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Airbus Parent Eads Pounded Over A380 Delays  
User currently offlineBoomBoom From , joined Dec 1969, posts, RR:
Posted (7 years 10 months 2 days ago) and read 3173 times:

Quote:
EADS shares plunged as much as 11.7 percent and touched 20 euros for the first time since the A380 wiring snags pushed the company into financial and management turmoil in the summer.

Debt rating agency Standard & Poor's warned it might cut its rating on EADS on the back of a profit warning and the delays.

Disarray in Europe's biggest industrial project rippled through aviation and beyond, as Dutch parts maker Stork warned of a revenue hit, EADS shareholder DaimlerChrysler said it would review forecasts and bankers predicted a drag on French trade.

Any redistribution of tasks also raises questions over the fate of $3.6 billion in reimbursable launch aid paid by European governments to help develop the A380. Airbus declined to say whether it would have to pay the money back if plants were shut.

http://news.yahoo.com/s/nm/20061004/bs_nm/transport_eads_dc_9

[Edited 2006-10-04 18:34:40]

22 replies: All unread, jump to last
 
User currently offlineAstuteman From United Kingdom, joined Jan 2005, 9979 posts, RR: 96
Reply 1, posted (7 years 10 months 2 days ago) and read 3159 times:
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Quoting BoomBoom (Thread starter):
EADS shares plunged as much as 11.7 percent and touched 20 euros for the first time

Not sure how that's a record low. They touched E18 back in June

"EADS shares plunge" might have been a better title.

Regards


User currently offlineOsiris30 From Barbados, joined Sep 2006, 3192 posts, RR: 25
Reply 2, posted (7 years 10 months 2 days ago) and read 3125 times:

Quoting Astuteman (Reply 1):
Not sure how that's a record low. They touched E18 back in June

"EADS shares plunge" might have been a better title.

 checkmark 



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineBoomBoom From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 10 months 2 days ago) and read 3124 times:

Okay, I changed it to the title of the Reuters article.

User currently offlineShenzhen From United States of America, joined Jun 2003, 1710 posts, RR: 2
Reply 4, posted (7 years 10 months 2 days ago) and read 3106 times:

Wonder if the Russian's buying program has kicked in?

User currently offlineAstuteman From United Kingdom, joined Jan 2005, 9979 posts, RR: 96
Reply 5, posted (7 years 10 months 2 days ago) and read 3106 times:
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Quoting BoomBoom (Reply 3):
Okay, I changed it to the title of the Reuters article.

Thanks.
Message doesn't get any better does it?  Smile

Regards


User currently onlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 6, posted (7 years 10 months 2 days ago) and read 3057 times:
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Quoting BoomBoom (Thread starter):

[Quote=Yahoo News]Any redistribution of tasks also raises questions over the fate of $3.6 billion in reimbursable launch aid paid by European governments to help develop the A380. Airbus declined to say whether it would have to pay the money back if plants were shut.

If Airbus is allowed to walk away from re-paying the A380's RLA I wonder how that will affect the US' stance towards the A350's current RLA allowed under the 1992 agreement, to say nothing of any additional RLA extended to Airbus to allow the program to proceed as scheduled.


User currently offlineShenzhen From United States of America, joined Jun 2003, 1710 posts, RR: 2
Reply 7, posted (7 years 10 months 2 days ago) and read 3056 times:

Quoting Stitch (Reply 6):
If Airbus is allowed to walk away from re-paying the A380's RLA I wonder how that will affect the US' stance towards the A350's current RLA allowed under the 1992 agreement, to say nothing of any additional RLA extended to Airbus to allow the program to proceed as scheduled.

I don't think there is any 1992 agreement. EADS/Airbus can request 100 percent of the A350XWB development cost, if they so desired.

Cheers


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 8, posted (7 years 10 months 2 days ago) and read 3057 times:

Must confess that I'm surprised the other way round.

EADS shares closed in Paris at E21.71. IMO that's incredibly high, given the recent bad news - and the volume of shares traded was also huge, almost 21 million (say 2.5% of the entire company).

