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Richard Aboulafia's December Letter  
User currently offlineAutoThrust From Switzerland, joined Jun 2006, 1610 posts, RR: 9
Posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5915 times:

I did read this Letter and found some interesting and some highly disputable points made by Mr. R.Abulafia about Airbus and Mideast carriers.

http://www.richardaboulafia.com/shownote.asp?id=258

Quote:
Summary:
The recent Dubai Air Show confirmed what we’ve suspected for years: the Gulf States are converting their oil wealth into an aviation industrial policy.

If you take the current jet backlog and run it through Teal’s pricing estimates, you come up with impressive numbers: Mideast carriers represent 14% by value of the total Airbus/Boeing backlog.

It’s a bubble. Mideast origin & destination traffic growth figures don’t justify that backlog (again, see those Airbus and Boeing forecasts, which are based on traffic). But if a bubble is well-funded, it’s not a bubble.

They don’t need to make money, at least in the short term. Even an A380 won’t lose value the way money can—dollar reserves in central banks have lost 25-30% of their value over the past year.

The big beneficiary of this oil-fueled aviation market share grab: Airbus. The numbers are clear. After Dubai, Airbus has a 65% share of the total Mideast backlog by value. Mideast orders comprise 9% of Boeing’s backlog and 13% of its twin aisle backlog. But the Mideast market accounts for 19% of Airbus’s total backlog by value and an astonishing 33% of Airbus’s total twin aisle backlog. Some reasons why:

1. The A380. Airlines that focus on profitability can only use the behemothliner on a handful of routes. But if you’re out to grab market share, the A380 has its uses. Accordingly, Emirates is the only airline to make a large commitment to this plane, holding about 30% of the total order book.

These orders increase the mid-term outlook for this otherwise marginal aircraft and help Airbus’s widebody standing until the far more relevant A350 comes on line.


2. A350 XWB. Boeing has won the 240/280-seat battle. For profit-focused airlines, the 787 is basically unbeatable. But Mideast carriers are emphasizing bigger planes.

The 787-8/9 is playing a minor role in the Mideast, and for some odd reason Boeing hasn’t definitized the 787-10. This leaves the A350-900 to attack the 310-seat market. Also, while Boeing slowly contemplates its 777-X/787-10+ roadmap, the A350-1000 is starting to take orders from the almighty 777-300ER.

If a carrier really isn’t too concerned about fuel costs, even the pokey-looking A350-800 makes some sense. Hell, given Mideast carriers’ fuel cost apathy, even the fuelaholic A340-500/600 makes sense. Almost.


3. Politics. The US isn’t exactly winning the popularity war in the Mideast.
Favoring Europe for large aircraft contracts—civil and military—expresses diplomatic disapproval and avoids annoying the anti-US crowd. Access to European airports could play a role too.


1. Equity. Mideast sovereign wealth funds and their semi-private cousins could take a stake in Airbus parent EADS, replacing some of the stakeholder equity that’s withdrawing.
Think of this Mideast money as a Deus Ex Machina for Airbus.


2. Defense Contracts. Parent company EADS is a major beneficiary of the biggest oil-related defense contract of all time—the Saudi order for 72-96 Eurofighters. They’re also benefiting from tanker, helicopter, and missile sales. That revenue will help pay for Airbus’s ambitious product development needs.

After years of surreal, incompetent management, horribly dumb product launch decisions, dysfunctional unions, angry, bickering governments, and toxic office politics, Airbus, an aviation company, is saved by…high fuel prices

The only negative: As a result of this Mideast emphasis, Airbus is considerably more vulnerable than Boeing to an oil price drop or anything, such as a terrorist incident, that threatens the Mideast’s aggressive aviation market grab. Also, another complication (how I long for simplicity…):if Emirates and its wannabes are attacking legacy airline traffic with cheap A380s and A350s subsidized in part by EU development aid, and if the Mideast carriers are being favored with EU airport market access, then is Europe basically hurting its big international airlines to boost Airbus? Perhaps Air France/KLM, Lufthansa, and BA will start to notice.



What's your opinion to his statements? Will the Mideast bubble burst with so many orders? Is Airbus really much more vulnerable then Boeing to an oil price drop? Does Europe risk the future of main airlines(LH,KLM,BA,etc..) to boost Airbus sales?

[Edited 2008-01-18 03:16:37]


“Faliure is not an option.”
93 replies: All unread, showing first 25:
 
User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4166 posts, RR: 36
Reply 1, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5854 times:

That guy is a laughing stock with comments like these:

Quoting AutoThrust (Thread starter):
Accordingly, Emirates is the only airline to make a large commitment to this plane, holding about 30% of the total order book.

I guess a QF commitment for 20, an SQ commitment for 19 and a LH commitment for 15 frames have to be considered "minor orders" by his definition. I think he has lost touch with reality.

