Sxf24 From United States, joined Aug 2007, 635 posts, RR: 0 Posted (1 month 1 week 5 days 21 hours ago) and read 11200 times:
Due to the credit crisis and the inability of many airlines to obtain financing, analyst Richard Safran has lowered delivery forecasts for Boeing to 462 aircraft in 2009, down from an earlier estimate of 489, and 392 in 2010, down from 524.
The production rates reductions - 5% in 2009 and 23% in 2010 - are substantial and if the credit crisis continues, would likely be matched by Airbus as their North American, Australian and European customers struggle to find financing.
Khobar From United States, joined Mar 2006, 1758 posts, RR: 2 Reply 1, posted (1 month 1 week 5 days 21 hours ago) and read 11105 times:
Funny thing - yesterday I went into three different stores and was offered credit cards in each right when I walked in the door.
Delta still is trying to get me hooked up with AE. Now another airline is trying to get in on the act, and my mail is getting heavier with credit offers.
JayinKitsap From United States, joined Nov 2005, 597 posts, RR: 0 Reply 2, posted (1 month 1 week 5 days 20 hours ago) and read 10922 times:
If credit markets are tight and the industry performance is tough both A & B will both see deferrals and cancellations. As I recall, Airbus has a larger backlog % with leasing companies, also A has been known to do large orders to startups. In the past these have had high proportions of defaults.
I think that both companies have had a lot of "hold" calls. Many may be short term until the current meltdown is sorted out.
Stitch From United States, joined Jul 2005, 12623 posts, RR: 53 Reply 4, posted (1 month 1 week 5 days 19 hours ago) and read 10889 times:
I'm assuming they predict similar drops in Airbus deliveries? Boeing's exposure is around the world, not just the United States, so what hits their customers should by extension also affect Airbus'.
Frankly, it seems like a significant over-reaction to me. The world governments are still struggling on figuring out how to unfreeze the markets, but I expect results in weeks, not months or years.
Revelation From United States, joined Feb 2005, 2562 posts, RR: 1 Reply 5, posted (1 month 1 week 5 days 19 hours ago) and read 10823 times:
Quoting Stitch (Reply 4): I'm assuming they predict similar drops in Airbus deliveries? Boeing's exposure is around the world, not just the United States, so what hits their customers should by extension also affect Airbus'.
Perhaps, but Airbus seems to have been doing rather well in China of late, and I've read that China is not being as impacted by the credit crisis as the rest of the world. It seems Chinese people tend to pay cash for most everything, and their banks didn't buy into the mortgage based securites to the same degree as did most of the rest of the world's banks.
I guess time will tell as to which company is more impacted.
Khobar From United States, joined Mar 2006, 1758 posts, RR: 2 Reply 6, posted (1 month 1 week 5 days 19 hours ago) and read 10753 times:
Quoting Revelation (Reply 5): Perhaps, but Airbus seems to have been doing rather well in China of late, and I've read that China is not being as impacted by the credit crisis as the rest of the world. It seems Chinese people tend to pay cash for most everything, and their banks didn't buy into the mortgage based securites to the same degree as did most of the rest of the world's banks.
2006:
"If you are not keeping a close eye on the Chinese banking system, perhaps you should be. Bill McDonough, the ex-chief of New York Federal Reserve, let slip at a conference in Italy this week that China's rickety credit structure was the biggest single menace to the world economy." http://www.telegraph.co.uk/finance/c...illes-heel-of-the-global-boom.html
2007:
"BEIJING: After appearing immune to the turmoil unleashed on world markets from high-risk home lending in the United States, China suffered its first serious setback Friday from the meltdown in subprime loans." http://www.iht.com/articles/2007/08/24/business/chibank.php
2008:
"What’s going on with the banks? A lot of recent attention has been focused on Chinese banks’ exposure to Lehman and other collapsing US credits. The nominal numbers being reported are relatively small compared to the bank’s capital base and earnings expectations, but there are persistent rumors that the reported exposure understates the extent of the problem. That would not be a surprise to many of us. A Peking University professor who I was talking to yesterday said emphatically: “Do not trust any number the banks submit.” http://seekingalpha.com/article/96935-worrying-about-china-s-banks
Flighty From United States, joined Apr 2007, 3161 posts, RR: 3 Reply 7, posted (1 month 1 week 5 days 18 hours ago) and read 10688 times:
Quoting Revelation (Reply 5): It seems Chinese people tend to pay cash for most everything, and their banks didn't buy into the mortgage based securites to the same degree as did most of the rest of the world's banks.