I can only think of two possibilities to explain the high volume. Either the German banks are buying big to protect Finkenwerder, or the RUSSIANS are still buying.  Smile



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 9, posted (7 years 10 months 2 days ago) and read 3043 times:

I thought the repayment provisions for RLI (or whatever one wants to call it) were "iron clad" in that these loans MUST be repaid on schedule?


"When all is said and done, more will be said than done".
User currently offlineOsiris30 From Barbados, joined Sep 2006, 3192 posts, RR: 25
Reply 10, posted (7 years 10 months 2 days ago) and read 3003 times:

Quoting NAV20 (Reply 8):
Either the German banks are buying big to protect Finkenwerder, or the RUSSIANS are still buying.

Volume is caused by sellers. The buyers would be the reason the stock price held. And bargain hunters who feel that it can't possibly get any worse for EADS.



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 11, posted (7 years 10 months 2 days ago) and read 2929 times:

Quoting Osiris30 (Reply 10):
Volume is caused by sellers. The buyers would be the reason the stock price held.

With respect, two sides of the same coin. Osiris30. Agreed, lots of sellers - but SOMEONE soaked all those available shares up, or the price wouldn't have held.

Personally I think it's unlikely that it was just small shareholders/mums and dads looking for a bargain.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineBoomBoom From , joined Dec 1969, posts, RR:
Reply 12, posted (7 years 10 months 1 day 23 hours ago) and read 2877 times:

Quote:
With penalties mounting, however, Airbus said that 'four or five' of its contracts with airlines were heading for a loss.

http://www.thisismoney.co.uk/investi...?in_article_id=413299&in_page_id=3


User currently offlineOsiris30 From Barbados, joined Sep 2006, 3192 posts, RR: 25
Reply 13, posted (7 years 10 months 1 day 23 hours ago) and read 2805 times:

Quoting NAV20 (Reply 11):
With respect, two sides of the same coin. Osiris30. Agreed, lots of sellers - but SOMEONE soaked all those available shares up, or the price wouldn't have held.

Personally I think it's unlikely that it was just small shareholders/mums and dads looking for a bargain.

Sorry I didn't come across clearly enough. I was pointing out that lots of folks wanted to sell. The only reason the drop wasn't harder was because *someone* was buying. The bargain hunters comment wasn't meant to indicate they were primary buyers. I agree someone major was buying shares.. there aren't that many bargain hunters.



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 14, posted (7 years 10 months 1 day 23 hours ago) and read 2788 times:

BoomBoom, Airbus have admitted that all A380 deliveries up to 2010 will show a loss.

'Funny way to run a railway' as far as I can see. But at least Streiff isn't doing a Forgeard and 'fabricating' good news, IMO it qualifies as a step in the right direction.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineShenzhen From United States of America, joined Jun 2003, 1710 posts, RR: 2
Reply 15, posted (7 years 10 months 1 day 23 hours ago) and read 2772 times:

Quoting NAV20 (Reply 14):
BoomBoom, Airbus have admitted that all A380 deliveries up to 2010 will show a loss.

I guess in a round about way, Airbus have already admitted that the margins on airplanes post 2010 won't be enough to overcome the pre 2010 losses on some contracts, which gives a little insight into their margins.

Cheers


User currently onlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 16, posted (7 years 10 months 1 day 23 hours ago) and read 2774 times:
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Quoting Shenzhen (Reply 7):
I don't think there is any 1992 agreement. EADS/Airbus can request 100 percent of the A350XWB development cost, if they so desired.

I am quite sure that around 1992 the US and EU entered into an agreement that (grossly simplified) defined how much RLA Airbus could request for existing and future projects and how much of non-commercial aircraft-related monies Boeing received could be used for commercial aircraft projects. The former A350 was bound by that agreement, to the best of my knowledge, as would be the A350XWB.

Now, that being said, I believe the US has unilaterally withdrawn from the agreement in order to allow them to threaten taking RLA to the WTO. To my knowledge, Airbus has been walking somewhat gingerly on RLA for the A350/A350XWB program to circumvent such an action by the US.

