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WSJ: A380 Break-even Has Risen -Gallois  
User currently offlineN328KF From United States of America, joined May 2004, 6491 posts, RR: 3
Posted (7 years 6 months 4 weeks 1 day 22 hours ago) and read 13831 times:

I don't know if this means more than the 420 target, but this article from The Wall Street Journal points out that Gallois was deliberately non-specific (brief fair-use excerpt):

Quote:
AMSTERDAM (Dow Jones)--The break-even point for Airbus' problem-plagued A380 airplane program has risen following recent difficulties, the planemaker's Chief Executive Louis Gallois said at the annual shareholder meeting of parent company European Aeronautic Defence & Space Co. (5730.FR) Friday.

"Clearly because of the difficulties of the A380, the break-even point has increased," Gallois said. EADS now isn't giving specific targets on the number of A380s it needs to sell to break even on the project, he said.

Airbus has currently sold 156 A380s. Last year it said it needed to sell around 420 of the planes to break even. This break-even guidance was given before Airbus unveiled a major cost-cutting program known at Power8.

Gallois is also joint CEO of EADS.

http://online.wsj.com/article/BT-CO-20070504-707821.html?mod=hps_us_my_companies

[Edited 2007-05-04 16:47:30]


When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
128 replies: All unread, showing first 25:
 
User currently offlineClickhappy From United States of America, joined Sep 2001, 9654 posts, RR: 68
Reply 1, posted (7 years 6 months 4 weeks 1 day 22 hours ago) and read 13803 times:
AIRLINERS.NET CREW
PHOTO SCREENER

Who is surprised, really?

Lack of regulatory control over Airbus is the only thing saving them, and by them I mean the share price of EADS, from going into a complete freefall.


User currently offlineZeke From Hong Kong, joined Dec 2006, 9210 posts, RR: 76
Reply 2, posted (7 years 6 months 4 weeks 1 day 22 hours ago) and read 13756 times:

Nothing new RE: 420 A380 Units To Break Even (by SEPilot Jan 20 2007 in Civil Aviation), been discussed before


We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 6 months 4 weeks 1 day 22 hours ago) and read 13756 times:

I'm sure he's not counting the fact that if the project does not break even in the next 12 years or so (which it won't), the multi-billion Euro loans that were provided by the EU will be forgiven.

Around here, that's called a scam.


User currently offlineNYC777 From United States of America, joined Jun 2004, 5796 posts, RR: 47
Reply 4, posted (7 years 6 months 4 weeks 1 day 22 hours ago) and read 13756 times:

If the breakeven has increased I wonder what the RoI on the A380 is projected to be. Certainly not as good as when Airbus ventured down this path in 2000. They're projecting to sell 700-750 of these and with break even IMO closer to 500 the RoI is not going to be good compared to a true 787-type aircraft had they not putzed around for 3 years.


That which does not kill me makes me stronger.
User currently offlineN328KF From United States of America, joined May 2004, 6491 posts, RR: 3
Reply 5, posted (7 years 6 months 4 weeks 1 day 22 hours ago) and read 13717 times:

Quoting Zeke (Reply 2):
Nothing new RE: 420 A380 Units To Break Even (by SEPilot Jan 20 2007 in Civil Aviation), been discussed before

That's easy for you to say, but WSJ is suggesting that this may be a further increase in break-even. That's why they mentioned that the 420 number was from last year, where Gallois' comments use the term "recent."

[Edited 2007-05-04 16:50:08]


When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' T.Roosevelt
User currently offlineZeke From Hong Kong, joined Dec 2006, 9210 posts, RR: 76
Reply 6, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13469 times:

Its the EADS annual meeting from the 4th May 2007 in AMS, anything that was reported in the past 12 months will get a mention, including the announcement made last October of the increase to 420.

