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A380 Customer Compensation - Definitive List  
User currently offlineKbdude From United States of America, joined Nov 2006, 154 posts, RR: 0
Posted (7 years 4 months 3 weeks 3 days 12 hours ago) and read 4852 times:

I understand that Airbus is nearing the end of the "A380 EIS delay" negotiations with its A380 firm customers...... Results of those negotiations, has been:

- Leased Interim lift direct from Airbus
- Discounted purchase on Airbus interim lift (A330, A340)
- Discounted follow-on A380 orders
- Direct cash payments
- Delay receipt of aircraft
- Order cancellation - return of cash deposit
- Any other???


Trying to put things into proper perspective, can someone pls summarize a "definitive compilation" those compensation results by A380 customer?

- SQ - A330 leased x ??, A380 follow-on order x ??, Discounted price on the lease, follow-on?
- QF - A330 purchased x ??, A380 follow-on order x ??, Discounted price on purchase, follow-on?
- LH - A340 purchased x ??, Discounted price?
- TG - A330 purchased x ??, Discounted price?
- AF - ??? - if not completed, target date for completion?
- MH - ?? - if not completed, target date for completion?
- KE - ?? - f not completed, target date for completion?
- QR - ?? - if not completed, target date for completion?
- EY - ?? - if not completed, target date for completion?
- China Southern - ?? - if not completed, target date for completion?
- Kingfisher - ?? - if not completed, target date for completion?
- VS - Delay reciept of order - to what date?
- ILFC - Delay reciept of order - to what date?
- FEDEX - Order cancellation
- UPS - Order cancellation


Now, I understand that airbus accounted for most of these compensation "financial losses" already in fiscal year 2006.... is it possible they spill over to 2007 & 2008? Also, can someone put a TOTAL $$ FIGURE to the required compensation for the EIS delay (compensation only pls - not "opportunity costs lost", related Org re-structuring, etc)


Thank you!

10 replies: All unread, jump to last
 
User currently offlineEI321 From Iraq, joined Jul 2009, 0 posts, RR: 0
Reply 1, posted (7 years 4 months 3 weeks 2 days 20 hours ago) and read 4353 times:

Quoting Kbdude (Thread starter):
Trying to put things into proper perspective, can someone pls summarize a "definitive compilation" those compensation results by A380 customer?

- SQ - A330 leased x ??, A380 follow-on order x ??, Discounted price on the lease, follow-on?
- QF - A330 purchased x ??, A380 follow-on order x ??, Discounted price on purchase, follow-on?
- LH - A340 purchased x ??, Discounted price?
- TG - A330 purchased x ??, Discounted price?
- AF - ??? - if not completed, target date for completion?
- MH - ?? - if not completed, target date for completion?
- KE - ?? - f not completed, target date for completion?
- QR - ?? - if not completed, target date for completion?
- EY - ?? - if not completed, target date for completion?
- China Southern - ?? - if not completed, target date for completion?
- Kingfisher - ?? - if not completed, target date for completion?
- VS - Delay reciept of order - to what date?
- ILFC - Delay reciept of order - to what date?
- FEDEX - Order cancellation
- UPS - Order cancellation

We wont be able to define any of these are the details are not known, hense the question marks will remain.


User currently offlineHB88 From United Kingdom, joined Sep 2005, 816 posts, RR: 31
Reply 2, posted (7 years 4 months 3 weeks 2 days 19 hours ago) and read 4190 times:

I'm not entirely sure of the point of this thread or the question - other than yet another swing at Airbus and the A380 program.

Unless visible in public accounting documents, most of the specifics of any compensation deals are and will remain confidential. Similarly, any on-going changes to negotiations positions and 'deals' moving forward will remain confidential.


User currently offlineKbdude From United States of America, joined Nov 2006, 154 posts, RR: 0
Reply 3, posted (7 years 4 months 3 weeks 2 days 14 hours ago) and read 3471 times:

Quoting HB88 (Reply 2):
Unless visible in public accounting documents, most of the specifics of any compensation deals are and will remain confidential. Similarly, any on-going changes to negotiations positions and 'deals' moving forward will remain confidential.

well...some compensation is public record, perhaps not details, but certainly an overall summary of the compensation. Just wanted to compile what we know so far as A380 compensation & put it into perspective. Also, if Boeing were to anounce 787 EIS delays next year..... just wanted to "ballpark" the compensation for ~500 firm orders & ~40 customers, so far (obviusly would be more in 2008).

Quoting HB88 (Reply 2):
I'm not entirely sure of the point of this thread or the question - other than yet another swing at Airbus and the A380 program.

Pls lets not insinuate any foul motives.. other than just honest data collection.


User currently offlinePM From Germany, joined Feb 2005, 6882 posts, RR: 63
Reply 4, posted (7 years 4 months 3 weeks 2 days 14 hours ago) and read 3423 times:

Some ?? are common knowledge.

Quoting Kbdude (Thread starter):
- SQ - A330 leased x ??, A380 follow-on order x ??, Discounted price on the lease, follow-on?
- QF - A330 purchased x ??, A380 follow-on order x ??, Discounted price on purchase, follow-on?

SQ are leasing 19 A330s. They ordered 10 A380s and recently added 9 more. No idea about the price.
QF ordered 12 A380s are recently added 8. No idea about the price but they are getting more A330s.

