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Enders: Disappointed With A380 Progress  
User currently offlineClickhappy From United States of America, joined Sep 2001, 9633 posts, RR: 68
Posted (4 years 8 months 1 week 1 day 1 hour ago) and read 16365 times:
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On the news of the Airbus 2009 O&D announcement comes some interesting words from CEO Tom Enders with regards to the A380 program:

The increase masks what Enders called a "big disappointment" with Airbus' newest plane, the A380 superjumbo, which has suffered from costly delays. Airbus only managed to deliver 10 A380s last year, well below its initial goal of 18, and Enders said the program will be "a financial liability" for years to come.

http://finance.yahoo.com/news/Airbus...A400M-apf-2886209632.html?x=0&.v=7

60 replies: All unread, showing first 25:
 
User currently offlineElite From Hong Kong, joined Jun 2006, 2798 posts, RR: 10
Reply 1, posted (4 years 8 months 1 week 1 day 1 hour ago) and read 16326 times:

A lot of publicity, a lot of hype, and a lot of orders... but production is costly... you can't be perfect. A "financial liability for years to come", yes, but I believe they will break even and make a profit soon. Planes don't go into production for just a few years, its a long-term thing. With regards to a "big disappointment", I'm not sure how it is, at least from an aviation enthusiasts point of view.

User currently offlineBurkhard From Germany, joined Nov 2006, 4397 posts, RR: 2
Reply 2, posted (4 years 8 months 1 week 1 day 1 hour ago) and read 16324 times:

From the same article:

Airbus has moved up some of its more financially secure customers to 2010 slots for planes originally scheduled for delivery in 2011, 2012 and even 2013, he said.

That explains the free 2011 delivery slots for A330s we wondered about...


User currently offlineBoeingfever777 From United States of America, joined Jul 2009, 409 posts, RR: 53
Reply 3, posted (4 years 8 months 1 week 1 day 1 hour ago) and read 16324 times:



Quoting Clickhappy (Thread starter):
Enders said the program will be "a financial liability" for years to come.

What was the break even sales point for Airbus?



Faire du ciel le plus bel endroit de la terre.
User currently offlineEPA001 From Netherlands, joined Sep 2006, 4737 posts, RR: 39
Reply 4, posted (4 years 8 months 1 week 1 day 1 hour ago) and read 16169 times:
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That thread title is totally taken out of context. Enders have said this about the problems with the A380:

Quote:
Airbus chief Tom Enders admits that the manufacturer has "not come to grips with this complex aircraft".

He says it will remain a "financial liability" for "years to come", but flagged up airline customers' appreciation of the jet.

Now the financial burden and extra work is disappointing for Airbus, no doubt about it. The thread title however makes the whole plane look bad. This is by far not the case.

Also Louis Gallois has spoken about this topic and stated:

Quote:
EADS chief Louis Gallois has listed cost control of the Airbus A380 program as a priority in 2010.

Speaking during a joint EADS and Airbus event in Seville today, he said: "Actual production costs are significantly above expectations."

He adds that the production ramp-up remains "difficult to manage".

.

So it will take probably 2-3 years to get all the issues out of the way. That is disappointing, but they are addressing the issues with a very high priority. This is the only realistic thing they can do imho. I hope they will succeed.


User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 5, posted (4 years 8 months 1 week 1 day ago) and read 15669 times:

So I have a few questions:

How much lunch aid was there in the 380 program and how does that get handled in terms of who gets paid first from the revenues?


How much overhead is Airbus allowed on each plane per the terms of launch aid?

Is Airbus currently eating the overhead on each 380 with Gross Profit going to repay the launch aid?

If there is a profit on each plane, how much of it goes to repay launch aid and how much to Airbus and what type of return is earned on the launch aid?

If there is a loss on each plane being built (before and after overhead) how is that allocated? Does the amount owed on the launch aid continue to grow and do the providers of the aid then get paid out of the earnings from other aircraft sales like the 320 and 330?

These are pretty vague questions only because I really don't know how the launch aid works and what the terms are so that may be a simpler question to answer.