Nothing new IMHO, just reporting to the shareholders the previous years activities, the report is available online from EADS http://www.eads.com/xml/content/OF00000000400004/8/46/41589468.pdf



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineLogos From United States of America, joined Jan 2000, 794 posts, RR: 1
Reply 7, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13469 times:

Quoting NYC777 (Reply 4):
I wonder what the RoI on the A380 is projected to be

I would assume some non-positive number.

Cheers,
Dave in Orlando



Too many types flown to list
User currently offlineFlysherwood From United States of America, joined Jul 2006, 1115 posts, RR: 0
Reply 8, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13424 times:

Quoting NYC777 (Reply 4):
If the breakeven has increased I wonder what the RoI on the A380 is projected to be. Certainly not as good as when Airbus ventured down this path in 2000. They're projecting to sell 700-750 of these and with break even IMO closer to 500 the RoI is not going to be good compared to a true 787-type aircraft had they not putzed around for 3 years

I imagine that the ROI on the A380 project will be NEGATIVE for the life of the program.


User currently offlinePygmalion From United States of America, joined Jun 2006, 968 posts, RR: 38
Reply 9, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13423 times:

Last year Airbus said is was in the range of 420... this year they "are no longer giving specific targets"

If it is the same as Zeke says... they would say it was still the same instead of refusing to discuss it. Not talking about it means its higher.

Should be no big surprise to anyone.


User currently offlineFlysherwood From United States of America, joined Jul 2006, 1115 posts, RR: 0
Reply 10, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13338 times:

Quoting Pygmalion (Reply 9):
Should be no big surprise to anyone.

Actually, from what I have been reading on the various threads over the past couple of months, this is going to be a complete SHOCK to all of the A380 cheerleaders. Last year when they made the 420 break-even assessment, I along with others stated that we wouldn't be surprised if it was even more and got hammered for simply expressing our opinions without proof.  Yeah sure


User currently offlineJoni From , joined Dec 1969, posts, RR:
Reply 11, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13275 times:

Quoting Clickhappy (Reply 1):

Lack of regulatory control over Airbus is the only thing saving them, and by them I mean the share price of EADS, from going into a complete freefall.

Would you care to elaborate on this "lack of regulatory control"? EADS is a listed company and it has to publish audited books regularly.

Quoting Cfalk (Reply 3):
I'm sure he's not counting the fact that if the project does not break even in the next 12 years or so (which it won't), the multi-billion Euro loans that were provided by the EU will be forgiven.

It's a long time since I last saw this (incorrect) claim on A.net.


User currently offlineAerosol From Germany, joined Oct 2000, 559 posts, RR: 0
Reply 12, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13234 times:

Who cares - Airbus is non-profit state supported socialist organisation anyway . Europe created the biggest thing you can fly in - although it might have been cheaper to resurrect the HINDEBURG.

A believer and EADS shareholder  Wink


User currently offlineClickhappy From United States of America, joined Sep 2001, 9654 posts, RR: 68
Reply 13, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13208 times:
AIRLINERS.NET CREW
PHOTO SCREENER

Would you care to elaborate on this "lack of regulatory control"? EADS is a listed company and it has to publish audited books regularly.

Sure thing.

We can start with this:

"Clearly because of the difficulties of the A380, the break-even point has increased," Gallois said. EADS now isn't giving specific targets on the number of A380s it needs to sell to break even on the project, he said.


User currently offlineFlysherwood From United States of America, joined Jul 2006, 1115 posts, RR: 0
Reply 14, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13168 times:

Quoting Aerosol (Reply 12):
EADS shareholder

I am sorry for you. My Boeing shares did the same a few years ago, so I know your pain. But I held on to it and look, I am very happy now. Hang on, things have got to turn around at both Airbus and EADS, don't you think? However as you say that division is a non-profit organization, so maybe things won't get better for your shares! So sorry...  Wink


User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 15, posted (7 years 6 months 4 weeks 1 day 21 hours ago) and read 13088 times:

Quoting Joni (Reply 11):
It's a long time since I last saw this (incorrect) claim on A.net.



