USADreamliner From , joined Dec 1969, posts, RR: Posted (7 years 4 months 4 weeks 8 hours ago) and read 10109 times:
ANA will pay cash for at least 20% of its order for 50 787s, or at least ¥140 billion ($1.3 billion), from the proceeds realized from its hotel sales. It also will sell bonds and use loans backed by Japan Bank for International Cooperation. "We're not going back to the days of more than ¥1 trillion in debt," Kanazawa told Bloomberg
Oznznut From United States of America, joined Dec 2003, 153 posts, RR: 0
Reply 4, posted (7 years 4 months 4 weeks 5 hours ago) and read 9507 times:
I remember reading that "back in the day" when Braniff went to Seattle to take delivery of their first 707s, that the captain took a check with him for the full amount! Can't confirm if this is/was true, or just local legend.
777STL From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 4 months 4 weeks 4 hours ago) and read 9412 times:
Quoting Oldeuropean (Reply 5): What should Boeing do with more than a billion $ in cash???
ANA has to deliver some suitcases with bucks.
This sounds a bit ridiculous to me. Yeah sure
No it's not really, you just don't understand the true definition of cash. "Cash" in this context is any financial instrument used to pay for the aircraft up front rather than having to resort to financing. So in reality, "cash" will most likely end up being a physical check. But it's the same difference, it's just another way of saying they're going to pay for those 10 aircraft upfront.
Jj From Algeria, joined Jun 2001, 1227 posts, RR: 2
Reply 7, posted (7 years 4 months 4 weeks 4 hours ago) and read 9376 times:
Exactly. It's not that they're gonna have the money in suitcases (or LD3's for that matter!), but rather that the money is available straight out. Probably a bank transfer, or a check. That's a lot of money to have available straight out though...
Jfidler From United States of America, joined Aug 2000, 381 posts, RR: 0
Reply 8, posted (7 years 4 months 4 weeks 4 hours ago) and read 9313 times:
I wonder why they are not financing it? There is a benefit to leverage (gearing) as long as it doesn't get too much out of control. Aircraft are quite ideal for leverage, as they have a well-developed secondary market (easy to liquidate) and hold their value well.
Also, I suspect they will pay by wire transfer, not check, given the sums involved.
Centrair From Japan, joined Jan 2005, 3600 posts, RR: 20
Reply 10, posted (7 years 4 months 4 weeks 2 hours ago) and read 8746 times:
I am not as shocked about this. Japan is still a cash society. In general people in Japan don't like debt. (politicians exception) I bought my new Macbook with cash. Bought both of my cars (Rav 4 and a Daihatsu Latte) with cash. It is a little shocking to do this at first but you get used to carrying that kind of cash around when you make big purchase.
For ANA, they will own these aircraft and have NO DEBT on these aircraft. If they have a debt in the long run, it will not be as bad and it will get paid off in short order. It is the Japanese way.
Yes...I am not a KIX fan. Let's Japanese Aviation!
Dank From United States of America, joined Jul 2006, 937 posts, RR: 15
Reply 11, posted (7 years 4 months 4 weeks 2 hours ago) and read 8722 times:
Quoting KC135TopBoom (Reply 3): That is a check Boeing is going to love taking to the bank. Ã‚Â
Unless Boeing was the one doing the financing, what exactly does this actually have to do with Boeing? Just a different source of the money that they are going to get at the same time points. The difference is to ANA and any banks that they would have secured financing from.
RIXrat From United States of America, joined Nov 2005, 797 posts, RR: 0
Reply 14, posted (7 years 4 months 4 weeks 2 hours ago) and read 8450 times:
No suitcases full of greenbacks. It was a cash transfer using electronic bank accounts that can see your money coming in within seconds. Most of the world uses IBAN and then a SWIFT code to get it to the bank. Unfortunately, the US still uses ABA which is much more complicated.
As said above... it's not actually 'cash' as you think. It's done as a wire transfer from the airlines bank to Boeing's bank. If you watch the PBS special on building the Boeing 777 from a few years back, when United picks up their first aircraft they do it by just this manner.
Quoting Bmacleod (Reply 1): Just how common is paying cash for new aircraft purchases?