Thanks in advance.


User currently offlineMoltenRock From , joined Dec 1969, posts, RR:
Reply 6, posted (4 years 8 months 1 week 1 day ago) and read 15644 times:



Quoting EPA001 (Reply 4):
That thread title is totally taken out of context. Enders have said this about the problems with the A380:

I thought so as well, as I clicked thru to the source to read it for myself. The reporter chopped and parsed Mr. Enders words very poorly, misunderstood what he heard, or was deliberate in his actions, not sure which.


User currently offlineCasInterest From United States of America, joined Feb 2005, 4618 posts, RR: 2
Reply 7, posted (4 years 8 months 1 week 1 day ago) and read 15488 times:

The A380 is a heck of a plane. Well designed for what it was intended to do. Fly large numbers of passengers between large city pairs and hubs.

When it was concieved, it was a good plan and niche market.

However Boeing decided to put it's efforts into a smaller widebody that could do more point to point flying. The 787 Airbus responded with the A350.

When this occurrred, certain markets and flying pairs that would have fit the A380 hub and spoke model were freed up to a point to point market. This did 2 things.

1 The A380 Total market was canniblized
2. It gave carriers negotiating room on planes since there was now a stopgap solution


As the 787 and A350 come online, they will get more orders, and the A380 market may remain a bit depressed. Especially if global economic conditions continue to drag along.


The A380, the last I heard has a break even somewhere around 350-500 planes.

I think in 15+ Years, it will break even. However 15+ years is a long time to hope that there is no competition or competing product to push that time out even longer.



Older than I just was ,and younger than I will soo be.
User currently offlineScbriml From United Kingdom, joined Jul 2003, 12566 posts, RR: 46
Reply 8, posted (4 years 8 months 1 week 1 day ago) and read 15268 times:
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Quoting Clickhappy (Thread starter):
some interesting words from CEO Tom Enders

He also said lots of good things about the A380, but they seem to have been missed.

Quoting Elite (Reply 1):
A lot of publicity, a lot of hype, and a lot of orders... but production is costly... you can't be perfect.

Those words could equally apply to another manufacturer!  scratchchin 

Quoting PlaneAdmirer (Reply 5):
How much lunch aid was there in the 380 program

Well, you know the French and their legendary long midday breaks. I expect a lot of wining and dining was involved!  wink 



Time flies like an arrow, but fruit flies like a banana!
User currently offlineStitch From United States of America, joined Jul 2005, 30977 posts, RR: 86
Reply 9, posted (4 years 8 months 1 week 23 hours ago) and read 15175 times:
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At this point, "breaking even" is nothing more than something that would be nice to have. They survived launching it, developing it and putting it into production. So all that is now behind them.

The slow delivery rate is not going to materially affect Airbus' financial performance going forward because the monies they need to spend to complete the frames and maintain the infrastructure is not all that great. Even if they lose money on every frame because of it, the A380 is not the only product they sell. The A320 and A330 programs bring in plenty of revenues.

The focus now for Airbus should be the A350XWB.


User currently offlineZeke From Hong Kong, joined Dec 2006, 9097 posts, RR: 75
Reply 10, posted (4 years 8 months 1 week 23 hours ago) and read 15045 times:



Quoting Scbriml (Reply 8):
He also said lots of good things about the A380, but they seem to have been missed.

That does not surprise me, the A380 has flows hundreds of thousands of people, it is just another day when it does so, not news worthy. Get delayed by 60 minutes or more, and it become headlines on a.net.

Quoting Stitch (Reply 9):
The slow delivery rate is not going to materially affect Airbus' financial performance going forward because the monies they need to spend to complete the frames and maintain the infrastructure is not all that great. Even if they lose money on every frame because of it, the A380 is not the only product they sell. The A320 and A330 programs bring in plenty of revenues.

Considering all the development costs have already been accounted for, for every delivery, the money goes in the black column (not being racist for the US readers, black is the POSITIVE column, and red is NEGATIVE in accounting).



