Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Air Europa Re-Affirm A350 Order  
User currently offlinePanAm_DC10 From Australia, joined Aug 2000, 4097 posts, RR: 90
Posted (7 years 4 months 2 weeks 5 days 3 hours ago) and read 3531 times:
AIRLINERS.NET CREW
COMMUNITY MANAGER

Air Europa the first Spanish to sign for the A350 have re-affirmed their intention to stay with the model.

By Thomas Mulier

Dec. 6 (Bloomberg) -- Air Europa SA, the first Spanish airline to order A350 planes from Airbus SAS, wants compensation from the planemaker for the delay in their delivery, El Economista said, citing people at the company it didn't name.

Air Europa will keep its order for 10 planes even though they'll be at least two years late, the newspaper said.

The Spanish airline will seek either a discount on the price or ask Airbus to provide substitute planes until the A350s are delivered, the newspaper said.


(El Economista 12-6 13) See http://www.eleconomista.es

[END - Fair use excerpt http://www,bloomberg.com

2 years late? I assume they had 2011 as initial delivery. Pleasing to see a carrier re-affirm their commitment now that the Industrial Launch has been authorised

Regards, PanAm_DC10


Ask the impossible to achieve the best possible
14 replies: All unread, jump to last
 
User currently offlinePolymerPlane From United States of America, joined May 2006, 991 posts, RR: 3
Reply 1, posted (7 years 4 months 2 weeks 5 days 3 hours ago) and read 3523 times:

It's gonna be a hell for compensation negotiations though.

Cheers,
PP



One day there will be 100% polymer plane
User currently offlineRedFlyer From United States of America, joined Feb 2005, 4252 posts, RR: 29
Reply 2, posted (7 years 4 months 2 weeks 5 days 3 hours ago) and read 3523 times:

Quoting PanAm_DC10 (Thread starter):
wants compensation from the planemaker for the delay in their delivery

Not a good way for Airbus to start off a program by having to pay compensation out the gate, but, hey, at least compensation is better than having to remove the order from their books.



I'm not a racist...I hate Biden, too.
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3581 posts, RR: 10
Reply 3, posted (7 years 4 months 2 weeks 5 days 2 hours ago) and read 3486 times:

How can you reaffirm a purchase intention when you still have not agreed to pricing/compensation and terms? Heck, does anyone even know the plane's significant specifications yet?

Looks to me like Air Europa just wants a little attention.


User currently offlinePanAm_DC10 From Australia, joined Aug 2000, 4097 posts, RR: 90
Reply 4, posted (7 years 4 months 2 weeks 5 days 2 hours ago) and read 3373 times:
AIRLINERS.NET CREW
COMMUNITY MANAGER

Quoting DLPMMM (Reply 3):
How can you reaffirm a purchase intention when you still have not agreed to pricing/compensation and terms? Heck, does anyone even know the plane's significant specifications yet?

That's a valid point however Air Europa signed a firm contract and there is a "twist" to their order contract which I cannot supply a link to.

Regards, PanAm_DC10



Ask the impossible to achieve the best possible
User currently offlineSAS A340 From Sweden, joined Jul 2000, 764 posts, RR: 0
Reply 5, posted (7 years 4 months 2 weeks 5 days 2 hours ago) and read 3373 times:

Quoting DLPMMM (Reply 3):
Looks to me like Air Europa just wants a little attention

 checkmark 



It's not what u do,it's how u do it!
User currently offlineAirblue From San Marino, joined May 2001, 1825 posts, RR: 11
Reply 6, posted (7 years 4 months 2 weeks 5 days 2 hours ago) and read 3316 times:

I think UX has a valid business plan for the long haul flights to South America and this delay is going to change part of the expantion plans. So that's why they try to get a discount plus substitute planes.

User currently offlineOsiris30 From Barbados, joined Sep 2006, 3186 posts, RR: 26
Reply 7, posted (7 years 4 months 2 weeks 5 days 1 hour ago) and read 3198 times:

Well a mixed batch of news for Airbus.

On one hand it's a good sign that the customer is re-comitting.