Quote:
UNEQUAL ASSISTANCE. Launch aid, by contrast, shifts risk away from the market. Airbus has been able to tap into $15 billion in government loans since its inception in 1970, including $3.2 billion for the mega A380. That government money has shielded Airbus from the same market risks that face Boeing and any other commercial competitor. One of the many benefits of European launch aid is that Airbus isn't required to pay back the loans if the aircraft program is unsuccessful.

However, if sales of Boeing's 787s flop, Boeing loses billions and faces the risk of going out of business. If A380 sales falter, Airbus doesn't have to repay the $3 billion in loans.

(emphisis is mine)

source: http://www.businessweek.com/bwdaily/.../mar2005/nf20050321_4418_db046.htm

Since then, the US Government says that the loans directly related to the A380 launch have grown:

Quote:
The EU provided further loans and infrastructure that has pushed the total amount of A380 subsidies to approximately $6.5 billion. Airbus is now preparing to launch another competitor (A350) to the recently-launched Boeing 787, and it has requested $1.7 billion for that aircraft as well, even though it has stated publicly that it could easily finance the project itself.

source: http://www.ustr.gov/Document_Library...Step_in_Airbus_WTO_Litigation.html

Do you have any sources that say that, short of bankruptcy, Airbus must repay those loans no matter what (as Boeing would have to)?


User currently offlineMagyar From Hungary, joined Feb 2000, 599 posts, RR: 0
Reply 16, posted (7 years 6 months 4 weeks 1 day 20 hours ago) and read 12868 times:

Quoting Cfalk (Reply 3):
I'm sure he's not counting the fact that if the project does not break even in the next 12 years or so (which it won't), the multi-billion Euro loans that were provided by the EU will be forgiven.

Around here, that's called a scam.

No, actually, it is called war spending. And it is safe to say that more money was "redirected" from you to
private pockets than what worth several dozen A380.

I am not thrilled by what happening around the A380, but if it is possible cut this "lectury, moral high ground"
stuff. It is quite disgusting.


User currently offlineFlysherwood From United States of America, joined Jul 2006, 1115 posts, RR: 0
Reply 17, posted (7 years 6 months 4 weeks 1 day 20 hours ago) and read 12834 times:

Last time I checked EADS is a defense contractor, are they not? What is your point?

User currently offlineDavid_itl From United Kingdom, joined Jun 2001, 7415 posts, RR: 13
Reply 18, posted (7 years 6 months 4 weeks 1 day 18 hours ago) and read 12530 times:
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This extract from this article which descrbes about the funding that's received:

"After four years of public sniping, the European Commission and America's trade officials agreed a deal in 1992 that ruled out production subsidies (the British and German governments wanted that too) and limited refundable launch aid to Airbus to 33% of the development cost of a new model. The Europeans agreed that support would go only to projects likely to repay the money within 17 years; and that the interest rate for the first 25% of refundable loans would be at government rates, but the rest would be at one percentage point above that. Furthermore, repayments would be by a royalty on sales (to continue even after full repayment), rather than only at the end of the loan period."


Found a couple of "interesting" articles to read:
Measures affecting Trade in Large Civil Aircraft>

and

Airbus v Boeing revisited: international competition in the aircraft market

User currently offlineStitch From United States of America, joined Jul 2005, 31261 posts, RR: 85
Reply 19, posted (7 years 6 months 4 weeks 1 day 18 hours ago) and read 12433 times:
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We know that Airbus has to pay royalties for the life of the program, and it has been shown that, at least for the British Government, the A320 program has not already paid it's RLA in full via said royalties, but continues to bring in a not-so-insignificant chunk of change annually thanks to strong sales and deliveries.

What nobody (to my knowledge) has yet to show is how the French, German and Spanish have done by the A320 program (in other words, are they getting royalty payments?), nor any data on royalty payments for the A330 and A340 program deliveries (I excuse the A380 program as it is yet to have a delivery) and how those payments are tracking to the original RLA investment.