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 11, posted (4 years 8 months 1 week 23 hours ago) and read 14952 times:



Quoting Scbriml (Reply 8):
Well, you know the French and their legendary long midday breaks. I expect a lot of wining and dining was involved!

I really need to do a better job of proof reading....  banghead 


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2826 posts, RR: 42
Reply 12, posted (4 years 8 months 1 week 23 hours ago) and read 14782 times:



Quoting Elite (Reply 1):
A lot of publicity, a lot of hype, and a lot of orders... but production is costly... you can't be perfect. A "financial liability for years to come", yes, but I believe they will break even and make a profit soon. Planes don't go into production for just a few years, its a long-term thing. With regards to a "big disappointment", I'm not sure how it is, at least from an aviation enthusiasts point of view.

From a financial point of view, the A380 has been a disaster financially. Many argue that you should not include (and most on this thread don't) the cost of developing the plane, but that on top of the production problems means that Airbus is still bleeding red ink, not recouping any of their investment.

It's extraordinarily unlikely that the A380 will ever meet any of it's original forecast in terms of profitability for EADS.

Quoting PlaneAdmirer (Reply 5):

How much lunch aid was there in the 380 program and how does that get handled in terms of who gets paid first from the revenues?

The launch aid gets paid back as a per-plane license fee. However, I have also been told that there are covenants inside of Airbus's capital that they raised for the plane that could come back and haunt them.


User currently offlineBMI727 From United States of America, joined Feb 2009, 15739 posts, RR: 27
Reply 13, posted (4 years 8 months 1 week 23 hours ago) and read 14594 times:



Quoting Boeingfever777 (Reply 3):
What was the break even sales point for Airbus?

Airbus knows and they aren't telling. But it is irrelevant anyway, since the money is already spent.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10023 posts, RR: 96
Reply 14, posted (4 years 8 months 1 week 23 hours ago) and read 14536 times:
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Quoting PlaneAdmirer (Reply 5):
How much lunch aid was there in the 380 program and how does that get handled in terms of who gets paid first from the revenues?

About $3.4Bn, and the revenues have nothing to do with its repayment. It gets repaid whatever.

Quoting PlaneAdmirer (Reply 5):
How much overhead is Airbus allowed on each plane per the terms of launch aid?

Is Airbus currently eating the overhead on each 380 with Gross Profit going to repay the launch aid?

If there is a profit on each plane, how much of it goes to repay launch aid and how much to Airbus and what type of return is earned on the launch aid?

I don't think these questions are pertinent, except in terms of the "royalty" that is paid on each sale.

Airbus (well EADS actually) repay RLI from their gross revenue across the business.
The amount owed by EADS to government was lower when the A380 went into service than it was when it was launched, as RLI on other programmes was repaid in the intervening time.

So you're correct to say Airbus is "eating" the costs and launch aid repayment on the A380. But I suspect you'll only see it in P+L figures that are depressed from where they would otherwise have been.

In reality, the A320 and A330 are repaying the A380's RLI.

Maybe in 2 decades time, the A380 will be paying off the RLI of some other programme  duck 

Quoting CasInterest (Reply 7):
However Boeing decided to put it's efforts into a smaller widebody that could do more point to point flying. The 787 Airbus responded with the A350.

The A330 and 777 were already there....

Quoting AirFrnt (Reply 12):
It's extraordinarily unlikely that the A380 will ever meet any of it's original forecast in terms of profitability for EADS.

I guess that's pretty much a given in the circumstances  Wink

Rgds


User currently offlineStitch From United States of America, joined Jul 2005, 30977 posts, RR: 86
Reply 15, posted (4 years 8 months 1 week 23 hours ago) and read 14538 times:
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Quoting PlaneAdmirer (Reply 5):
How much (launch) aid was there in the 380 program and how does that get handled in terms of who gets paid first from the revenues?

They're allowed up to one-third. At launch, development was expected to be €8.8 billion, so that means the A380 should have received just under €3 billion in launch aid.

Repayment is calculated on a per-frame royalty basis. They take the total number of expected frames and then divide the launch aid total by that number. I don't know what the actual number is, but based on Airbus' delivery projections, I think 300 might not be a wild-arsed guess. So under this projection, Airbus would be paying a €10 million royalty on each A380 delivered (€250 million to date counting today's QF delivery).

