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$150 M To Repair QF's A380 - Does It Make Sense?  
User currently offlineA380900 From France, joined Dec 2003, 1105 posts, RR: 1
Posted (3 years 4 months 2 weeks 2 days 7 hours ago) and read 23705 times:

This article says repairing the QF A380 could cost $150m.

http://www.smh.com.au/business/repai...-to-begin-soon-20110316-1bxab.html

(This comes from user "Thomascook" in the A380 production thread - I think it warrants an entire thread)

Obviously, I have no clue about whether it makes sense and I trust the people making the decision but aren't we close to the point where it is a tough call? I mean a lot of parts or this airplane could be sold/used for a lot. It would not be a complete write-off (ife, engines, avionics, parts...).

Also I thought they would need to change the wing. Obviously they cannot do that in Singapore.

Your thoughts?

64 replies: All unread, showing first 25:
 
User currently offlineflyingclrs727 From United States of America, joined Apr 2007, 733 posts, RR: 0
Reply 1, posted (3 years 4 months 2 weeks 2 days 7 hours ago) and read 23674 times:

How many years would QF have to wait for a new replacement A380 ordered today?

User currently offlinezeke From Hong Kong, joined Dec 2006, 8872 posts, RR: 75
Reply 2, posted (3 years 4 months 2 weeks 2 days 7 hours ago) and read 23527 times:

Quoting A380900 (Thread starter):

I would suggest the actual repair cost is much lower than that, the figures quoted would no doubt cover the cost of having the aircraft out of service for so long, as well as the disruption it caused to its schedule. I have heard numbers in the vicinity of 30 million for the actual structural assessment, repair design, approval, and to carry the work out on the airframe, that does not include the engines.

The most expensive items to replace would be the two port engines, they would each be around 20 million.

I think the 150 million would be the total estimated insurance liability.



We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
User currently offlineA380900 From France, joined Dec 2003, 1105 posts, RR: 1
Reply 3, posted (3 years 4 months 2 weeks 2 days 7 hours ago) and read 23522 times:

Quoting flyingclrs727 (Reply 1):
How many years would QF have to wait for a new replacement A380 ordered today?

Right. It is true that it's not like there are similar planes waiting to be bought on the second-hand market.

But then they say that repairs can make the plane heavier and make it lagging in perf. It's not a risk free proposition. Plus they can take the ILFC slots or something.


User currently offlineart From United Kingdom, joined Feb 2005, 3381 posts, RR: 0
Reply 4, posted (3 years 4 months 2 weeks 2 days 6 hours ago) and read 23313 times:

Quoting A380900 (Reply 3):
But then they say that repairs can make the plane heavier and make it lagging in perf. It's not a risk free proposition. Plus they can take the ILFC slots or something.

Any future performance shortfall would be covered in the settlement with RR, I imagine.


User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 5, posted (3 years 4 months 2 weeks 2 days 6 hours ago) and read 23120 times:

Quoting A380900 (Thread starter):
Obviously, I have no clue about whether it makes sense and I trust the people making the decision but aren't we close to the point where it is a tough call?

Very few, if any to be honest, here would know where that 'point' is....however, if it is being repaired then it most certainly makes sense, and is the cheapest option, to the insurance company


User currently offlinepar13del From Bahamas, joined Dec 2005, 7067 posts, RR: 8
Reply 6, posted (3 years 4 months 2 weeks 2 days 6 hours ago) and read 23037 times:

Quoting art (Reply 5):
Any future performance shortfall would be covered in the settlement with RR, I imagine.

Why, RR is responsible for the engines not meeting specifications agreed to on purchase, if the repairs to make the a/c servicable again are going to increase the OEM weight I don't see RR being held responsible, heck they could even argue that the OEM should be able to restore the a/c to factory specs, which even though a more expensive repair would get them off the hook for the rest of the a/c service life.

Yes if the accident did not happen the a/c would not need repairing, but is RR also being asked to pay for all the losses being incurred while this a/c is out of service or are both parties working out a one time payment settlement or a life time reduction in their Power by the Hour agreement? Another question, if this a/c were to be sold to another airline, does RR compensation for failure to meet specifications get transferred?


