Ha. Ha. They don't let you use that word again. You face 1 month ban.

There were some complaints not long ago, but I thought the moderators had decided not to cave into the select few. Has this changed?


User currently offlineKen777 From United States of America, joined Mar 2004, 8346 posts, RR: 9
Reply 14, posted (8 years 4 months 2 weeks 2 days 8 hours ago) and read 3575 times:

It looks like it might be Boeing's turn in the sun for EK.

First the 787-10's formally announced an ordered next month to start the air show off with a bang.

Then some 777s to fill the most pressing needs.

For the longer term the 748i looks to be just as good as the 380 for New Destinations and EK can probably start getting deliveries before they get the first half of their original order.

In terms of reducing orders from Airbus, I would bet that there are some attractive cancellation clauses in the agreement as well as some attractive compensation clauses. EK can take care of "excess" 380s (those that would be delivered too far down the line) as well as 346s with Airbus probably still having to pay some compensation on delivery and performance guarantees.

I believe that EK now has an open field to play on and will use this to determine what is best for them. The 787 looks very good, the 777 (if decent slots are available) will be attractive. That leaves the 380. It's lost a bit of it's shine and the 748i has been polished up pretty well. I think anything is possible with EK today.


User currently offlineMptpa From United States of America, joined Feb 2006, 546 posts, RR: 0
Reply 15, posted (8 years 4 months 2 weeks 2 days 5 hours ago) and read 3500 times:

Quoting 11Bravo (Reply 7):
Now if you'll excuse me, I have to catch a flight for a meeting in Seattle."

or it would go something like " I am running late for a meting with Alan and Scott, but thanks for the offer and we will take that into advisement and inform the offer to our attorneys!"


User currently offlineSllevin From United States of America, joined Jan 2002, 3376 posts, RR: 6
Reply 16, posted (8 years 4 months 2 weeks 2 days 1 hour ago) and read 3436 times:

Quoting EK156 (Thread starter):
So how do you think this will affect EK's expansion as a whole?

I think EK's expansion has already cooled -- thus the previous leasing of some aircraft (to 9W) and the deferral of the A346's. Thus, despite the strong words, it's not clear these delays will do anything but allow EK to reduce their A380 order to 'right size' it.

Steve


User currently offlineJohnny From Sweden, joined Jan 2008, 0 posts, RR: 0
Reply 17, posted (8 years 4 months 2 weeks 1 day 23 hours ago) and read 3371 times:

I think the most logical solution offered by Airbus to fill at least a part of the gap is to deliver the ordered A346 to Emirates and take them back as soon as the A388s are delivered.

Emirates (United Arab Emirates)">EK can start all new routes and can increase their capacity on these existing routes with the delivery of the A388.

Crew conversions from A346 to A388 are simple as well.

[Edited 2006-06-18 07:54:41]

[Edited 2006-06-18 07:55:31]

User currently offlineCarpethead From Japan, joined Aug 2004, 2972 posts, RR: 3
Reply 18, posted (8 years 4 months 2 weeks 1 day 21 hours ago) and read 3309 times:

Perhaps EK is lining up for a bid to AC's A343/A345s when they start taking 777s starting next year.
Otherwise, there is almost a non-existing market for second-hand A340/A332/777s with powerplants favorable to its existing fleet.


User currently offlineJohnny From Sweden, joined Jan 2008, 0 posts, RR: 0
Reply 19, posted (8 years 4 months 2 weeks 1 day 21 hours ago) and read 3297 times:

@ Carpethead


Yes, that could be a first step to fill the gap.So probably Emirates ends with AC A343/A345 plus their own ordered but delayed A346 as an interim solution to start all the new routes.

The AC A345 could stay in the fleet
The A346 will be returned when the A388 enters service
The AC A343 will be replaced by the B787-10 or A350/370

Johnny  Smile


User currently offlineEurostarVA From Bahrain, joined May 2002, 1296 posts, RR: 7
Reply 20, posted (8 years 4 months 2 weeks 1 day 21 hours ago) and read 3280 times:

Quoting Sllevin (Reply 16):
I think EK's expansion has already cooled -- thus the previous leasing of some aircraft (to 9W) and the deferral of the A346's. Thus, despite the strong words, it's not clear these delays will do anything but allow EK to reduce their A380 order to 'right size' it.

I don't think EK's expansion has cooled. If you look at the past few years, they've consistently added 4 to 5 new destinations per year, mix of regional and long haul routes.

So far, there is no indications of a slow down in the number of new destinations added. As a matter of fact, the delayed A380s will mean other smaller aircraft originally planned to be freed up for new destinations (330s, 340s, 777s) will remain busy, thus constraining Emirates' growth and potentially costing the airline billions of dollars in lost revenue over the 2006-2010 period.

Things are really not looking good for Airbus.



If there is a will, there is a way
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