Airbus is required to repay the total amount within 17 years, whether or not deliveries to that date have generated sufficient royalties. So under this projection (and assuming Airbus received the launch aid in 2001), Airbus has eight years to deliver 275 A380-800s, otherwise they have to cut a check for the balance owed on that initial ~€3 billion.


User currently offlineSEPilot From United States of America, joined Dec 2006, 6907 posts, RR: 46
Reply 16, posted (4 years 8 months 1 week 22 hours ago) and read 14198 times:



Quoting Elite (Reply 1):
A lot of publicity, a lot of hype, and a lot of orders... but production is costly... you can't be perfect. A "financial liability for years to come", yes, but I believe they will break even and make a profit soon. Planes don't go into production for just a few years, its a long-term thing. With regards to a "big disappointment", I'm not sure how it is, at least from an aviation enthusiasts point of view.

From what I have seen I doubt they will ever break even; development costs far exceeded estimates and sales have been way below what was projected. Aircraft manufacturers are totally uninterested in aviation enthusiasts; if they don't make money sooner or later they go out of business. The A380 is not helping Airbus make money; perhaps it will in the future, but that is by no means assured. That is why it is a "big disappointment" right now.



The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
User currently offlineJustloveplanes From United States of America, joined Jul 2004, 1055 posts, RR: 1
Reply 17, posted (4 years 8 months 1 week 18 hours ago) and read 12578 times:

This article should be titled A400M threatens Airbus (what Enders said). A380 is a financial pain in the neck, but does not threaten the company like the A400M. Ender's statement is probably overdramatized for political reasons, but there you have it...

User currently offlineCasInterest From United States of America, joined Feb 2005, 4618 posts, RR: 2
Reply 18, posted (4 years 8 months 1 week 17 hours ago) and read 11758 times:



Quoting Astuteman (Reply 14):
The A330 and 777 were already there....

Not with the promised efficiencies of the ,787.and A350, which the A380 was promising on the larger scale to unsurp the 747



Older than I just was ,and younger than I will soo be.
User currently offlineCommavia From United States of America, joined Apr 2005, 11604 posts, RR: 61
Reply 19, posted (4 years 8 months 1 week 16 hours ago) and read 11152 times:

Quoting Clickhappy (Thread starter):
The increase masks what Enders called a "big disappointment" with Airbus' newest plane, the A380 superjumbo, which has suffered from costly delays. Airbus only managed to deliver 10 A380s last year, well below its initial goal of 18, and Enders said the program will be "a financial liability" for years to come.

Of course the A380 is a "big disappointment" and a "financial liability" for years to come. I personally highly doubt the plane will ever make money - ever. Given all of the setbacks, enormous capital investments required, design changes, engineering investments, etc., the hurdle rate for the A380 production line is probably 350 frames, which I doubt they'll ever reach. As it is now, some A380 customers are trying to defer deliveries, and I personally think that some of the outstanding A380 orders are just completely unrealistic. I don't think Emirates will ever find a profitable way to operate 58 A380s, for example.



Quoting Justloveplanes (Reply 17):
This article should be titled A400M threatens Airbus (what Enders said). A380 is a financial pain in the neck, but does not threaten the company like the A400M.

Agreed.

The A380 was merely a problem of social and political goals crowding out economic reality.

The A400M was a story of astounding hubris and political manipulation. Airbus was absolutely asinine from day 1 to ever agree to a fixed-price development contract, and for ever thinking that they could really develop a military aircraft platform using commercial processes and timelines. On the flip side, the European governments so manipulated the entire process and so screwed up the entire program by trying to manage for jobs and socialism - like repeatedly holding up progress while they tried to find an acceptable (read: European) engine.