User currently offlineMPDPilot From United States of America, joined Jul 2006, 991 posts, RR: 0
Reply 7, posted (3 years 4 months 2 weeks 2 days 5 hours ago) and read 22703 times:

Quoting par13del (Reply 7):

Its all about liability. If RR was deamed at fault they have to pay for everything that was a result of their fault including any side effects of repairs. Structual repairs in aviation often add significant weight to the aircraft which would degrade efficiency, which QF agrued is RR's fault as had the engine not had a faulty design the repair wouldn't be needed. Airbus it seems has no libility in the matter as their aircraft didn't have a defect anywhere. Remember too that when QF buys an airplane from Airbus they do not buy it with engines included, they must purchase those seperately. So the engines are what failed, nothing else.

it would be like if an after market radio caused a fire in your car. Would you demand that the car manufacturer fix your upolstry? No because they didn't do anything wrong, you would have the radio people pay for it, and you would likely ask for a little extra for the loss of value of selling a car that had a fire.



One mile of highway gets you one mile, one mile of runway gets you anywhere.
User currently offlineIMissPiedmont From United States of America, joined May 2001, 6279 posts, RR: 34
Reply 8, posted (3 years 4 months 2 weeks 2 days 5 hours ago) and read 22516 times:

Quoting flyingclrs727 (Reply 1):
How many years would QF have to wait for a new replacement A380 ordered today?

Probably not many. There isn't exactly a large backlog though Airbus is not likely to increase the output rate for just a few airframes.



Quit calling an airport ramp "Tarmac" and a taxiway "runway".
User currently offlinekanban From United States of America, joined Jan 2008, 3392 posts, RR: 26
Reply 9, posted (3 years 4 months 2 weeks 2 days 5 hours ago) and read 22405 times:
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Quoting IMissPiedmont (Reply 9):
Probably not many.

there are some cancellation slots in 2014 otherwise they're looking at around 2018.. however there are rumors tha QF may defer or cancel some of their remaining order...


User currently offlinePH-TVH From Netherlands, joined May 2001, 115 posts, RR: 0
Reply 10, posted (3 years 4 months 2 weeks 2 days 5 hours ago) and read 22251 times:

Also consider QF's reputation.

In their whole history they never had any hull loss, so they probably want to keep it that way.
So yes, even if its an economical write-off, they still want to repair it, just to keep the number
of hull losses at 0. Scraping the airframe for parts will count as a "hull-loss" (don't pin me to
that one, but seems logical)

They did the same to the 747-400 that overrun the runway at Bangkok, back in 1999.
Cost a fortune to repair, but you can't put a price on "0 hull-losses" obviously.

my 2 cents...


User currently offlinepar13del From Bahamas, joined Dec 2005, 7067 posts, RR: 8
Reply 11, posted (3 years 4 months 2 weeks 2 days 5 hours ago) and read 22117 times:

Quoting MPDPilot (Reply 8):
If RR was deamed at fault they have to pay for everything that was a result of their fault including any side effects of repairs.

In which case it may be beneficial for RR to get together with the insurer and write off the a/c salvaging whatever parts possible to recoup losses.
As this a/c is not that old, it will be in service for many years to come, if performance compensation is due based on the a/c and not the operator, RR will be on the hook until the a/c goes out of service. Unless they put some upgraded engines on the a/c to compensate, they may well spend more money in compensation.

Quoting MPDPilot (Reply 8):
it would be like if an after market radio caused a fire in your car. Would you demand that the car manufacturer fix your upolstry? No because they didn't do anything wrong, you would have the radio people pay for it, and you would likely ask for a little extra for the loss of value of selling a car that had a fire.

Naw, for car's we will go to the insurer have it written off and get a cheque for a new purchase, the radio people can sell the old one for compensation, now if only airlines workded like that  


User currently offlinespchamp1 From United States of America, joined Apr 2010, 87 posts, RR: 0
Reply 12, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 21316 times:

Quoting PH-TVH (Reply 11):
Scraping the airframe for parts will count as a "hull-loss" (don't pin me to
that one, but seems logical)

I understand what you are saying, but anytime a carrier retires an airframe then subsequently parts it out, would that be considered hull loss? Whether its due to damage or age they've still lost a hull in service.

Granted the A380's are new birds, but you have to figure the life expectancy is probably in the neighborhood of about 20-30 years. If the cost is in fact $150 mil to fix you would reasonably divide that over the length of life for the aircraft. I am pretty sure that QF will surely make beyond $5-$7.5 mil a year in revenue by keeping the bird in the air for the next 20-30 years.