User currently offlineIkramerica From United States of America, joined May 2005, 21562 posts, RR: 59
Reply 20, posted (7 years 6 months 4 weeks 1 day 18 hours ago) and read 12405 times:

Quoting David_itl (Reply 18):
The Europeans agreed that support would go only to projects likely to repay the money within 17 years

Notice this statement. REPAY within 17 years. Not reach the projected ROI in 17 years. What this means is that they are getting "free" money in that all they need to do is present a reasonable case that they could repay the "loan" in 17 years and they can get it. Obviously, it is owed, but compared to having to secure the equity on the open market, getting a 17 year non-equity loan at or near government rates is less risk than a company needing to secure 100% of the money from people expecting a market rate of return.

Further, after the debacle that is the A380, one would expect that if Airbus were completely privately funded, they would have more trouble getting launch funds for the A350. But with this government allowance, no matter how bad they screw up the A346 or A380, they can still get the same 33% at the same low interest rate with the same low burden of proof of profitability. And with the government sharing 1/3rd of the risk, other investors will be less nervous about any project. That is the unfairness argument.

The agreement was reached back when Airbus was not the "biggest" company, but now that it effectively killed off McD, Fokker and BAe/Avro, and passed Boeing in sales and deliveries, why on earth do they need this sort of deal? Why do they need this protection? It's no different than the BA argument at LHR, protected status for no valid reason in 2007. Sure, these companies needed "help" 15-30 years ago, but that day has passed.

Airbus is a big boy now. Take off the training wheels from the bike...



Of all the things to worry about... the Wookie has no pants.
User currently offlineCfalk From , joined Dec 1969, posts, RR:
Reply 21, posted (7 years 6 months 4 weeks 1 day 17 hours ago) and read 12320 times:

Quoting Stitch (Reply 19):
What nobody (to my knowledge) has yet to show is how the French, German and Spanish have done by the A320 program (in other words, are they getting royalty payments?), nor any data on royalty payments for the A330 and A340 program deliveries (I excuse the A380 program as it is yet to have a delivery) and how those payments are tracking to the original RLA investment.

Without question, the A320 program has been a stellar success for Airbus and the EU governments which supported its development. No question that success has been well earned. Solid mainstream market, and a well-built plane to fill it.

However,

Quoting Ikramerica (Reply 20):
Further, after the debacle that is the A380, one would expect that if Airbus were completely privately funded, they would have more trouble getting launch funds for the A350. But with this government allowance, no matter how bad they screw up the A346 or A380, they can still get the same 33% at the same low interest rate with the same low burden of proof of profitability. And with the government sharing 1/3rd of the risk, other investors will be less nervous about any project. That is the unfairness argument.

As Ikramerica very well put it, launch aid is something that is unique. Both Airbus and Boeing enjoy tax holidays on new plants, military contracts etc. But the US government (nor any other government) is not about to loan Boeing billions of dollars at rock-bottom rates and say, "If the project flops, that's OK, you don't need to pay us back." That's what gets up people's noses.


User currently offlineCygnusChicago From United States of America, joined Mar 2007, 758 posts, RR: 1
Reply 22, posted (7 years 6 months 4 weeks 1 day 17 hours ago) and read 12307 times:

Quoting Cfalk (Reply 3):
the multi-billion Euro loans that were provided by the EU will be forgiven. Around here, that's called a scam.

No, around here, that's called "Chapter 11 bankcruptcy protection"



If you cannot do the math, your opinion means squat!
User currently offlineDavid_itl From United Kingdom, joined Jun 2001, 7415 posts, RR: 13
Reply 23, posted (7 years 6 months 4 weeks 1 day 17 hours ago) and read 12271 times:
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Quoting Cfalk (Reply 21):
US government (nor any other government) is not about to loan Boeing billions of dollars at rock-bottom rates and say, "If the project flops, that's OK, you don't need to pay us back." That's what gets up people's noses.

Umm...can we say how much Japanese companies are paying back to the Japanese government for the non-repayable subsidies afforded to them in their contribution to the 787?


