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A380 Grounding Cost Us US$30mn A Month - Emirates  
User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Posted (2 years 6 months 1 week 2 days 17 hours ago) and read 19152 times:

So who pays for this? Emirates or Airbus?

http://www.arabianbusiness.com/a380-...0m-month-emirates-exec-461954.html

73 replies: All unread, showing first 25:
 
User currently offlinesweair From Sweden, joined Nov 2011, 1831 posts, RR: 0
Reply 1, posted (2 years 6 months 1 week 2 days 17 hours ago) and read 19156 times:

With all that income from oil, I am sure they can bare the cost?

User currently offlineoldeuropean From Germany, joined May 2005, 2091 posts, RR: 4
Reply 2, posted (2 years 6 months 1 week 2 days 17 hours ago) and read 19128 times:

Quoting sweair (Reply 1):
With all that income from oil, I am sure they can bare the cost?

And your point is?

Emirates is an oil company?  



Wer nichts weiss muss alles glauben
User currently offlinemoo From Falkland Islands, joined May 2007, 4089 posts, RR: 4
Reply 3, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 19068 times:

Quoting EK156 (Thread starter):
So who pays for this? Emirates or Airbus?

Emirates.

You dont get compensation from Toyota when your car is recalled for a warranty replacement, do you? Same situation here.


User currently offlineQatarA340 From Qatar, joined May 2006, 1883 posts, RR: 10
Reply 4, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 19065 times:

Quoting sweair (Reply 1):
With all that income from oil, I am sure they can bare the cost?

EK is from DXB, and DXB is not an oil economy.



لا اله الا الله محمد رسول الله
User currently offlineSEPilot From United States of America, joined Dec 2006, 7121 posts, RR: 46
Reply 5, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 19004 times:

Quoting sweair (Reply 1):
With all that income from oil, I am sure they can bare the cost?

In any case, that is not the issue. The issue is who is legally obligated. I am quite sure that the liability of Airbus is limited to making repairs; loss of use is on the airline except in very unusual circumstances.



The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
User currently offlinesweair From Sweden, joined Nov 2011, 1831 posts, RR: 0
Reply 6, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 18952 times:

I was just joking, relax.. But I do think they will have to pay for it.

User currently offlineAsoRock From Bahrain, joined May 2006, 322 posts, RR: 0
Reply 7, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 18855 times:

Quoting sweair (Reply 6):

Yeah the same old tired joke from a decade ago  


User currently offlinebmibaby737 From United Kingdom, joined Jun 2005, 1835 posts, RR: 9
Reply 8, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 18785 times:

Just for info.... all of the A380s are now active with the exception of A6-EDK which hasn't flown since 25th March 2012.

User currently offlinesweair From Sweden, joined Nov 2011, 1831 posts, RR: 0
Reply 9, posted (2 years 6 months 1 week 2 days 16 hours ago) and read 18725 times:

Quoting AsoRock (Reply 7):
Yeah the same old tired joke from a decade ago

 


User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Reply 10, posted (2 years 6 months 1 week 2 days 15 hours ago) and read 18514 times:

Well look at it this way. Many passengers who booked and paid to fly the A380 were downgraded to A330 or the old 777. I would imagine EK had to compensate alot of those passengers in one way or another who paid big bucks to the fly the A 380!!!

I guess this scenario would not be covered by Airbus. But not being able to fly the A380 due to a manufacturing defect must bear consequences on Airbus in one way or another! There was a chain reaction of losses on EK and Airbus must cover some of that!

Just my view on the situation!


User currently offlinesweair From Sweden, joined Nov 2011, 1831 posts, RR: 0
Reply 11, posted (2 years 6 months 1 week 2 days 15 hours ago) and read 18464 times:

There must be warranty agreements? If this is covered by warranty Airbus pays, if not Emirates pay.

User currently offlinenighthawk From UK - Scotland, joined Sep 2001, 5182 posts, RR: 33
Reply 12, posted (2 years 6 months 1 week 2 days 15 hours ago) and read 18448 times:

Quoting sweair (Reply 11):
There must be warranty agreements? If this is covered by warranty Airbus pays, if not Emirates pay.

typical warranty agreements only cover the cost of repairs, not losses of revenue or other costs encountered trying to cover for the loss of item.

It depends on the contracts, but I would imagine Airbus would pay for the repairs, but Emirates would need to foot the bill for leasing replacement planes or otherwise rebooking/compensating passengers.



That'll teach you
User currently offlineQuokkas From , joined Dec 1969, posts, RR:
Reply 13, posted (2 years 6 months 1 week 2 days 14 hours ago) and read 18349 times:

Emirates (and other operators) will pay for any losses of revenue or compensation paid to passengers, but the repair costs themselves would be borne by Airbus. The warranty would cover defective parts replacement or repair but other things like lost revenue are beyond the scope of warranties., particularly as it would be difficult to prove passengers chose to fly with other airlines because they couldn't fly on an A380 or because in some instances the airline gave additional miles to customers who found themselves on a 77W instead.