The A400M now really does have the potential to pull down or severely damage the entire Airbus enterprise. With Airbus claiming a monthly cash burn of as much as over $200M, it is true that the very existence of Airbus is at stake. That is an astounding amount of money to be expending on a single program considering that they are still quite a ways away from ever actually handing one over to a customer. The Europeans are going to have to cough up a lot more money, or Airbus may just cancel the program. (I personally doubt it though since, like with many things in Europe these days, the A400M is now more of a jobs program than anything else and thus I suspect it won't ultimately get cancelled.)

[Edited 2010-01-12 16:16:29 by srbmod]

User currently offlineTomcat From Belgium, joined Sep 2000, 162 posts, RR: 0
Reply 20, posted (4 years 8 months 1 week 16 hours ago) and read 10760 times:



Quoting Stitch (Reply 9):
The focus now for Airbus should be the A350XWB.

It is interesting to note that at the same time that Airbus is recognizing that the A380 will be a burden for the years to come, they quietly announce that the A350 is starting to be a challenging program.

Add to this the fact that Airbus would welcome the opportunity to move "scarce" engineering resources from the A400M to the A350 in case the A400M program would be dropped, and you really have a bad weather forecast. The bad news are in the pipe. Hopefully, the to be announced A350 delay can still be contained. A first step in that direction is the announcement that the A358 is now being treated as a A359 shrink, the price to pay for this philosophical change being an increased fuel burn.

So yes, Airbus should really be focused on the A350. Better not screw up this time...


User currently offlineER757 From Cayman Islands, joined May 2005, 2523 posts, RR: 7
Reply 21, posted (4 years 8 months 1 week 15 hours ago) and read 10198 times:



Quoting Boeingfever777 (Reply 3):
What was the break even sales point for Airbus?

It's a moving target - any lag in production rate pushes break even to the right since you have employee salaries, facilities costs (utilities, maintenance, taxes etc) and other costs which must be paid regardless of production rate. So if you produce less of what you are selling than you planned to over a given period of time, your income, and therefore your profit is less over that given timeframe than you had budgeted for. This says nothing of the possibility of higher materials costs as time goes on, again something possibly not budgeted for in certain alloted timeframes.


User currently offlineSSTsomeday From Canada, joined Oct 2006, 1276 posts, RR: 1
Reply 22, posted (4 years 8 months 1 week 9 hours ago) and read 7675 times:



Quoting Boeingfever777 (Reply 3):
What was the break even sales point for Airbus?



Quoting CasInterest (Reply 7):
The A380, the last I heard has a break even somewhere around 350-500 planes.

The variables contributing to a 'Break-even point" are more than the number of A/C sold.

The rate a which those A/C are produced must be considered. If it takes 10 years for Airbus to produce 200 380 A/C (for example), then there would be much less profit than if they were produced in a 5 year span. Because:

1) The cost of running the line is not exactly proportional to the number of A/C coming off the line. A fewer number of A/C coming off the line in a certain time frame translates to a higher cost per plane. Certain costs related to having the line open don't change much. Facilities, manpower, real estate, personnel who cannot be assigned to other projects, insurance costs. The list goes on.

2) The longer you take to pay back investors and pay them interest on their investment, the more it cuts into your profits.

3) If you, as a manufacturer agree to a price upon delivery, but then your plane is 2 years late being delivered, are you missing out on two years worth of inflationary price increases? Isn't your late plane now more expensive, but the price is cemented in the contract?

4) Airbus has not fully adjusted it's production from the early "by hand" modality of the first frames to the more efficient, originally intended, more streamlined/automated modality of production. This "labor intensive" modality of assembly is expensive.

5) While the 380 is taking its sweet time getting into the air in any numbers, Boeing is coming from behind with an aircraft that is serving to fracture the market somewhat by strengthening the decentralization model in aviation, and this could cut into 380 sales. The 380 would do well do get as many frames in the air as possible while the technology is cutting edge, the business case for airlines is solid and the hype is palatable. The cheaper 747-8 may start to look real good, if it is easier to come by. The 350, which is hard upon us, may also cannibalize 380 sales for the same reason. God forbid LHR should build another runway within 5 years... (OK - never gonna happen but...) C'mon, Airbus, get your act together.