User currently offlineFlysherwood From United States of America, joined Jul 2006, 1115 posts, RR: 0
Reply 24, posted (7 years 6 months 4 weeks 1 day 17 hours ago) and read 12271 times:

Quoting CygnusChicago (Reply 22):
No, around here, that's called "Chapter 11 bankcruptcy protection"

What do you know about Chapter 11 protection CygnusChicago? I have now bought two (2) companies that were in Chapter 11. Let me tell you, there is not a lot of protection for the shareholders of the company. Yeah sure


25 Pygmalion : I have seen lots of posts that the Japanese government gave money to suppliers... but never any sources or data. I do know that the J gov built infra
26 Cfalk : In Ch 11 Bankruptcy is not that easy. All it does is prevent your creditors from immediately liquidating your company to get their money back. While
27 CygnusChicago : Two things: 1) Government rates, and government rates+1% are not rock-bottom rates. By using launch aid, Airbus actually incurs two penalities. First
28 Flysherwood : Having watched 2 companies plod through the US Bankruptcy Code - Chapter 11, I can tell you one thing, many more companies do not make it out than act
29 BigJKU : That comment is very ignorant and shows a very limited understanding, at best, of the law in regards to a company. Not to mention it is not related t
30 Post contains images Tugger : THAT is FUNNY! Exactly what are the dollar/euro rates that they are having to pay? I generally know "government rates" to be the lowest bench-mark se
31 XT6Wagon : Government rates are FAR lower than market rates. Market rates are based on government rates + a certain % dependant on type of loan and risk.
32 Post contains images TeamAmerica : Searching for something significant to discuss here....failed. Breakeven is so distant it is nothing more than an exercise in financial forecasting. S
33 Post contains images Flysherwood : # 1 The EU probably has some of the most subsidized farming industry in the world! What are you talking about?!? Yeah, nice investment return for EAD
34 Agill : THat was exactly what he said. Better to spend it on planes than farming subsidies.
35 Post contains links Zeke : The info would be out there, e.g. "It is sometimes argued that the UK aerospace industry receives preferential treatment because of ready access to L
36 Post contains links David_itl : Doing my best to find evidence for you: http://www.buffalo.edu/reporter/vol3.../vol35n21/articles/Dreamliner.html "The reason for the two sizes, the
37 Aminobwana : I HAVE FILED A SIMILAR REPLY UNDER THE TOPIC " Eads (AIRBUS' Parent): Shareholder Meeting 2007" Even if Power 8 succedes and reduces cost, what I see
38 DAYflyer : Some of my US colleagues seem to forget the US Government bailout of Chrysler. Although they did have to pay the loans back with interest, if the com
39 Flysherwood : Let's not forget just how controversial that was! And Mr. Iacoca made sure that the loan was paid back EARLY!!!
40 N328KF : Actually, the part most people forget is that the U.S. government wound up with a big stake in Chrysler, which it sold for a tidy profit. Sort of lik
41 BigJKU : A bailout and a risk-free loan are different things. A bailout will only have the same effect if it is known that the company would not be allowed to
42 B2707SST : This is not correct. Market interest rates for any borrower consist of a base rate determined by the supply and demand for capital plus a default ris
43 Post contains images Stitch : Airbus receives RLA at the official Discount Rate, which is what the European Central Banks charge their non-state-owned peers. This rate is a few po
44 DeltaDC9 : No it is not. All it really does is prevent one creditor from taking everything before the others get there chance and provide a window of opportunit
45 Cfalk : The Chrysler bailout was an exception. Very, very rarely does the US government step in like that. The ONLY reason it bailed out Chrysler was the fac
46 DeltaDC9 : Somehow I doubt the Feds would be anywhere but first in line drooling.
47 Post contains links Joni : I'm sorry but what's your point? They don't suffer from lack of regulatory control if they don't publish separate accounts for each product. Boeing d
48 SeJoWa : Needed to be said. I sign here. Thank you Tug. Airbus doesn't need subsidies, Europe's capital markets are quite big and sophisticated enough. In my