Quoting AutoThrust (Thread starter):
For profit-focused airlines, the 787 is basically unbeatable. But Mideast carriers are emphasizing bigger planes.

How comes he knows so well that the B787 is THE money maker of the future? Guess all current A350XWB customers are stupid and don´t know their business. By his logic they are all doomed to fail.

*SHAKEHEADSBIGTIME*



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineLifelinerOne From Netherlands, joined Nov 2003, 1941 posts, RR: 8
Reply 2, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5852 times:

I think we need to stay well clear of his comments as this is bound te become another A vs B thread.

There are some very, very, ignorant comments made by him, but that is what he does best and that is what we know of him. It is his opinion on matters on Boeing and Airbus. Let him rant and let us ignore him. I don't know why we are still reacting to this man who has been losing credibility faster than Airbus did with the A380!  Wink

Cheers!  wave 



Only Those Who Sleep Don't Make Mistakes
User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 3, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5821 times:

Richard linked his credibility to the failure of the A380. He participated in a Boeing financed study dismissing the A380. since then allmost all flag carriers ordered / reordered the darn thing and other consider to jump on the train. The endlessly foreseen cancellantion because of the delays didn't happen. It seems to operate pretty reliable. Richard is getting pretty lonely in his A380 views, but has to continue to dismiss it even if 500 are sold tommorow.


On the A350 the same thing, he had to keep rising the bar for it to be acceptable. Now many respectable airlines / leasing companies ordered it he has decided to look for alternative bashing areas.

Quoting AutoThrust (Thread starter):
If a carrier really isn’t too concerned about fuel costs, even the pokey-looking A350-800 makes some sense.

I think many airlines think the A350-800 will have superior payload range over the 787-9 whose range was adjusted downwards recently (RA obviously didn't care much..) . RR will take the lessons learned from the 787 engines, improve, adjust and hang them under the A350 XWB.



Quoting AutoThrust (Thread starter):
After years of surreal, incompetent management, horribly dumb product launch decisions, dysfunctional unions, angry, bickering governments, and toxic office politics, Airbus, an aviation company, is saved by…high fuel prices

Can we expect Richard to sharpen his knives and jump on Boeing now? Somehow I doubt it..

Quoting AutoThrust (Thread starter):
Boeing has won the 240/280-seat battle.

Looking out of the window looking at our local hub I think the A330 won that battle and Boeing is trying to fight back with the 787.


User currently offlineAutoThrust From Switzerland, joined Jun 2006, 1610 posts, RR: 9
Reply 4, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5806 times:

Quoting Flying-Tiger (Reply 1):
I guess a QF commitment for 20, an SQ commitment for 19 and a LH commitment for 15 frames have to be considered "minor orders" by his definition. I think he has lost touch with reality.

He said EK is the only Airline to make a large commitment to the A380 which is true, don't you think?

Quoting LifelinerOne (Reply 2):
I think we need to stay well clear of his comments as this is bound te become another A vs B thread.

Yes we should look at this comments in a objective way. Even some comments are odd, he has a point as Airbus does depend quite a bit from Mideast carriers.(19%) As they want to grab more market share this figure could raise.

[Edited 2008-01-18 03:52:42]


“Faliure is not an option.”
User currently offlineFlying-Tiger From Germany, joined Aug 1999, 4166 posts, RR: 36
Reply 5, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5778 times:



Quoting AutoThrust (Reply 4):
He said EK is the only Airline to make a large commitment to the A380 which is true, don't you think?

What do you define as large? For me an order for more than 10 widebodies has to be considered large - if you order 15, 19 or 20 of them you´re putting serious money on the table - in case of the A380 a 15 frame order will cost you in the range 3 to 4 billion USD, a 20 frames order in the range 4 to 5 billion USD. That IS a large order. No doubt that Emirates has places the largest order for the A380 - but others are large as well.



Flown: A319/320/321,A332/3,A380,AT4,AT7,B732/3/4/5/7/8,B742/4,B762/763,B772,CR2,CR7,ER4,E70,E75,F50/70,M11,L15,S20
User currently offlineLifelinerOne From Netherlands, joined Nov 2003, 1941 posts, RR: 8
Reply 6, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5778 times:



Quoting AutoThrust (Reply 4):
Yes we should look at this comments in a objective way. Even some comments are odd, he has a point as Airbus does depend quite a bit from Mideast carriers.(14%) As they want to grab more market share this figure could raise.

Agreed. However, I think the balance of the orders would be different if the USA wasn't running around in Iraq. Now, don't make this political, I think it hurted Boeing more than it did Airbus. I also agree that depending to much on Middle-East carriers isn't good, but you don't point customers to the door. Never, ever.