6) A more robust line would allow Airbus to offer some reduced prices and perhaps sell a few more of the great birds, since there is value in volume selling.

What I understand from other threads is that this A/C is a passenger pleaser, running within acceptable performance and customer service parameters. I look forward to flying her. However slow production rates do not bode well for the business case.

These variables I site (albeit as a layperson) at least make it very complicated for outsiders to speculate on break-even points, or make it difficult for us to believe a manufacturer when they make a claim in that regard.

Perhaps the recession is a blessing in disguise, since Airbus has been unable to ramp up production anyway, they are not ending up paying as much restitution for late deliveries (Is this the case? It was not before the recession, but now...) Airbus would do much better fixing this problem NOW than in a few years from now.



I come in peace
User currently offlinePellegrine From United States of America, joined Mar 2007, 2443 posts, RR: 8
Reply 23, posted (4 years 8 months 1 week 8 hours ago) and read 7354 times:

Maybe posters should stay on topic and not rehash their same old opinions in every thread even mentioning the A380 (and the 787 comes up in these threads constantly, even though it is a totally different market segment, and had/has totally different problems).

I don't have any doubt Airbus is disappointed about what happened to the A380 program. Luckily, what happened in 2009 specifically, was more due to the world financial crisis. Had this not happened in 08-09, I have no doubt Airbus would have delivered closer to 20 frames than 10. 2010 will be better barring further problems, 2011 even better, 2012 probably better than that.



oh boy!!!
User currently offlineB707forever From United States of America, joined Dec 2007, 459 posts, RR: 0
Reply 24, posted (4 years 8 months 1 week 6 hours ago) and read 6416 times:



Quoting Tomcat (Reply 20):
It is interesting to note that at the same time that Airbus is recognizing that the A380 will be a burden for the years to come, they quietly announce that the A350 is starting to be a challenging program.

Add to this the fact that Airbus would welcome the opportunity to move "scarce" engineering resources from the A400M to the A350 in case the A400M program would be dropped, and you really have a bad weather forecast. The bad news are in the pipe. Hopefully, the to be announced A350 delay can still be contained. A first step in that direction is the announcement that the A358 is now being treated as a A359 shrink, the price to pay for this philosophical change being an increased fuel burn.

So yes, Airbus should really be focused on the A350. Better not screw up this time...

Considering the delays the 787 program has incurred it wouldn't be very surprising to see the A350 program carry similar delays. I guess that's the price one pays for trying to be innovative and really move things forward.

And let's face it, whether it's the European government saving EAD or the American government subsidizing Boeing, both are, as they say, "too big to fail for all interested parties."

I'd love to see them both succeed in over the top ways. I'm fearful the A380 program will suffer from a combination of bad timing, both economically and from the market's need perspective. Having said that, the success of the A320/A330 programs is truly great for Airbus with Boeings 737/767/777 programs not being shabby either.

Neither one is going anywhere so everyone, thank heaven, will continue to be able to jibe at one another in good fun.

I've not yet met someone who'se flown the A380 but from what I read, passengers seem to truly appreciate the quiet, the cabin and the experience. I look forward to it.

I couldn't help but also wonder if the A380 will be similar, in some ways, to Concorde. A brilliant technical achievement that ultimately is under utilized. That would be sad.