49 Post contains links Tugger : Quoting Joni (Reply 47): It's Boeing that gets the free cash. Equally incorrect and inflammatory, no real reason to make a statement like this other t
50 Post contains links Zeke : I would very much like that as well, as I think it would put a rest to a lot of bickering on here, I suspect those EU governments are getting a nice
51 Post contains links Cfalk : Only if EADS has to repay all the government support it's recieved, including billions from American states when they put a Eurocopter assemply line
52 Pygmalion : Boeing gets no money from Washington state. None. Washington State is building a shipping pier that Boeing won't use for the 787. It will however pre
53 SkyyMaster : While this is certainly no surprise, I doubt it will convince the Airbus cheerleaders that the 380 will never sell enough frames to make a profit. I t
54 BHMBAGLOCK : Don't forget the engineering center in Alabama - they've also received significant aid there with much more promised if they can pull in the tanker p
55 Stitch : I found the transcript of a House of Commons session on the additional subsidies Airbus UK was asking for and it noted that over the past two decades
56 Tugger : Does anybody have any idea as to the "real" selling price for the A380? I would think that would be the cost of the frame sans any customer specified
57 Post contains images Stitch : Folks, governments invest in industries and companies because it gives them something back in return. The UK invested £130 million in their aerospace
58 CygnusChicago : Um, sense of humor? I was responding to the sarcastic "it's a scam", with sarcastic-humor. Would it help if I adopted the prevalent style of followin
59 CygnusChicago : Yes. I posted some info on this shortly after I joined the board, but it was deleted because you have to have a public domain source (read: anyone ha
60 Stitch : 2006 List prices per Airbus ranged from $297 million to $316 million. The average list was $306 million per the Aircraft Value Analysis company and t
61 SixtySeven : He can't give hard numbers because they rob Peter to pay Paul over there. They sell you one plane and give you another. There's no rhyme or reason jus
62 Halls120 : In all the childish A v. B debates I've seen over the past two years, I've never seen anyone wish bankruptcy on Airbus. In fact, the common comment I
63 XT6Wagon : Boeing itself DOES NOT want Airbus to go under. Now they would love for Airbus to shuffle along like they are right now till the end of time, but goi
64 Dvautier : I haven’t posted much to a.net and as a quiet observer I try to remain objective (or as best as any American can be). My specialty is only in airpla
65 Rwessel : You might be surprised. While taxes you owe the feds are in (usually) in the first priority class of unsecured debts, it's likely that a bailout loan
66 AVinutso : Could this be the start of Airbus getting ready to announce more delays for the Aircraft? I hope not as the A380 NEEDS to get certified and into servi
67 Post contains links Joni : No, it isn't equally incorrect since no-one has yet produced any evidence even hinting that Boeing would have to pay back (for example) the 3BUSD tax
68 Logos : Bingo. I have to say that the A380 has struck me as a vanity project from the beginning. The ratioale for its supposed market seemed to go against tr
69 Glideslope : I've also have seen the 380 as a Vanity project since day one. It will also meet the same demise as the last vanity project. Concorde (although i lov
70 Stitch : It is not tax credit, it is a tax cut. The state lowered the Business & Occupation tax rate for aerospace industries. As this tax is collected on gro
71 Sllevin : Yes, you are correct. The benefits to the State of Washington are less. However, the risks are significantly less. All "loans" are based on a risk/be
72 Bringiton : The state of Washington hasnt handed over any money to boeing for the dev. of the 787 , all they have done is provide tax cuts to the tune of around
73 Post contains links and images Stitch : Boeing pays the B&O tax on their gross receipts, which is the money they take in before any costs are associated. It is collected irregardless of a c
74 Post contains links Cfalk : They are not. But what's fair for one should be fair for the other. All communities everywhere in the world would love to have a large manufacturing
75 Bringiton : I was implying to the fact that boeing has to sell UNITS of 787's inorder to avail the benifits of the tax cuts that the state has granted them .