Cheers!  wave 



Only Those Who Sleep Don't Make Mistakes
User currently offlineScbriml From United Kingdom, joined Jul 2003, 12898 posts, RR: 46
Reply 7, posted (6 years 11 months 2 weeks 1 day 4 hours ago) and read 5779 times:
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Quoting AutoThrust (Thread starter):
It's a bubble. Mideast origin & destination traffic growth figures don't justify that backlog

Frankly, I'm surprised that RA doesn't grasp the simple concept that the EK's, EY's and QR's of this World are not about O&D traffic, they're all about transit and connecting A to B via their home hub.  Wow!

Quoting AutoThrust (Thread starter):
Accordingly, Emirates is the only airline to make a large commitment to this plane

I guess he conveniently forgot about the not insignificant orders from those blue-chip airlines like SQ, BA, AF, LH, QF. Last time I checked, they are all profit-driven.  sarcastic 

Quoting AutoThrust (Thread starter):
even the pokey-looking A350-800

Despite RA's dislike of the A350 generally, and his irrational loathing of the -800 in particular, it's interesting to note that the -800 accounts for over 40% of A350 sales. It seems the airlines feel differently.  scratchchin 

I would go on, but frankly, his asinine comments aren't worth the effort. no 



Time flies like an arrow, but fruit flies like a banana! #44cHAMpion
User currently offlineScbriml From United Kingdom, joined Jul 2003, 12898 posts, RR: 46
Reply 8, posted (6 years 11 months 2 weeks 1 day 3 hours ago) and read 5765 times:
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Quoting AutoThrust (Reply 4):
He said EK is the only Airline to make a large commitment to the A380 which is true, don't you think?

Define large. BA (the most recent A380 customer) has commitments for 19, I wouldn't call that a small commitment. Ditto SQ, QF, LH.

If you're going to set the bar at 50+ to define a "large commitment", how many airlines have a "large commitment" to the 777? The man is just twisting words to fit his personal agenda.



Time flies like an arrow, but fruit flies like a banana! #44cHAMpion
User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 61
Reply 9, posted (6 years 11 months 2 weeks 1 day 3 hours ago) and read 5701 times:



Quoting Flying-Tiger (Reply 1):
Quoting AutoThrust (Thread starter):
Accordingly, Emirates is the only airline to make a large commitment to this plane, holding about 30% of the total order book.

I guess a QF commitment for 20, an SQ commitment for 19 and a LH commitment for 15 frames have to be considered "minor orders" by his definition. I think he has lost touch with reality.

The guy is a clown, plain and simple. There is not one single Cheerleader on here who is more selectively myopic.

Quoting Flying-Tiger (Reply 1):
Quoting AutoThrust (Thread starter):
For profit-focused airlines, the 787 is basically unbeatable. But Mideast carriers are emphasizing bigger planes.

How comes he knows so well that the B787 is THE money maker of the future? Guess all current A350XWB customers are stupid and don´t know their business. By his logic they are all doomed to fail.

There is no way the A350XWB will beat the 787 at anything. The only reason any are selling is because Airbus are subsidised and they are almost giving them away. Duh.

Quoting AutoThrust (Thread starter):
Defense Contracts. Parent company EADS is a major beneficiary of the biggest oil-related defense contract of all time—the Saudi order for 72-96 Eurofighters. They’re also benefiting from tanker, helicopter, and missile sales. That revenue will help pay for Airbus’s ambitious product development needs

Good job Boeing doesnt have a military or space arm to subsidise its struggling civ-av projects, eh?

Quoting AutoThrust (Thread starter):
Even an A380 won’t lose value the way money can—dollar reserves in central banks have lost 25-30% of their value over the past year.

EVEN an A380?

Wow. Just, wow.

Quoting Scbriml (Reply 7):
Frankly, I'm surprised that RA doesn't grasp the simple concept that the EK's, EY's and QR's of this World are not about O&D traffic, they're all about transit and connecting A to B via their home hub.

He's an analyst - he must surely grasp it. He just chooses to ignore it - he is ignorant. What an embarassment he must be to all the sensible, reasoned, normal Americans out there who do not deserve this buffoon being their self-appointed mouthpiece about all things airline. Sad really. If we had someone like this on our side I'd be devastated.

Quoting Scbriml (Reply 7):
I guess he conveniently forgot about the not insignificant orders from those blue-chip airlines like SQ, BA, AF, LH, QF. Last time I checked, they are all profit-driven.

MH? TG? Crazy really.

Quoting AutoThrust (Thread starter):
After years of surreal, incompetent management, horribly dumb product launch decisions,

*cough*

Fasteners.

*cough*

Quoting LifelinerOne (Reply 6):
Agreed. However, I think the balance of the orders would be different if the USA wasn't running around in Iraq.

Yup. Smacks of bitterness if you ask me. He'd be crowing from the rooftops if half the world had not turned their back on the USA and US products over their actions in the Middle East. I somehow dooubt he'd be denigrating EK and their "wannabees" then, if the 787 had gained the upper hand and they had ordered a bunch of 748s....



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineMoo From Falkland Islands, joined May 2007, 4090 posts, RR: 4
Reply 10, posted (6 years 11 months 2 weeks 1 day 3 hours ago) and read 5654 times:

Well, he certainly has a chip on his shoulder, doesn't he!