To me even though initial repair costs are just shy of 1/2 the cost of the a new one, you keep the bird in the air because it will make you money. Besides QF will not out of pocket anything more than what their deductible would be, if that. (I am assuming the principle of deductibles is no different with a/c than with vehicles)


User currently offlineMD-90 From United States of America, joined Jan 2000, 8502 posts, RR: 12
Reply 13, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 21318 times:

Quoting PH-TVH (Reply 11):
They did the same to the 747-400 that overrun the runway at Bangkok, back in 1999.
Cost a fortune to repair, but you can't put a price on "0 hull-losses" obviously.

I don't know, how much is "We've never lost an aircraft" worth on an economic basis to the airline? Sure it's a nice thing to say and all, but there are many fine airlines around the world that have had hull losses and are doing just fine.


User currently offlinePH-TVH From Netherlands, joined May 2001, 115 posts, RR: 0
Reply 14, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 21281 times:

Quoting spchamp1 (Reply 13):
I understand what you are saying, but anytime a carrier retires an airframe then subsequently parts it out, would that be considered hull loss? Whether its due to damage or age they've still lost a hull in service.

Don't know when something counts as a "hull-loss", only know that they repaired the crashed 747-400 in 1999,
just to prevent a hull-loss...

Anyone?


User currently offlineSpacepope From Vatican City, joined Dec 1999, 2901 posts, RR: 1
Reply 15, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 21117 times:

Quoting PH-TVH (Reply 15):
Don't know when something counts as a "hull-loss", only know that they repaired the crashed 747-400 in 1999,
just to prevent a hull-loss...

Jet hull loss, Qantas had its share of crashes in its prop fleet back in the day.



The last of the famous international playboys
User currently offlinespchamp1 From United States of America, joined Apr 2010, 87 posts, RR: 0
Reply 16, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 21120 times:

The following is from Wikipedia: (I know that Wikipedia is not always facts.)

An accident in which the damage to the aircraft is such that it must be written off, or in which the plane is destroyed is called a hull loss accident

And the following is from Skybrary:

Hull Loss is the term most often used to describe the status of an aircraft which has been destroyed or has otherwise been determined to have been damaged beyond economic repair. Such a determination is based upon the applicable prevailing insurance contract, most of which are written in similar terms for similar classes of aircraft and type of operation. The term is frequently used in aviation statistics to measure economic loss as opposed to loss of life. On rare occasions an owner or operator of a hull loss aircraft may decide to have it repaired to flying condition. This has been done in the past to maintain the record or reputation of an operator. The term 'Total Loss' may sometimes be substituted for the more usual term Hull Loss.


User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3535 posts, RR: 3
Reply 17, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 20996 times:

Are these costs all being reported in Australian or US dollars ?, or is it a case of the purchase price being quoted in US dollars and the repair cost in Aus dollars ?

User currently offlinePH-TVH From Netherlands, joined May 2001, 115 posts, RR: 0
Reply 18, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 20715 times:

Quoting Spacepope (Reply 16):

Jet hull loss, Qantas had its share of crashes in its prop fleet back in the day.

I stand corrected  
Quoting spchamp1 (Reply 17):
Hull Loss is the term most often used to describe the status of an aircraft which has been destroyed or has otherwise been determined to have been damaged beyond economic repair. Such a determination is based upon the applicable prevailing insurance contract, most of which are written in similar terms for similar classes of aircraft and type of operation. The term is frequently used in aviation statistics to measure economic loss as opposed to loss of life. On rare occasions an owner or operator of a hull loss aircraft may decide to have it repaired to flying condition. This has been done in the past to maintain the record or reputation of an operator. The term 'Total Loss' may sometimes be substituted for the more usual term Hull Loss.

Thanks for the info!

So scrapping a plane when it becomes obsolete is not a hull-loss  
And I still think QF is one of the "rare occacions" mentioned here!


User currently offlineEPA001 From Netherlands, joined Sep 2006, 4705 posts, RR: 38
Reply 19, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 20394 times:
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Quoting zeke (Reply 2):
I think the 150 million would be the total estimated insurance liability.


That, including your repairs estimation, I can believe a lot more then the plain number of $150 million.