China's banks are a festival of bad loans, nonperforming assets and political cronyism.
Fortunately, however, they have a central govt with lots of risk-free cash dollars for support. And, they have a completely rigid, political banking market, so indeed, they are not vulnerable to this crisis in particular. We shouldn't assume they are an example of prudent banking, however. They have a command & control system. There is no free exchange / merger of banks / complex capital market there.
Stitch From United States, joined Jul 2005, 12623 posts, RR: 53 Reply 8, posted (1 month 1 week 5 days 16 hours ago) and read 10285 times:
Quoting Revelation (Reply 5): Perhaps, but Airbus seems to have been doing rather well in China of late, and I've read that China is not being as impacted by the credit crisis as the rest of the world.
On the flip side, Airbus has heavy exposure in the Middle East and even Dubai is starting to feel the credit crunch with a number of high-profile projects either being canceled or at risk of being canceled due to an inability to either get credit or get credit on terms that make the projects worthwhile per recent news reports I have read.
Lightsaber From United States, joined Jan 2005, 3861 posts, RR: 71 Reply 9, posted (1 month 1 week 5 days 16 hours ago) and read 10141 times:
Quoting Sxf24 (Thread starter): The production rates reductions - 5% in 2009 and 23% in 2010 - are substantial and if the credit crisis continues, would likely be matched by Airbus as their North American, Australian and European customers struggle to find financing.
About right. Recall that ILFC was owned by AIG. Suddenly their easy access to funds is over. ILFC can find customers... they're having trouble getting the Billions they need to fund their order book.
Dubai is also having trouble borrowing. So much for the next great aircraft leaser...
Quoting Revelation (Reply 3): So I guess it's a good time to have your workforce on strike!
I'm sure EK, CX, and Virgin Pacific have different opinions. Even with oil at below $80/bbl, fuel is a painful expense. I've yet to hear of any airline rescinding their 747 replacement policies... (mostly with 77W's)
Quoting Stitch (Reply 4): Frankly, it seems like a significant over-reaction to me. The world governments are still struggling on figuring out how to unfreeze the markets, but I expect results in weeks, not months or years.
Unfortunately, this type of crisis takes years to get through the system. People, in particular in the United States, have reached debt exhaustion. No more borrowing against the home for that annual trans-Pacific trip in J class. (I have multiple coworkers who were doing that. Now their incredulous that they owe more than their homes would sell for! Yet they bought their homes for pennies of their current value... Seriously.)
Stock markets won't recover their 2/3rds loss on China, or have the DJIA back at 14,200 anytime soon. With layoffs coming, homes will be down for ~3 years too. We were over-invested in sales and under-invested in manufacturing. It takes a recession to redistribute the work force
DocLightning From United States, joined Nov 2005, 3117 posts, RR: 13 Reply 10, posted (1 month 1 week 5 days 16 hours ago) and read 10075 times:
The other thing is that Boeing is currently only producing two aircraft: the 737 and the 777. Oh sure, there were 20 767's ordered in 2008, but that line is hardly cranking them out at full tilt. Everyone knows that the 767 line's days are numbered.
So basically, boeing has four models. 737, 747, 787, 777. Of these, Boeing is currently only producing two of them. And the longer the delay on the 787, which is where all the orders are, the worse that cliff will be.
EBJ1248650 From United States, joined Jun 2005, 1062 posts, RR: 1 Reply 12, posted (1 month 1 week 5 days 14 hours ago) and read 9403 times:
Quoting Khobar (Reply 1): Funny thing - yesterday I went into three different stores and was offered credit cards in each right when I walked in the door.
The credit crunch is going to go the way of high gas prices ... out the window and things will settle down shortly to a more normal state. The airlines will get their airplanes. I don't think we'll have to worry about Boeing or Airbus falling through the cracks.
Charles79 From United States, joined Mar 2007, 630 posts, RR: 2 Reply 14, posted (1 month 1 week 5 days 13 hours ago) and read 8961 times:
Alright, so it's been discussed in here many times about how both Airbus and Boeing had to pay compensations for late delivery of aircraft, so...do the airlines that defer delivery have to pay a penalty to the manufacturers then? I'm guessing it's not much of an issue if no parts/work for a specific frame have been produced/done. However, with the sometimes different specifications and requests from airlines it might be more difficult to place a finished frame with another carrier at the last minute. Once engines are fitted, fuselage is painted, and interior fitted you can't just simply hand over, say, an Air France 77W to BA or vice-versa.