User currently offlineCol From Malaysia, joined Nov 2003, 2129 posts, RR: 22
Reply 11, posted (6 years 11 months 2 weeks 1 day 3 hours ago) and read 5654 times:

I think even we over here know RA has totally lost it. He seems to live in this dreamworld, while reality tries to wake him up. Said it before, New Unbiased Expert Required.

User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 61
Reply 12, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5571 times:



Quoting Col (Reply 11):
I think even we over here know RA has totally lost it. He seems to live in this dreamworld, while reality tries to wake him up. Said it before, New Unbiased Expert Required.

Thing is, there are a few people on here who I regard as top class analyst material - some of the Americans in particular are very, very switched on, and could probably do my job better than I can on some projects. I am an analyst by trade, and I know a couple of others on here who are as well, and you get to know the signs.

I work with analysts and know some genuinely brilliant ones, and that is why RA's comments are so daft. We know he is a bright enough cookie as he does often know what he's talking about, and I should say at this point his company are top class, so why spout off like he does? Is it the publicity? Does he suck up the cheerleader fraternity for fame and fortune? Why on earth would you want to? I'd love to meet him and ask him why. There has to be a reason for it - i cannot accept it is just vox pops for the xenophobic masses, he is smarter than that.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineAutoThrust From Switzerland, joined Jun 2006, 1610 posts, RR: 9
Reply 13, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5503 times:



Quoting Flying-Tiger (Reply 5):
if you order 15, 19 or 20 of them you´re putting serious money on the table - in case of the A380 a 15 frame order will cost you in the range 3 to 4 billion USD, a 20 frames order in the range 4 to 5 billion USD.

Agreed, you are right.

Quoting Scbriml (Reply 7):
that the EK's, EY's and QR's of this World are not about O&D traffic, they're all about transit and connecting A to B via their home hub

He does acknowledge this strategy but must see some risk in it.

Quote:

Mideast airlines are hunting other people’s traffic. Yep. Singapore has done a great job playing the Sixth (and Fifth) Freedom game for years—using Changi as a hub for traffic between two other points. Now imagine the Mideast as Singapore, only with better geography and an awful lot more cash. Emirates is just the start. Qatar, Etihad, and Yemenia (Yemenia???) all want in on the action too.




“Faliure is not an option.”
User currently offlineLifelinerOne From Netherlands, joined Nov 2003, 1941 posts, RR: 8
Reply 14, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5474 times:



Quoting CHRISBA777ER (Reply 12):
I work with analysts and know some genuinely brilliant ones, and that is why RA's comments are so daft. We know he is a bright enough cookie as he does often know what he's talking about, and I should say at this point his company are top class, so why spout off like he does? Is it the publicity? Does he suck up the cheerleader fraternity for fame and fortune? Why on earth would you want to? I'd love to meet him and ask him why. There has to be a reason for it - i cannot accept it is just vox pops for the xenophobic masses, he is smarter than that.

I know! A few years ago his posts and comments were more balanced and more in touch with the things happening in the world. For one reason or the other, he has become more "radical" in the last few years. Maybe he as a professional grudge with Airbus in the past? Who knows? I do know that the man is becoming more unbalanced with every post he makes. If I was the president of the Teal Group, I would become more nervous about him as he could do potential damage to the customer base of the company, even when Richard makes these comments on his own website. He is letting his feelings getting in the way with good, solid data. Every analyst will try to avoid that to all cost! Maybe he wants to be the new Scott Carson in the future?

Cheers!  wave 



Only Those Who Sleep Don't Make Mistakes
User currently offlineSlz396 From , joined Dec 1969, posts, RR:
Reply 15, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5453 times:

Hasn't this letter been discussed before?

The fact that nobody remembers it, is likely because:

-) it didn't contain much noteworthy news AGAIN

-) it is just more of the same ranting against anything which is basically not American AGAIN

-) he is proven wrong on any outlook he provides anyway time and AGAIN

-) even his biggest fans are beginning to see the light and aren't really taking him seriously any longer, although many won't say so. You'll notice the number of posts in his defence has dropped sharply over the past few months: not a surprise really as nobody wants to stand by such a chronic looser!

I think the last straw that broke the camel's back was ILFC's public lashing out to a certain analyst being completely out of sync with reality for daring to question the small size of their A350 order (ILFC had it noted the initial A350 order now matched their initial order for the 787, despite that plane being smaller and smaller planes tend to sell in higher numbers).

I think that if Richard dares to write a single negative line about ILFC and the A350, he's guaranteed to be slashed even more brutally by them in the text of their next A350 order announcement which we know they are currently preparing for.