By the way, the article is from an Australian newspaper, so $150 million would convert to about € 107.5 million. Still a lot money, but a little bit less then US Dollar which is still a bit higher on the market. But the difference is nowadays almost negligible.  .


User currently offlineDocLightning From United States of America, joined Nov 2005, 19415 posts, RR: 58
Reply 20, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 20238 times:

Quoting A380900 (Reply 3):

Right. It is true that it's not like there are similar planes waiting to be bought on the second-hand market.

They could order 748i's and have them pretty quickly.  

But even if it's $150M, it's still less than a new A380, no?


User currently offlinerbgso From United States of America, joined Jun 2006, 587 posts, RR: 0
Reply 21, posted (3 years 4 months 2 weeks 2 days 4 hours ago) and read 20000 times:

Repair work has not been started yet, and they hope to have it back in Australia by the end of the year? In a prior thread there was some folks "in the know" that claimed repair work was well underway and the plane would be making test flights by the middle of April or so.....

User currently offlineLV From United States of America, joined Jun 2001, 1992 posts, RR: 0
Reply 22, posted (3 years 4 months 2 weeks 2 days 3 hours ago) and read 19833 times:

What's the price of the doubt it would put in passengers mine if the Titantic of our time (by that I mean the newest fastest best marketed way to jump from continent to continent) were to be lost on one of it's first voyages? We should all thank whatever higher power you believe in the situation didn't end the same as the Titantic but 150M is small potatoes to reassure pax this type of plane is safe and it's a one off situation.

User currently offlineastuteman From United Kingdom, joined Jan 2005, 9978 posts, RR: 96
Reply 23, posted (3 years 4 months 2 weeks 2 days 3 hours ago) and read 19578 times:
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Quoting IMissPiedmont (Reply 9):
Quoting flyingclrs727 (Reply 1):
How many years would QF have to wait for a new replacement A380 ordered today?

Probably not many. There isn't exactly a large backlog though Airbus is not likely to increase the output rate for just a few airframes.

You have to be kidding.........

Quoting kanban (Reply 10):
there are some cancellation slots in 2014 otherwise they're looking at around 2018

  

sounds about right...

Rgds


User currently offlineClassicLover From Ireland, joined Mar 2004, 4627 posts, RR: 23
Reply 24, posted (3 years 4 months 2 weeks 2 days 3 hours ago) and read 19825 times:

Quoting PH-TVH (Reply 11):
In their whole history they never had any hull loss, so they probably want to keep it that way.
So yes, even if its an economical write-off, they still want to repair it, just to keep the number
of hull losses at 0. Scraping the airframe for parts will count as a "hull-loss" (don't pin me to
that one, but seems logical)

They did the same to the 747-400 that overrun the runway at Bangkok, back in 1999.
Cost a fortune to repair, but you can't put a price on "0 hull-losses" obviously.
Quoting PH-TVH (Reply 15):
Don't know when something counts as a "hull-loss", only know that they repaired the crashed 747-400 in 1999,
just to prevent a hull-loss...

Please.

Everyone knows the aircraft are insured, and it's up to the insurance company to make the decision, not the airline. If the insurance company agrees it's a hull loss, so it is. If it's repairable and it will be cheaper to repair than to pay for a replacement, then it will be repaired.

Both the Qantas 1 incident in 1999 and the Qantas 32 are repairable - the aircraft were both not destroyed in any way shape or form, hence the repair.