Khobar From United States, joined Mar 2006, 1758 posts, RR: 2 Reply 16, posted (1 month 1 week 5 days 13 hours ago) and read 8745 times:
Quoting EBJ1248650 (Reply 12): The credit crunch is going to go the way of high gas prices ... out the window and things will settle down shortly to a more normal state. The airlines will get their airplanes. I don't think we'll have to worry about Boeing or Airbus falling through the cracks.
Yeah, I got some more offers of credit today. Sheesh, I was hoping the credit crunch to knock these knuckleheads off the phone for a while.
And...wait, another call...hold on..."no, I don't want to refinance my car for 30 years, I don't care what the interest rate is or that my overall monthly payment will be lower - I'll be paying for a lot more months, dumba$$."
Sorry. It's little wonder we're where we are at present - and this is just one issue.
Unless something bad happens with the 787 I don't think Boeing has too much to worry about.
Alangirvan From New Zealand, joined Nov 2000, 916 posts, RR: 0 Reply 17, posted (1 month 1 week 5 days 12 hours ago) and read 8524 times:
Quoting Khobar (Reply 16): Unless something bad happens with the 787 I don't think Boeing has too much to worry about.
All those 787s that have been ordered will be taken, will they not? There wouldn't be any over ambitious orders placed by some carriers who would not have a hope of using them?
Khobar From United States, joined Mar 2006, 1758 posts, RR: 2 Reply 18, posted (1 month 1 week 5 days 10 hours ago) and read 8071 times:
Quoting Alangirvan (Reply 17): All those 787s that have been ordered will be taken, will they not? There wouldn't be any over ambitious orders placed by some carriers who would not have a hope of using them?
I was actually referring to the MD-11 issue - at this moment we don't know for sure what the 787 will or will not be capable of. Some here are suggesting it will be significantly be off its promised guarantees (hence the MD-11 comparison).
Captain X and F9Animal have predicted doom and gloom and that Boeing will cease to exist (problems at this point per these two could not possibly be fixed so Boeing is toast). Yawn.
PVG From China, joined Dec 2004, 535 posts, RR: 1 Reply 19, posted (1 month 1 week 5 days 10 hours ago) and read 7923 times:
Say what you want. 25% of homes are purchased with cash in China. The rest who use mortgages, pay them off within 5 years on average. The government has very little debt and is sitting on $1.6 trillion in liquid assets. The economy grows at 10-11% in a good year and 7-9% in a bad year. Personal debt is pratically nil. At the end of the day, the banks are owned by the government (like many US banks will be in the next few weeks), so thay are liquid. People save 45% of the incomes, which grow at 10% per year. I'd rather be sitting on real estate in China than the US right now.
Quoting Khobar (Reply 6): 2006:
"If you are not keeping a close eye on the Chinese banking system, perhaps you should be. Bill McDonough, the ex-chief of New York Federal Reserve, let slip at a conference in Italy this week that China's rickety credit structure was the biggest single menace to the world economy." http://www.telegraph.co.uk/finance/c...illes-heel-of-the-global-boom.html
2007:
"BEIJING: After appearing immune to the turmoil unleashed on world markets from high-risk home lending in the United States, China suffered its first serious setback Friday from the meltdown in subprime loans." http://www.iht.com/articles/2007/08/24/business/chibank.php
2008:
"What’s going on with the banks? A lot of recent attention has been focused on Chinese banks’ exposure to Lehman and other collapsing US credits. The nominal numbers being reported are relatively small compared to the bank’s capital base and earnings expectations, but there are persistent rumors that the reported exposure understates the extent of the problem. That would not be a surprise to many of us. A Peking University professor who I was talking to yesterday said emphatically: “Do not trust any number the banks submit.” http://seekingalpha.com/article/9693...banks
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From United States, joined Aug 2007, 635 posts, 
I'm sure EK, CX, and Virgin Pacific have different opinions. 
Even with oil at below $80/bbl, fuel is a painful expense. I've yet to hear of any airline rescinding their 747 replacement policies... (mostly with 77W's)
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From New Zealand, joined Nov 2000, 916 posts, 
From China, joined Dec 2004, 535 posts,