Will there be a January letter from him, or is he still an intern in on of the mental clinics around Boston?
Rumour has it he was taken there last week, when Airbus announced superb overall AND widebody sales for this year (despite his repeated 'worries' they were soon going to become irrelevant) whereas Boeing had to admit they have well and completely f*cked up that so much praised 'revolutionary' 787 integrating assembly method which in fact it just tried to copy from Airbus.


User currently offlineStitch From United States of America, joined Jul 2005, 31439 posts, RR: 85
Reply 16, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5443 times:
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While RA occasionally makes a valid point, for the most part, his "Boeing Can Do No Wrong, Airbus Can Do No Right" attitude had made him become irrelevant. Scott Hamilton is starting to come across the same, just in the opposite direction (Airbus Rulz, Boeing Droolz).

I look to neither for insightful commentary now.


User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 61
Reply 17, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5415 times:



Quoting AutoThrust (Reply 13):
Quoting Scbriml (Reply 7):
that the EK's, EY's and QR's of this World are not about O&D traffic, they're all about transit and connecting A to B via their home hub

He does acknowledge this strategy but must see some risk in it.

Of course there is risk in it -

Quoting Stitch (Reply 16):
While RA occasionally makes a valid point, for the most part, his "Boeing Can Do No Wrong, Airbus Can Do No Right" attitude had made him become irrelevant. Scott Hamilton is starting to come across the same, just in the opposite direction (Airbus Rulz, Boeing Droolz).

I look to neither for insightful commentary now.

I dont think Scott is in the same league to be fair but yes, I do concede, that occasionally his musings can be a little coloured.

Thing is, theres not much you can say negative about Boeing at the moment. For all the furore over fasteners (and my comment above was firmly TiC I assure you) and the lack of sales for the pax variant of the 748, everything is really going swimmingly. The 787 is delayed a bit but its no massive deal really and we'll all have forgotten all about the delays in six months or so, whilst the 748 programme will do well even if it sells not one single pax variant so well has the 748F done. The 777 is sold out for years and the 737 line likewise. Hard to pick holes in that really. If you could, I would be interested to see if anyone would, but you cant really.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10253 posts, RR: 97
Reply 18, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5377 times:
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Quoting Stitch (Reply 16):
I look to neither for insightful commentary now.

And with guys whose track records bespeak their supposed intellect, that's really sad.

Don't get the scale of his beef with the A380. Presumably sour grapes (which is again sad) now that the plane is proving itself in service, and then some.
Don't get his gripe with the A350-800 - it currently accounts for 41% of the firm backlog. There's no meaningful evidence anywhere that it will materially less fuel efficient than the 787-9.

And the icing on the cake - Airbus are at risk from LOWER fuel prices (despite his insinuations/accusations that Airbus's planes are, what was the word? Ah yes. "Fuelaholic" )  biggrin 


It's almost worth putting this OP in Non-Av, such is its relevance.

Regards


User currently offlineSlz396 From , joined Dec 1969, posts, RR:
Reply 19, posted (6 years 11 months 2 weeks 1 day 2 hours ago) and read 5352 times:



Quoting Astuteman (Reply 18):
with guys whose track records bespeak their supposed intellect, that's really sad

To make a carrier as professional analyst, you don't need to predict the future even remotely correctly for your customers or audience, all you need to do is to predict the future the way your customers and audience wants it. You have to tell them what they want to hear, only then will they listen to you.

Obviously, as time goes by and reality proofs you wrong along the way, much of your customers and audience will go away as they have seen you're not the next prophet and only the die-hards remain, so honouring the above principle, the only thing left it to do for such a fallen analyst is to become more radical too.

R.A. is a textbook example of that.


User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 61
Reply 20, posted (6 years 11 months 2 weeks 1 day 1 hour ago) and read 5323 times:



Quoting Slz396 (Reply 19):
Quoting Astuteman (Reply 18):
with guys whose track records bespeak their supposed intellect, that's really sad

To make a carrier as professional analyst, you don't need to predict the future even remotely correctly for your customers or audience, all you need to do is to predict the future the way your customers and audience wants it. You have to tell them what they want to hear, only then will they listen to you.

Obviously, as time goes by and reality proofs you wrong along the way, much of your customers and audience will go away as they have seen you're not the next prophet and only the die-hards remain, so honouring the above principle, the only thing left it to do for such a fallen analyst is to become more radical too.

R.A. is a textbook example of that.

Not sure I agree with that. People who are smart enough to appoint an analyst and to attach any kind of gravitas to what he says are smart enough to know when they are being bullshi**ed. The airline and shipping industry is littered with the corpses of companies whose management thought they knew it all and didnt listen to what the analysts say. Any analyst who tells companies what they want to hear is going to have a very short career if it turns out he is wrong. Bold predictions are a dumb idea - best to be as vague as possible!  Wink

We arent soothsayers you know - there isnt any mystical crystal balls etc - at least 50% of our job is explaining why the market is behaving the way it is RIGHT NOW, and what it is likely to do in the immediate term. Very occasionally you talk about a longer term picture than that but not very often - not in my job anyway.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
User currently offlineLifelinerOne From Netherlands, joined Nov 2003, 1941 posts, RR: 8
Reply 21, posted (6 years 11 months 2 weeks 1 day 1 hour ago) and read 5317 times:



Quoting Slz396 (Reply 15):
Will there be a January letter from him,

Have you looked at his website? There is already a January letter.