I do quite enjoy a spot of flying - more so when it's not in Economy!
25 Lufthansa : I think the biggest question here is how far they go with the repair? Are thy going to add additional operating weight to the a/c or are they going t
26 KC135TopBoom : Unfortunately, it will be the bean counters that make this call. They will look at (up to) $150M repair costs, who will initially pay those costs (QF?
27 SEPilot : I think this is an oversimplification. First, the insurance company only dictates how much they will pay; the airline will decide whether or not they
28 scbriml : Exactly, that's the only equation that applies. Why is that unfortunate? It's their job! As it always is in such cases.
29 kanban : seems there was a comment also that this was no bigger deal than replacing a wing to body fairing.. re costs..pride costs a lot and has been the down
30 SEPilot : No, it's not; there is the factor of the loss of use. If they cannot get a replacement before 2018 then that would be a huge sum, and could well tip
31 bravo1six : Not quite that simple. In both examples you're using, it depends on what the contract says. Most contracts with OEMs in the aviation world contain li
32 MPDPilot : They would likely settle on something less before make payments throughout the life of the aircraft. Of course it isn't that simple but that is a sim
33 zeke : It had started, all the engines had been removed, as well as some other items. It is well underway, the extent of the damage needed to be fully asses
34 QFFlyer : This is true, and as I noted in an earlier thread, the added weight of the repair isn't a whole lot, but any perfo penalties much be accepted by QF.
35 tdscanuck : I think there was speculation about that, but no confirmation. It's certainly not obvious that they *have* to replace the wing. Sure they can. Aircra
36 QFFlyer : The wing is not being replaced. This was a misguided and incorrect rumour which keeps appearing - along with the "wing is twisted" rumour.
37 kanban : the wing twist may have come from a video showing a heat contour forming of the main upper skin... after these months of damage analysis, do we know
38 Baroque : Today: [i]1.00 AUD = 0.982167 USD but last week it was 1.01 before a goodly portion of Japan went under the oh so "Pacific". Next week, probably back
39 Post contains links Aesma : The wing twist "rumor" is from me and is not a rumor, I provided a flightglobal article several times already, wings being built in the UK now have a
40 Airvan00 : But that is now irreverent in this case. It was a problem when there was an a.net rumor that the whole wing would need replacing. The confusion arous
41 Post contains images Baroque : Would that it had (the right way) and then the problem would be to twist the other one!
42 Navigator : The airline of course makes financial evaluations about this. If it made no sense repairing they would not do it. There is no way to comment this fro
43 bravo1six : Any good contract lawyer will tell you that some clauses cannot be "gotten around", such as a limitation of liability clause. I should know - I am on
44 Post contains images flyinryan99 : You're pretty close. Essentially the aircraft is insured for an agreed value. I'm sure there's a clause in either the bank's or the insurance policy
45 SEPilot : This is what I was thinking; I did not specifically state it in my previous post.
46 Post contains images AirbusA6 : $50m to repair the plane $100m to pay the lawyers
47 Post contains images flyinryan99 : Gotchya I figured I would elaborate a little bit more to make sure there is a differentiation between the policies that are going to be in play. I kn
48 Aerofan : Makes no sense to me. Isn't that abou the cost of a brand new 744? QF's prices for J and F make no sense to me either ... so I guess they are the mast
49 kanban : other than one can not buy a new 744...only a 748i
50 Airvan00 : Lots of people pay those fares. People are not stupid. They must think they are getting value for money.
51 EK413 : Considering this aircraft continues to operate with nil issues I personally fill this was the right decision to have VH-OJH repaired... From memory t
52 Aerofan : People are not stupid??? Is that an attempt at a joke?
53 AirNZ : Except in amongst the incorrect rhetoric it is the insurance company who decides.......not QF/RR or anyone else!
54 kanban : the insurance company may write off the plane and pay QF or whoever holds the title, QF can buy the hull from the insurance company and pump whatever
55 zeke : It amazes me that many people cannot distinguish between the repair costs and the damages costs for not being able to operate e the aircraft. No doub
56 DocLightning : Not really. You have to factor in interest on deposits, lost revenue while waiting for the new delivery, all that junk. What that means is that the c
57 KC135TopBoom : But if the insurance company write the airplane off and pays QF (or whoever actually owns the airframe), and QF, Airbus and RR then repair the airpla
58 gemuser : The same insurance company! Why wouldn't they? They will assess the extra risk, if any, with the repaired airframe and charge accordingly. Gemuser
59 ikramerica : In the auto policy world in the USA, the car in this situation would be given a "salvage" title and then would not be insurable for additional loss,
60 gemuser : I don't see why not. You can in the Australian auto world, as long as all policy requirements are met. Back in the bad old days of high tariffs on ca
61 na : 150 million to repair a plane worth 250 million ore more still? Surely that makes sense, what a question. Just recently it was said it would be about
62 Post contains images gr8circle : They can buy one from EK once EK realises they have no routes to fly their three dozen 380s on
63 kanban : correct me if I'm wrong, however I believe QF did not own the engines and they were leased .. so the cost of the engines is not in the QF insurance s
64 zeke : Leased or owned, the power plants/apu would be covered by the aircraft insurance policy, they form part of the aircraft. The $150 million is not just
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