25 OA260 : What a surprise. Always focus on the bad. I believe that the A380 is the best thing to happen to civil aviation in recent times and is a wonderful ai
26 BrouAviation : Aren't you sort of contradicting yourself here? Because of what you state in the latter quote, the first is incorrect. I think it doesn't. At least,
27 Elite : Not contradicting - misguided. Until I read some recent posts on this thread, I wasn't 100% sure about the financial situation with the A380 and Airb
28 Distanthorizon : It is interesting to see how much time and effort some people here spend to discuss the "breakeven problem topic" of the A380. Is it possible that it
29 N14AZ : It has been changed - when EPA 001 made his comment (and I absolutly agree with him) the thread title was something like "Enders: A380 - big dissapoi
30 EPA001 : Thanks for explaining this N14AZ. That was exactly the situation when I made my comment. After that the title of the topic changed to a more realisti
31 Art : I would say it's impossible given the CATIA delay + overun on development costs + late delivery penalties + reduced revenue from severely depressed p
32 BrouAviation : Ah, that explains it. I didn't say anything!
33 Eugdog : Break even for a long term project is very difficult to determine. The number of planes to break even rises if the sales rate slows down. This is beca
34 Travelhound : I think Tom Enders is making a relatively strong statement to the market about the health of the A380 program. I interpret "financial liability" to m
35 Baroque : Have to differ a bit there Scbriml. Surely in view of the timing of RLI, it has to be considered as breakfast. Definitely there is now a lot of "wini
36 Justloveplanes : I believe the A350 was always designed around the A359, see below. What is different from before? Was the 358 going to have it's own wing?
37 Gipsy : Which where the social and political goals of the A380? To overtake the mighty USA with a bigger a/c as many like to see it? And creating socialist j
38 Stitch : I can certainly believe that at the moment, and even the near future (next few years). It might end up being that way for the entire life of the prog
39 Burkhard : Since Airbus sells in US$ and has costs in Euro, this is a meaningless quantity - you only can predict it for a given exchgange rate. Let the Dollar
40 CasInterest : Which is why my moving target is so large. The original number was supposed to be around 200 planes. But the way to get to the break even point, only
41 Justloveplanes : This I think was the ultimate justification for the plane. I think the forcast which reached 900 units at one point was attractive, but A did openly
42 Manfredj : This thread is a disappointment thus far in that with all the knowledge in these forums, no one has made recommendations. Rather, it has become a hist
43 Stitch : Looking in from the outside, I would say the two biggest problems are the lack of orders and the slow delivery rate. I know we've hashed over how the
44 Gipsy : I guess the top problem is the dollar with it's instability and low value, marginalising the profits or just the amount of amortization. Then the unc
45 Revelation : Sure, because nothing good he says is a surprise, is it? How do you know this? As per #4: So if actual production costs are significantly above expec
46 Stitch : Well the slow delivery rate no doubt exacerbates the production costs, since the infrastructure is designed to build four times as many frames per ye
47 Revelation : Sure, it exacerbates it, but another way to exacerbate it is for cost of materials or cost of labor or cost of transport or cost of facilities etc to
48 Incitatus : This kind of interest, positive and negative, comes with the territory. If Airbus had built yet just another regular wide-body just more.. blablabla.
49 Stitch : Indeed. The sales contracts tie progress and final delivery payments to various pricing indices to account for inflation and such between the time th
50 Pellegrine : You know the customer requested deferments which will persist for years? Rate of production has everything to do with this. If they can crank out 25
51 Revelation : Good point, but I thought most of their blue chip customers (SQ, LH, AF, QF) urgently wanted the A380s so they could retire older airplanes such as 7
52 SolarFlyer22 : I think this is the real problem for the program. Everyone was worried about the infrastructure of airports being inadequate but its actually the pro
53 Revelation : I agree with this, but Airbus has made other large programs work, so what's so different about A380? I realize the pieces are bigger and the transpor
54 Astuteman : It seems pretty clear (to me) that the bottleneck is in outfitting, in which case I can't help thinking that the root cause lies somewhere in the sol
55 Post contains links Revelation : I just caught up on the A380 production thread: A380 Production Thread #5: (by Aircellist Nov 17 2009 in Civil Aviation) and they linked to this inter
56 Travelhound : I thought one of the problems recently mentioned with outfitting at XFW is that of re-work of works completed at TLS / Suppliers. By the sounds there
57 Flighty : I agree with Eugdog. The A380 will not justify its large development cost. Sure, it will sell some more units. But it is unlikely they will be so prof
58 Stitch : Okay, but that capital is gone, so the question now (and has been for many years) is not whether they should have let the looters in the door, but ho
59 Revelation : Indeed the R+D is written down already but what is interesting here again is Gallois's statement, "Actual production costs are significantly above ex
60 Stitch : It might very well have been reported, but were the wiring issues with the first 24 frames universal? As in every section was mismatched in the same l
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