I think Richards comment on the delay of the B787 is that the B787 is a marvel for the industry and a very complex aircraft and that delays would be expected but are not hurting the credibility of Boeing and doesn't hurt it's customers as it is the only aircraft avialable for profit focused airlines. The delays on the A380 were just faults because of misuse of the oil dollars that Airbus is flooding with.

Now, don't get me wrong, the B787 is a marvel for the industry and is a very complex plane! I hope to see it fly soon!

Cheers!  wave 



Only Those Who Sleep Don't Make Mistakes
User currently offlineVinnieWinnie From United States of America, joined Nov 2005, 803 posts, RR: 0
Reply 22, posted (6 years 11 months 2 weeks 1 day 1 hour ago) and read 5283 times:

Whilst it is clear that Aboulafia totally hates Airbus, I think his comments make sense:

Quoting Aboulafia:
It’s a bubble. Mideast origin & destination traffic growth figures don’t justify that backlog (again, see those Airbus and Boeing forecasts, which are based on traffic). But if a bubble is well-funded, it’s not a bubble



Quoting Aboulafia:
As a result of this Mideast emphasis, Airbus is considerably more vulnerable than Boeing to an oil price drop or anything, such as a terrorist incident, that threatens the Mideast’s aggressive aviation market grab

It is a risk: One day there will be 1 or 2 winners in the Middle-East: And I fear that Etihad or Qatar for example will not be able to survive against mighty Emirates that may indeed have problems should Dubai suffer from an economic crisis!


User currently offlineSlz396 From , joined Dec 1969, posts, RR:
Reply 23, posted (6 years 11 months 2 weeks 1 day 1 hour ago) and read 5279 times:



Quoting CHRISBA777ER (Reply 20):
Not sure I agree with that. People who are smart enough to appoint an analyst and to attach any kind of gravitas to what he says are smart enough to know when they are being bullshi**ed. The airline and shipping industry is littered with the corpses of companies whose management thought they knew it all and didnt listen to what the analysts say. Any analyst who tells companies what they want to hear is going to have a very short career if it turns out he is wrong. Bold predictions are a dumb idea - best to be as vague as possible!

The fact is, he IS long time finished with the customers from inside the industry.
His clearly biased report on the A380's viability made him a total write-off to anything or anybody related with Airbus and the fact that his findings are now clearly shown to be way off, makes him persona non grata at 3rd parties too.
I think even the customers from the Boeing camp would be very cautious to rely on his advice, since they know all too well he's not to be believed either.

That leaves him only with 'customers' from the press, who want him for the quick quotes, type Andrea from Bloomberg, hence he's becoming ever more biased and ever more outspoken. You need to provide your customers with some usable material..

It is interesting to see that whereas he still based his A380 bashing and doomingly negative outlook on (twisted) facts and (worst case scenario) figures, he now bases his A350-800 critic on the pure looks of a plane alone, disregarding even real sales figures and indisputable facts!


User currently offlineCHRISBA777ER From UK - England, joined Mar 2001, 5964 posts, RR: 61
Reply 24, posted (6 years 11 months 2 weeks 1 day 1 hour ago) and read 5275 times:



Quoting Slz396 (Reply 23):
Quoting CHRISBA777ER (Reply 20):
Not sure I agree with that. People who are smart enough to appoint an analyst and to attach any kind of gravitas to what he says are smart enough to know when they are being bullshi**ed. The airline and shipping industry is littered with the corpses of companies whose management thought they knew it all and didnt listen to what the analysts say. Any analyst who tells companies what they want to hear is going to have a very short career if it turns out he is wrong. Bold predictions are a dumb idea - best to be as vague as possible!

The fact is, he IS long time finished with the customers from inside the industry.
His clearly biased report on the A380's viability made him a total write-off to anything or anybody related with Airbus and the fact that his findings are now clearly shown to be way off, makes him persona non grata at 3rd parties too.
I think even the customers from the Boeing camp would be very cautious to rely on his advice, since they know all too well he's not to be believed either.

That leaves him only with 'customers' from the press, who want him for the quick quotes, type Andrea from Bloomberg, hence he's becoming ever more biased and ever more outspoken. You need to provide your customers with some usable material..

It is interesting to see that whereas he still based his A380 bashing and doomingly negative outlook on (twisted) facts and (worst case scenario) figures, he now bases his A350-800 critic on the pure looks of a plane alone, disregarding even real sales figures and indisputable facts!

I doff my cap to you Sir - an excellent summary, and bang on the money from where i'm sitting.