On the other hand, it's really a bad sign they want a discount from the price they agreed to for what was ostensibly, a cheaper aircraft to begin with. If Airbus wasn't so cash constrained at the moment it might be better for them to cancel and pay the penalties on those old contracts. Unfortunately their hands would appear tied.



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineRootsAir From Costa Rica, joined Feb 2005, 4186 posts, RR: 41
Reply 8, posted (7 years 4 months 2 weeks 5 days 1 hour ago) and read 3184 times:

Quoting PanAm_DC10 (Thread starter):
Air Europa the first Spanish to sign for the A350 have re-affirmed their intention to stay with the model.

It was actually the Launch customer



A man without the knowledge of his past history,culture and origins is like a tree without roots
User currently offlineScbriml From United Kingdom, joined Jul 2003, 12047 posts, RR: 47
Reply 9, posted (7 years 4 months 2 weeks 5 days ago) and read 3153 times:
Support Airliners.net - become a First Class Member!

Quoting DLPMMM (Reply 3):
How can you reaffirm a purchase intention when you still have not agreed to pricing/compensation and terms?

Maybe on the basis that air Europa has a firm order for the original A350? scratchchin 

I see two separate issues here.

1 - The A350XWB is a significantly better plane than the one that air Europa signed for. So Airbus has some credit in the "account" here.

2 - The better A350 will be delivered later than the A350 that Air Europa signed for. So UX has some credit in the "account" here.

What's the solution? Perhaps the simplest thing is for UX to get the better A350 later, but at the same price as the old A350. Presumably, as one of the first airlines to buy the old A350, they got a pretty good price on them.



Hey AA, the 1960s called. They want their planes back!
User currently offlineScbriml From United Kingdom, joined Jul 2003, 12047 posts, RR: 47
Reply 10, posted (7 years 4 months 2 weeks 5 days ago) and read 3149 times:
Support Airliners.net - become a First Class Member!

Quoting DLPMMM (Reply 3):
How can you reaffirm a purchase intention when you still have not agreed to pricing/compensation and terms?

Maybe on the basis that air Europa has a firm order for the original A350? scratchchin 

I see two separate issues here.

1 - The A350XWB is a significantly better plane than the one that air Europa signed for. So Airbus has some credit in the "account" here.

2 - The better A350 will be delivered later than the A350 that Air Europa signed for. So UX has some credit in the "account" here.

What's the solution? Perhaps the simplest thing is for UX to get the better A350 later, but at the same price as the old A350. Presumably, as one of the first airlines to buy the old A350, they got a pretty good price on them.



Hey AA, the 1960s called. They want their planes back!
User currently offlineOsiris30 From Barbados, joined Sep 2006, 3186 posts, RR: 26
Reply 11, posted (7 years 4 months 2 weeks 5 days ago) and read 3146 times:

Quoting Scbriml (Reply 9):
What's the solution? Perhaps the simplest thing is for UX to get the better A350 later, but at the same price as the old A350. Presumably, as one of the first airlines to buy the old A350, they got a pretty good price on them.

A new 350 for the price of an old 350 would be a steal of a deal. The new 350s are significantly more expensive than the old 350s would have been. Even without a good launch discount that would be a hell of a deal. I would take it even if I didn't want the plane just to resell the plane. (I'm not saying that UX doesn't want them).

If UX got standard launch discounts on the old 350, they probably would be paying close to (or maybe even a little below) cost for the new 350 at the same price. That's good business however you slice it.



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineManni From South Korea, joined Nov 2001, 4221 posts, RR: 23
Reply 12, posted (7 years 4 months 2 weeks 5 days ago) and read 3134 times:

Quoting Osiris30 (Reply 7):
it's really a bad sign they want a discount from the price they agreed to for what was ostensibly, a cheaper aircraft to begin with

This might only be half the truth. It could well be that the discount Air Europa is seeking will be based on the price of the newest proposed A350.

The difference in listprice between both models is about US$40 million, as the launch customer it is not unthinkable that Air Europa was going to get a huge discount on their order (think 30 to 40%). It seems impossible that they would get an additional US$40 million from each aircraft on top of their launch discount, more so that they would even drive a bargain to get another discount on top of that.