76 Post contains images Ikramerica : Assuming those totals are in current pounds (if not, it's a huge loss)... 1.24/1.23= 0.8% return over 20 years or so. That's horrible! That demonstra
77 Stitch : The session was held in April of last year, so I am guessing it is using 2006 figures... Aye, but it does prove that Airbus has not stiffed the UK go
78 Ikramerica : No, it doesn't. The question is: could the money have been better spent? Did the UK taxpayers need to give that money to the government to see basica
79 Pygmalion : Have you ever gotten a mortgage to buy a house Zeke? Ever amortized a mortgage? If I borrowed 11 billion dollars and waited 15 years to pay it back..
80 Gbfra : I'm absolutely sure that M. Serge Dassault would be extremely astonished to learn from a.net that he had no longer control of his company. The Defenc
81 Tugger : By the way are we talking that Airbus borrowed 11 billion of money that was from 15 years ago? And is the 13 billion paid based on the value of the o
82 Stitch : True, but then Airbus is not borrowing at commercial rates with RLA. They get the same rate from the EU central banks that the commercial bank that l
83 Joni : Whatever you want to call it - a tax cut, a tax credit or a handout, the result is the same. Money is moved from the State of Washington, in the fina
84 Stitch : From the Westminster Hall debate on Airbus - 6 December 2006: Between 2004 and 2006, the UK government gave Airbus £44 million in direct investment
85 Wsp : The 1.24 billion GBP can only be the repayment for the 700 million GBP loans for the A320/330/340 programs. IIRC the 700 million for the A380 will st
86 Ikramerica : It is now quite large and though smaller, it's becoming "comparable." No, they are not the same, and your lack of understanding of this destroys you
87 Stitch : I don't think anybody is misunderstanding anything, frankly. Some Airbus Aficionados and some Boeing Boosters just like to intentionally twist facts -
88 Joni : None of these appear to be tax cuts, so why mention them here? Similarly, and slightly surprisingly, none of these are either! These look a lot like
89 Aither : For some americans we're just "socialists". With such narrow minded people there is no point to argue. On such complicated issues everybody can prove
90 Post contains links and images Stitch : Here ya go - http://www.iht.com/articles/2007/02/04/business/ibrief.php. You can bet that Airbus Germany will benefit from this, and to a tune of 10%
91 Wsp : Better don't bet too much. This is a tax on profits only. I wouldn't call 10% of nothing a benefit (although it is unclear if Airbus Germany makes pr
92 Post contains images Stitch : Yeah, and if Boeing never sold a 787 they'd never have had to pay B&O tax, be it the the current discount rate or the upcoming even more-discounted r
93 Post contains images Sphealey : > Whatever you want to call it - a tax cut, a tax credit or a handout, the > result is the same. Money is moved from the State of Washington, > in the
94 Sllevin : Only if they deliver *enough* planes. If Boeing comes under breakeven, Boeing eats the cost. If Airbus comes up under breakeven, the lenders eat the
95 Stitch : Boeing will pay B&O tax on every 787 they sell, whether or not they make any money from it, as it is gross income and that is how WA assesses the B&O
96 Post contains links and images Cfalk : Where have you seen 60% profit margins for Boeing on military contracts? I don't have the exact numbers for Boeing, but Lockheed Martin, which is gen
97 Post contains links Stitch : I'm with Cfalk. If you want to be inflammatory, fine, but to throw your own words [from Reply 83] back into your teeth, "Please quote some sources wi
98 InbarD : I don't think the A380 will ever reach its break even point. Airbus made some big mistakes and now they will have to pay for it.
99 Wsp : If the launch aid is structured based on the US-EU agreement (http://www.ita.doc.gov/td/aerospace/agreements/usaeulca.pdf) then the payments to the l
100 Post contains images Jacobin777 : ..the A320 argument has gone on far too many times....how about the other possible failed investments (which I believe the A340NNG will turn into), o
101 Post contains images Stitch : I think where people get confused is when they have not read Articles 4.2 and 4.3 themselves, but instead rely on sound-bites. Airbus will pay a roya