What do you mean you dont have any bourbon? Do you know how far it is to Houston? What kind of airline is this???
25 Post contains images Andrej : I believe that it was proved that he is a tool regarding his comments about A350WXB on Bloomberg. I have no personal agenda for Boeing or Airbus or Mr
26 Stitch : I don't believe EK and QR are buying what they are buying with the idea to run pure O&D traffic. I believe they are buying them with the intent to ma
27 Slz396 : Thank you for the kind words, but really, no special respect is due for showing just the obvious. Have a look at this topic: 26 replies and not a sin
28 Post contains links Stitch : Well just John Leahy told analysts that up to 27% of Airbus' order book could be in jeopardy of cancellation if there was a major downturn in the indu
29 Cornish : I trust Boeing have the common sense to distance themselves as far away from this guy and his comments. Well its my experience that the ones who spen
30 Post contains images Scbriml : Nearly all of us know this to be the case. I'd go as far as to say EK (to a lesser degree QR) has already achieved it. Their pax growth rates would c
31 DistantHorizon : Please guys, make us all a favor: stop talking about what this Aboulafia says. He will keep making money as long some people keeps listening/discussin
32 Post contains images R2rho : How can I become an aviation analyst like him? There are quite a few people in this forum that would be very well qualified - and probably make much b
33 Tommytoyz : "Final thoughts. Of the top ten oil exporters, only one—Norway—is a free and open society. Mexico ain’t too bad. Two—Kuwait and the UAE—are
34 MotorHussy : Yes and it's clearly not a blue one; this man has spurned all rational objectivity and is behaving like a cornered creature. There is no credibility
35 Post contains links OldAeroGuy : Before you pick Mr. Aboulafia's bones too clean, read or re-read the Morgan Stanley analysis in this link. http://www.leeham.net/filelib/A380DEBATEFI
36 Vfw614 : Richard made my day once more. What a funny guy. I Better to have a high percentage of some oil-rich mid-east carriers as customers than all those ban
37 ContnlEliteCMH : I think you're outlining two very different things here. Being in touch with the world is perhaps a roundabout way of saying "correct". But in my opi
38 Stitch : Thank you for showing us (and I include myself here) a different view. His comments, while still inflammatory (especially to an Airbus supporter) do
39 Post contains links Observer : I dunno. Hamilton is back after a hiatus and his stuff seems pretty tame, even with the 787 delays this week. If he was as bad as all that, you'd thi
40 Post contains images Mariner : I'll discuss what he has written - now or in the past - anytime. Happily. Mr. Aboulafia's dislike of the A380 is well-known, and is, from my point of
41 Post contains links Keesje : " target=_blank>http://www.leeham.net/filelib/A380DE...L.pdf I did, but see no surprises here Richard Aboulafia believes the A380 is a tremendously e
42 PVG : if Emirates and its wannabes are attacking legacy airline traffic with cheap A380s and A350s subsidized in part by EU development aid, and if the Mide
43 OldAeroGuy : Are you missing the point? How many A380's will be delivered by 2015? Aboulafia said 200. Morgan Stanley said 239. If Airbus can get to a 44 per year
44 PVG : The other issue is that I see a lot of crowing about the performance of the A380. To date there's only 1 in service. Don't you think it might be prude
45 ContnlEliteCMH : For what it's worth, I don't understand that either. A quick check of my profile will show that I have hitched my career "wagon" to a software maker
46 Mariner : I see no "crowing" in this thread. Puzzled by your comment, I read the thread again, and I still didn't find any crowing. Maybe I missed one? If you
47 Stitch : It is important to remember that for the past two years, a number of A380s have been flying huge numbers of miles in testing, certification, and rout
48 PVG : I see people saying that RA's analysis was wrong on the A380 and that he's a fool. I am not referring to the technical performance of the aircraft (I
49 Ikramerica : You can call him a clown all you want. It's funny to watch people mostly ignore what he is saying. But, frankly, the Middle East IS rewarding Airbus f
50 Mariner : While I do not think Mr. Aboulafia is any kind of a fool, I gauge his statements with regard to the A350XWB, and especially at at the Paris Air Show,
51 Post contains images Scbriml : Frankly, I think the evidence for this is thin at best. EK - will be the World's largest 777 operator, has a large fleet of 748Fs on order. QR - larg
52 R2rho : Certainly. But his overly critical opinion of Airbus while sparing Boeing makes him lose credibility, even if he may predict something correctly. He
53 Post contains images Leskova : That's a very big if... ... which is why you see EK getting access to all of the airports in Europe it wants to fly to, for example STR and TXL... oh
54 Post contains links Cpd : Boeing would just as much have loved to have those orders, if Airbus didn't get them. Emirates has a massive 777 fleet. The operators of airlines in
55 PVG : You are comparing apples to oranges. The test is whether these airlines can fill the plane on a regular basis. There's never been such a large plane
56 Moo : The thing that quite a few people don't understand is that EKs business plan doesn't have to be viable in the long term - it only has to be viable for