Mr. Leahy said that he expects some customers to cancel. Reading between the lines that probably means.. 'We rather loose contracts then loosing money on contracts'.



SUPPORT THE LEBANESE CIVILIANS
User currently offlineOsiris30 From Barbados, joined Sep 2006, 3186 posts, RR: 26
Reply 13, posted (7 years 4 months 2 weeks 5 days ago) and read 3123 times:

Quoting Manni (Reply 12):
This might only be half the truth. It could well be that the discount Air Europa is seeking will be based on the price of the newest proposed A350.

Manni,

I would agree with you, except the way I read it, they are excepting their initial contract to be honored (at least from a price perspective). Ofcourse, what I read and what the truth may be depends largely on the author's ability to convey the situation accurately.

Quoting Manni (Reply 12):
The difference in listprice between both models is about US$40 million, as the launch customer it is not unthinkable that Air Europa was going to get a huge discount on their order (think 30 to 40%).

Yes.. that's why it will be interesting to see what the real story would be (and why I said, if they hold their original contract, they will likely be buying @ or near cost).

Quoting Manni (Reply 12):
Mr. Leahy said that he expects some customers to cancel. Reading between the lines that probably means.. 'We rather loose contracts then loosing money on contracts'.

As long as Airbus can afford the penalties from a cashflow perspective that would likely be the wise move. There will be penalties to cancel some of those contracts. I bet some are steep enough Airbus will eat a conversion. Some on the other hand are likely light enough to eat the penalty and cancel the contract.

I will say that I expect those who have contracts cancelled will defect to the 787 as it's purchase price is lower than the new 350 and when adding that to the penalty payments will likely put them 'in the ball park' from a financial planning perspective. (Additionally, the new 350 might not fit the plans for everyone, as it's bigger than the 'old' 350.... ugh we really need to come up with an acceptable abbreivation for the 3 'major' 350s that have been available)



I don't care what you think of my opinion. It's my opinion, so have a nice day :)
User currently offlineManni From South Korea, joined Nov 2001, 4221 posts, RR: 23
Reply 14, posted (7 years 4 months 2 weeks 5 days ago) and read 3109 times:

Quoting Osiris30 (Reply 13):
except the way I read it, they are excepting their initial contract to be honored (at least from a price perspective). Ofcourse, what I read and what the truth may be depends largely on the author's ability to convey the situation accurately.

Unfortunately the link posted in the threadstarter does no longer work (the Bloomberg article) I'm not going to guess the content of an article -the spanish one- in a language I can only order beer or charm girls with  duck . I tried to google the article without succes. Going by the quote in the thread starter it is not mentioned from where the negotations will start.

Quoting PanAm_DC10 (Thread starter):
The Spanish airline will seek either a discount on the price or ask Airbus to provide substitute planes until the A350s are delivered, the newspaper said.



SUPPORT THE LEBANESE CIVILIANS
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Air Europa Firms Up A350 + Leases From Gecas posted Wed Jan 25 2006 18:10:54 by N1786b
Air Europa And The A350! posted Thu Apr 28 2005 18:08:32 by B742
Air Europa To Order 30 737NGs? posted Tue Jun 14 2005 16:39:15 by NYC777
Air Europa Launch Customer For A350? posted Tue Dec 21 2004 16:58:11 by Henpol747
Air Europa Buys 10 Airbus A350 posted Fri Dec 17 2004 11:21:09 by Dcrusafon
A350 MoU Air Europa, posted Wed Nov 3 2004 17:18:50 by KEESJE
Did Qatar Ever Firm Their A350 Order? posted Thu Dec 14 2006 08:23:07 by BoeingFever777
Air Europa Overran Runway posted Tue Nov 28 2006 01:14:54 by Jimyvr
Air Madagascar Re-route BKK Svc; UU Joins The Svc posted Wed Nov 15 2006 20:49:07 by Jimyvr
Should Airbus Re-launch A350 Non XWB? posted Fri Oct 6 2006 11:33:24 by OyKIE