Mind you, my memories on the specifics (or the generalities, for that matter), may be incorrect. So those with the "true scoop" are welcome to chime in.


User currently offlineLeelaw From , joined Dec 1969, posts, RR:
Reply 17, posted (7 years 10 months 1 day 23 hours ago) and read 2760 times:

BERLIN (Dow Jones)--Aircraft-maker Airbus, a unit of European Aeronautic Defence & Space Co., will reduce costs for material, quality assurance and administration by 30%, Airbus Chief Executive Christian Streiff said in a newspaper interview.

The comments come as Airbus has yet to outline measures to tackle deepening production problems with its A380 superjumbo.

In an advanced release of an interview to appear in Hamburger Abendblatt newspaper Thursday, Streiff didn't rule out longer working hours, wage cuts and lower Christmas and holiday payments for Airbus employees, according to the newspaper.

"These things aren't yet off the agenda," Streiff was quoted as saying.


http://online.wsj.com/article/BT-CO-20061004-710240.html


User currently offlineCo7772wuh From , joined Dec 1969, posts, RR:
Reply 18, posted (7 years 10 months 1 day 23 hours ago) and read 2735 times:

 confused 

When all is said and done , is the a380 project going to be a 20 billion dollar project ?


User currently offlineShenzhen From United States of America, joined Jun 2003, 1710 posts, RR: 2
Reply 19, posted (7 years 10 months 1 day 23 hours ago) and read 2717 times:

Quoting Stitch (Reply 16):
I am quite sure that around 1992 the US and EU entered into an agreement that (grossly simplified) defined how much RLA Airbus could request for existing and future projects and how much of non-commercial aircraft-related monies Boeing received could be used for commercial aircraft projects. The former A350 was bound by that agreement, to the best of my knowledge, as would be the A350XWB.

If one party walks away from an agreement, which was defined and allowed within that agreement, then there is no longer an agreement.

The 1992 agreement is history.

The A350 was cancelled. Airbus may or may not launch the A350XWB. If they do, there is nothing that could stop them from requesting 100 percent funding from those governments that are willing to paying it (less the WTO).

Cheers


User currently onlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 20, posted (7 years 10 months 1 day 23 hours ago) and read 2697 times:
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Quoting Shenzhen (Reply 19):
The A350 was cancelled. Airbus may or may not launch the A350XWB. If they do, there is nothing that could stop them from requesting 100 percent funding from those governments that are willing to paying it (less the WTO).

Well if Airbus tries it, I expect the US will take them to the WTO. And if Airbus is facing cash-flow issues through the early 2010's, a WTO injunction on RLA or, worse, a post-RLA ruling requiring them to return the monies, could impact the timeframe of the A350XWB, A320E, and A320RS programs.

I'm not sure Airbus (much less EADS) wants to risk that. Boeing certainly has less to lose in the near-term from a blanket ruling declaring the 1992 agreement illegal and forcing both companies to compete solely on "market capital" for their projects.


User currently offlineShenzhen From United States of America, joined Jun 2003, 1710 posts, RR: 2
Reply 21, posted (7 years 10 months 1 day 23 hours ago) and read 2656 times:

Quoting Stitch (Reply 20):
I'm not sure Airbus (much less EADS) wants to risk that. Boeing certainly has less to lose in the near-term from a blanket ruling declaring the 1992 agreement illegal and forcing both companies to compete solely on "market capital" for their projects.

All I am saying is that there is no longer an agreement. If there was, there wouldn't be a suit filed with the WTO.

Cheers


User currently offlineBoomBoom From , joined Dec 1969, posts, RR:
Reply 22, posted (7 years 10 months 1 day 22 hours ago) and read 2581 times:

Quoting Leelaw (Reply 17):
will reduce costs for material, quality assurance and administration by 30%

Quality assurance???

That is penny wise and pound foolish.

Quality assurance saves you money in the long run.

[Edited 2006-10-04 20:22:32]

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