57 Stitch : If we had a cigar smiley, I'd give you one, sir.
58 Lumberton : Will Germany, France, Spain, the UK, U.S., et al, allow this to happen? It will be interesting to see national interests come into play.
59 Stitch : One imagines that the reason EK wants so many A380-800s - and would love A380-900s - is that it allows them to maximize the amount of traffic they ca
60 Moo : I'm not sure there is really anything they can do, other than either prop failing companies up with public money or deny landing rights to foreign ai
61 Post contains images Moo : Thanks
62 Lumberton : Well, yes, those are possible (and likely IMO) resonses) if EK starts poaching pax and the established carriers respond by cutting costs and--jobs. L
63 Moo : I honestly do not see the European and Pacific legacies to be those mainly at risk here - its the US legacies, already on shaky ground, that are the
64 Stitch : Likely not directly, but instead through the relaxation of anti-trust regulations to allow more legacies to merge. Assuming DL and NW go through, tha
65 PVG : They could buy smaller planes that can connect almost any 2 points on the earth non-stop and let EK get stuck with the back-packers who want to pay $
66 ContnlEliteCMH : Not if this taxpayer gets a chance to vote on it. I'd be careful equating their current profitability and growth to being well-run. Profits indicate
67 PVG : Yes, and I assume that this was done with private capital asking for the usual returns?
68 Mariner : I can't imagine who said it, I can't imagine it happening and I have some difficulty imaging that is what Emirates wants to do. They have already dec
69 Post contains images PM : 1. Do you seriously expect that to happen any time in the next decade or two? Oil at $25 a barrel? Seems improbable. 2. It is precisely to prepare fo
70 Post contains links and images Astuteman : You really want to go into bat in RA's defence based on a document which pre-dates the last of the delay announcements? .... OK www.leeham.net/fileli
71 OldAeroGuy : It never was. Dr. Lawrence had deliveries of 50 per year in his forecast, something that Airbus never planned on and may not have the capability of d
72 Post contains images Wingspan : Sometimes I wonder if he has five or six different accounts on here just so he can post his latest yak.
73 Cpd : I know. What's his excuse for Qantas having 20 A380's on order? Oh, I suppose we are trying to get some kind of concessions from someone.. Ah, I forg
74 Post contains images PM : Compensation for late deliveries of A330s?
75 Astuteman : The Morgan Stanley report states RA's demand outlook as follows:- 2007 9 2008 28 2009 30 2010 22 2011 20 2012 20 2013 20 2014 20 2015 20 My spreadshe
76 Post contains images Scbriml : Quite. I don't believe any business exists on the basis of wanting to "destroy" its competitors. EK has a solid business case, shows solid profits an
77 BestWestern : Bmi baby exisited originally to kick Go out of East Midlands...
78 Moo : Airbus was set up specifically to prevent US domination in the airliner industry - that was the foremost goal of the cooperating governments at the t
79 PVG : So, what are we talking about then? To me a business/commercial case means that you make an investment based on a plan that then gets executed which
80 Scbriml : If true, that's still different from having a business objective of "destroying" your competition. I would suggest that any business that concentrate
81 Moo : In a saturated market, and lets face it, long haul to the US or Europe is not far from saturation point, the only place to take market share from is
82 Scbriml : Which is exactly my point. Which is nothing more than normal business competition. If the US legacies cannot cope with EK (or QR or EY) in markets wh
83 Astuteman : That assumes no growth, which is patently fallacious in the medium/long term. Regards
84 Post contains links OldAeroGuy : Fair enough, I didn't do the math, merely read the text. From the bottom of the first page in the Morgan Stanley report: http://www.leeham.net/fileli
85 Mariner : And I am talking about exactly the same thing. I have worked in the toughest free market all my life, and in the US, that relies entirely on investme
86 PVG : No you are not! You are talking about a government deciding that they are going to build this business regardless of whether it ever made a profit or
87 Scbriml : Which Government made this decision? This is a guess, but I'm doubtful anyone can produce any evidence to support the supposition that Airbus was set
88 Mariner : No, sir. In the case in question - reply #85 - I was talking specifically about profit oriented business, both in the US and other countries. As to "
89 ContnlEliteCMH : Moo said it in this thread. See below. I have not expressed any agreement with his observation. I was only playing a hypothetical. But I agree with y
90 PVG : Airbus was established to establish a civil aircarft proudction base in Europe to counter the US domination of the industry at the time and to create
91 Post contains images Mariner : Of course I "have nothing else to say". I gave you fair warning when this began: "I don't know" and "I don't care" being the operative phrases. I don
92 PVG : let me re-phrase: Let's just agree to disagree! OK? Or, do you want to continue?
93 Post contains images Astuteman : I've taken a bit of time to respond, OAG, because I will only ever respect you for the knowledge you provided, in helping me to understand a little b
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