It's not uncommon..... but in todays world, it is somewhat rare.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
474218 From United States of America, joined Oct 2005, 6340 posts, RR: 9
Reply 20, posted (7 years 4 months 3 weeks 6 days 22 hours ago) and read 6899 times:
Boeing always gets paid in cash when they deliver an aircraft, just like a car dealer gets paid cash when it sells a car. The buyer borrows the money from a bank, loan company, etc. The bank, loan company, etc pays Boeing or the car dealer in full and the borrower pays back the bank, loan company, etc.
Boeing also has a division called Boeing Capital which provides loans for new airliners. If an airline use Boeing Capital they pay Boeing Commerical Aiurcraft Division in full when the aircraft is delivered. Its like taking the money out of your left pocket and putting it in your right pocket and it would seem similper to just give them the airplane and let them payments diredctly to the Boeing Commerical Aircraft Division. But to comply with the lending laws the money has to be transferred from on Boeing division to an other, its the only way to keep their debits and credits straight.
JFK787NYC From United States of America, joined Apr 2007, 813 posts, RR: 2
Reply 21, posted (7 years 4 months 3 weeks 6 days 21 hours ago) and read 6470 times:
I do not understand why everyone is causing commotion that this is a good thing for Boeing. It may not be a good thing for them at all, ANA may order another 10 787 in the very near future and sell these for at least 50-60 Million in profit each. So it lowers the cost on all the other 40 on order.
With Boeing there is no difference they get paid the day the plane leaves there facility. You people are talking like this means they can go and put this into a safety deposit box for a rain day. Cash doesn't really mean GREEN PAPER.
Boeing in 2007 made 4 Billion Net Profit, That is 4 Billion CASH without the 787, Imagine the type of money they will have after this puppy is in the air.
Lightsaber From United States of America, joined Jan 2005, 13923 posts, RR: 100
Reply 23, posted (7 years 4 months 3 weeks 6 days 20 hours ago) and read 6106 times:
Quoting Jj (Reply 7): Exactly. It's not that they're gonna have the money in suitcases (or LD3's for that matter!),
Now that sounds like the plot for Ocean's 14!
Quoting Centrair (Reply 11): For ANA, they will own these aircraft and have NO DEBT on these aircraft.
Extreme flexibility. Depreciate the airframes at whatever schedule they see fit. But... its sad they sold of the hotel operations. Historically, airlines with hotel operations have been able to use their revenue to get through tough times... (PanAm being the extreme example.) But if the funds are invested wisely, low debt will keep them profitable.
Quoting Carpethead (Reply 23): NH is currently operating with enormous profit/revenue, so no big surprise.
Good to hear. Now hopefully they use that money to keep buying more aircraft. But if their revenue is so good, why sell off the hotels? Note, I'm asking. I haven't pulled their quarterly report.
Fridgmus From United States of America, joined Oct 2006, 1442 posts, RR: 11
Reply 24, posted (7 years 4 months 3 weeks 6 days 19 hours ago) and read 5768 times:
Quoting Centrair (Reply 11): For ANA, they will own these aircraft and have NO DEBT on these aircraft. If they have a debt in the long run, it will not be as bad and it will get paid off in short order. It is the Japanese way.
What Centrair says sounds good to me, being an outsider. Can someone please tell me what's the big deal with ANA paying for their 787's this way?
The Lockheed Super Constellation, the REAL Queen of the Skies!
25 Max Q
: Northwest used to pay for all of their aircraft with cash. Those were the days...
: A check does better in a ceremony the bigger the better!
: The current credit crunch caused by the US sub-prime crisis is probably playing a part in this decision. Also it's a good way to get rid of excess cas
: A wise decision. BTW-it's a bank transfer via routing number. Though I would love to see guys with suitcases handcuffed to their wrists show up in Sea
: I don't think it matters much to Boeing. Whether you pay cash for a plane or go through mortgaging, Boeing still gets there money at once. I also thi
: Exactly. Hence my post above. Unless Boeing is the one that was to provide the financing, I don't see how this impacts Boeing at all. They get the sa
: Did ANA get a discount for their cash only purchase? Did Boeing throw in the floor mats and heated seats for free?
: Even if Boeing "finance" handles the cash flow they are a separate entity and they handle the risc maangement as a normal bank. This means that they m
: Not in Japan they won't. At least not the full amount, ever. They always take the long range view to a decision regarding cash.
: Why would they get a discount? All purchases are cash only, from Boeing's point of view, unless Boeing is doing the financing themselves (which is ra
: I think the importance of the topic is that an airline has $1.3 billion available in cash reserves that it can spend on aircraft instead of accuring i