Quoting Kbdude (Thread starter):
- LH - A340 purchased x ??, Discounted price?

Recently ordered 7 more. No idea about the price. (Also recently ordered 5 more A330s.)

Quoting Kbdude (Thread starter):
- TG - A330 purchased x ??, Discounted price?

Not yet a done deal.


User currently offlineB707Stu From United States of America, joined Feb 2005, 918 posts, RR: 4
Reply 5, posted (7 years 4 months 3 weeks 2 days 12 hours ago) and read 2564 times:

A little off topic, but not much - I see Kingfisher is on the list for an A380, can the A380 fly BOM-JFK nonstop?

User currently offlineAstuteman From United Kingdom, joined Jan 2005, 9999 posts, RR: 96
Reply 6, posted (7 years 4 months 3 weeks 2 days 8 hours ago) and read 2329 times:
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Quoting PM (Reply 4):
- QF - A330 purchased x ??, A380 follow-on order x ??, Discounted price on purchase, follow-on?

QF ordered 12 A380s are recently added 8. No idea about the price but they are getting more A330s

But I'm pretty certain QF stated that their compensation was paid in cash, implying that any discounts on the follow-on A380's or the A330's were of the "normal" variety.

This thread will either be ignored or become a royal flamefest. Hopefully the former.

Regards


User currently offlineA342 From Germany, joined Jul 2005, 4681 posts, RR: 3
Reply 7, posted (7 years 4 months 3 weeks 2 days 8 hours ago) and read 2278 times:

Quoting B707Stu (Reply 5):
A little off topic, but not much - I see Kingfisher is on the list for an A380, can the A380 fly BOM-JFK nonstop?

Westbound, the cargo payload would have to be reduced. Eastbound - no problem.
But this also depends on the configuration. Anyway, the 569-tonne MTOW version would be useful for this route.



Exceptions confirm the rule.
User currently offlineSlz396 From , joined Dec 1969, posts, RR:
Reply 8, posted (7 years 4 months 3 weeks 2 days 7 hours ago) and read 2228 times:

Quoting Astuteman (Reply 6):
I'm pretty certain QF stated that their compensation was paid in cash, implying that any discounts on the follow-on A380's or the A330's were of the "normal" variety.

That's indeed correct and we must be careful not to do double (or even triple) dipping!

When LH had ordered some extra A330s last year, the deal was said to be secured at very favourable prices due to the A380 compensation settlement, yet when they then ordered 7 A346s, again the rumour popped up it was in compensation of A380 delays and I am sure when they will announce their A380 follow up order, no doubt we will be reading again how they got a great deal because of the A380 delays...

TG has said their have agreed to being compensated through extra price cuts on soon to be ordered A330s and have mentioned a price of €90M/plane so don't expect any cash payments then...

Whatever the individual situation of the compensation payments with airlines is, EADS regulatory statements provide good guidance as to the overall amount of compensation payments to all customers combined:

From 2007 to 2010, EADS anticipates annual shortfalls of EBIT contribution from the A380 programme of about € 500 million relative to the original baseline plan. The shortfalls result from the shift of margin to later years, excess costs tied to the recovery action and the late delivery charges which are to be negotiated with customers.

in short: the total compensation payments form Airbus will not be higher than 4 x €500M MINUS the shift of margin on the number of A380s which are not going to be delivered before 2010 (contrary to the number originally planned) MINUS the extra costs Airbus has made to fix the problems they had/have with the A380 production.


User currently offlinePM From Germany, joined Feb 2005, 6882 posts, RR: 63
Reply 9, posted (7 years 4 months 3 weeks 2 days 7 hours ago) and read 2179 times:

Quoting Astuteman (Reply 6):
But I'm pretty certain QF stated that their compensation was paid in cash, implying that any discounts on the follow-on A380's or the A330's were of the "normal" variety.

Agreed. Arguments that all A330/A340/A380 (or even A350) orders coming from sometime A380 customers are only "compensation" have always been pretty laughable. I was merely trying to add a few facts to fill in blanks. What others make of those numbers is up to them.


User currently offlineBaroque From Australia, joined Apr 2006, 15380 posts, RR: 59
Reply 10, posted (7 years 4 months 3 weeks 1 day 23 hours ago) and read 1822 times:

Quoting HB88 (Reply 2):
I'm not entirely sure of the point of this thread or the question - other than yet another swing at Airbus and the A380 program.

Yep HB88 it is really difficult to understand why Airbus had to give away free 330s to compensate for late A380s that were already close to free. (Sarcasm button full on, not at you HB88 but at all the previous threads with free 330s!)

Quoting Slz396 (Reply 8):
That's indeed correct and we must be careful not to do double (or even triple) dipping!

While it is correct that QF took the money, I just get a feeling that they pushed hard on the 330 conditions too, although I am definitely not in the free 330 brigade. There is definitely a severe risk of double and as you suspect triple counting. It appears that there is a countervailing problem that Airbus will have been able to use, and that is a shortage of suitable planes, evidenced by the orders for the 330 well away from any compensation deals.

The 767 is not really popular now, the 777 line is booked out and the same goes for the 787, apart from the minor fact that the 787 has yet to be assembled let alone fly. Roll on the EIS for the 380!


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