102 Astuteman : It does no such thing. you're presuming that the 1.23Bn repaid leaves NO outstanding liability, whereas in reality there is still a liability of some
103 Post contains images Stitch : I'll agree with you the RoI is dismal, but my argument is not about the RoI. It is about people who claim that the RLA on the A320, A330 and A340 pro
104 Post contains images Jacobin777 : ....leave it up to Astuteman to get to the bottom of things.... ... ...I did read a recent interview where it stated regardless if the A380 is a "fai
105 Stitch : The US/EU 1992 Agreement lists only royalties per plane sold as the form of repayment for the initial RLA loans. So I wonder if a family does not sel
106 Elvis777 : Howdy all, So any one care to take a gander at what that final number of frames that needs to be sold in order to break even, say in a 15 year period
107 Post contains images Jacobin777 : I had always thought it was the original loan amount..not just the royalties...I could be wrong though and I would rather be corrected and have the f
108 Post contains links and images Joni : " target=_blank>http://www.iht.com/articles/2007/02/....php. Those articles don't relate in any way to any Airbus/EADS-specific tax breaks, they relat
109 Pygmalion : At the introduction of the 777, to obtain a building permit to increase the factory to build the 777, Boeing paid around 100 million dollars to, buil
110 Joni : Okay, let's play along for a moment and return to my earlier post #88: Imagine that instead of the 3BEUR loans that are to be repaid through royaltie
111 BHMBAGLOCK : No, it's kept in the State of Washington. It's very likely that 787 assembly would be in AL or SC but for this "tax break". I put it in quotation mar
112 Wsp : If that would happen what would WA offer to Boeing to keep them in the state? My understanding is that under German legislation special tax treatment
113 Pygmalion : But if the German government lowered future local tax rates for all aerospace manufacturing in Hamburg Germany for the next 20 years provided that any
114 Halls120 : Funny that you agree, but have no problem participating in the rabble rousing. Claiming Boeing has a 60% ROI without any proof to support that claim
115 Sllevin : If the 787 was currently low on sales numbers, the news would be full of articles pointing out the risks to the company itself. Especially if it then
116 Logos : Very nice summary. This is not a slam at Airbus products, but you have to be intellectually honest and realize the fundamental differences in their b
117 Joni : I can't help but get the idea in my head, that you somehow approve of that kind of (non-repayable) subsidy to the (repayable) loan type because Boein
118 Halls120 : Do you call claiming that Boeing has a 60% profit margin on military contracts without any evidence to support it an "obvious fact?"
119 Joni : Pls see #108 about that.
120 GeorgiaAME : No, it means Boeing just hasn't done enough homework; they simply haven't delved deeply enough into the world wide financial markets and tapped into
121 Post contains images N844AA : I appreciate you trying to back up your assertions with links, but each of those articles is from a source with a clear slant, and one of those artic
122 Post contains links Joni : Do you have a problem with press releases? Since I'm such a nice guy, I dug up some more stuff for you to read, some even from the mainstream press!
123 N844AA : Sure, when they're being used as proof of a statement made by someone inclined toward the agenda of the releasing organization. If I wanted to, in Oc
124 Clickhappy : Pls see #108 about that. Even your grotesque twisting of the numbers does not equal 60%. 15% x 2 is 30%, so you are still only half way to your magic
125 Logos : Glad to see that you're bringing the same intellectual honesty & rigor to this debate as you did to the recent global warming thread. Government know
126 Joni : Why don't you calm down and re-read the posts in question. I was using 60% as an example of an inflated profit margin. I could equally have used any
127 Halls120 : That is exactly the post I was referring to. When you say "I just took those figures out of my hat, I didn't mean them to be taken literally," that d
128 Stitch : You know, we're really drifting off-topic here, and I admit I'm powerfully guilty of helping drive the bus off the road, myself. It has certainly been
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