Quote:
Airbus has said it will cover the cost of the repairs but will not pay any compensation for lost revenue during the work.
http://www.theage.com.au/travel/trav...r-plane-to-fix-20120612-206wv.html


User currently offlineRevelation From United States of America, joined Feb 2005, 12947 posts, RR: 25
Reply 14, posted (2 years 6 months 1 week 2 days 14 hours ago) and read 18290 times:

Quoting EK156 (Reply 10):
Well look at it this way. Many passengers who booked and paid to fly the A380 were downgraded to A330 or the old 777. I would imagine EK had to compensate alot of those passengers in one way or another who paid big bucks to the fly the A 380!!!

A lot?

Chances are, not a cent.

EK has a terms of carriage document that will tell you what you are entitled to as a pax, and I've never heard of any obligation for an airline to compensate for change of equipment.

At best, they may throw a VVIP some sort of perk to smooth things over, the rest will be told how comfortable the 777 or A330 is, yada yada.

I love your enthusiasm, but it just isn't lining up with reality...



Inspiration, move me brightly!
User currently offlineBrouAviation From Netherlands, joined Jun 2009, 985 posts, RR: 1
Reply 15, posted (2 years 6 months 1 week 2 days 14 hours ago) and read 18195 times:

Quoting moo (Reply 3):

You dont get compensation from Toyota when your car is recalled for a warranty replacement, do you? Same situation here.

Comparing apples with pears here, as 'you' in this case is a private customer, while EK is a corporate customer with income depending on the A380. It is not unusual at all when a customer asks for compensation when production has been stopped due to mistakes made by the manufacturer.

And Toyota might not pay you, they do give you a rental car free of charge which airbus does not either.



Never ask somebody if he's a pilot. If he is, he will let you know soon enough!
User currently offlineEK156 From United Arab Emirates, joined May 2005, 765 posts, RR: 3
Reply 16, posted (2 years 6 months 1 week 2 days 14 hours ago) and read 18150 times:

Quoting Revelation (Reply 14):
A lot?

Chances are, not a cent.

EK has a terms of carriage document that will tell you what you are entitled to as a pax, and I've never heard of any obligation for an airline to compensate for change of equipment.

At best, they may throw a VVIP some sort of perk to smooth things over, the rest will be told how comfortable the 777 or A330 is, yada yada.

I love your enthusiasm, but it just isn't lining up with reality...

Actually A380 tickets most of the time cost more than A330,340 and 777 tickets. You can check it on emirates.com , and when it comes to business class I would definitely be pissed off and would ask for compensation if I paid a big amount for flying the A380 and then have to fly A330 or 777 Old business class. And if you are a silver or gold skywards member that's even another story! Emirates must have compensated in one way or another!


User currently offlineB777LRF From Luxembourg, joined Nov 2008, 1465 posts, RR: 3
Reply 17, posted (2 years 6 months 1 week 2 days 14 hours ago) and read 18119 times:

It is, as mentioned, all down to the legalese in the contract between EADS and Emirates, and I can assure you EADS would not have signed a contract that makes them liable for covering of indirect costs or loss of revenue.

Neither will Toyota, bringing that example back to the conversation, and that's regardless of whether they sell a single car to a private owner, or a whole fleet of them to a corporation. Toyota may provide replacement vehicles for the duration of the repairs, but whilst there are many Hertz', Avis' etc. in the world, it's hardly as if you can bowl up to your local "Rent a Plane" and fly away in an A380, or any other large commercial airliner for that matter - the supply simply does not exist.



From receips and radials over straight pipes to big fans - been there, done that, got the hearing defects to prove
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 18, posted (2 years 6 months 1 week 2 days 14 hours ago) and read 18089 times:

Quoting EK156 (Reply 10):
I guess this scenario would not be covered by Airbus. But not being able to fly the A380 due to a manufacturing defect must bear consequences on Airbus in one way or another! There was a chain reaction of losses on EK and Airbus must cover some of that!

Airbus only has to cover what's in the warranty; I've never heard of any airliner warranty that includes lost revenue. If that were a common term, aircraft would cost a lot more.

Quoting sweair (Reply 11):
There must be warranty agreements? If this is covered by warranty Airbus pays, if not Emirates pay.

There are warranty agreements. They don't cover lost revenue. That's known and understood by both the OEM's and the airlines.

Quoting BrouAviation (Reply 15):
It is not unusual at all when a customer asks for compensation when production has been stopped due to mistakes made by the manufacturer.

It's not unusual to *ask*. It's virtually unheard of, in the airliner world, for the OEM to pay it.

Tom.


User currently offlineBrouAviation From Netherlands, joined Jun 2009, 985 posts, RR: 1
Reply 19, posted (2 years 6 months 1 week 2 days 13 hours ago) and read 17977 times:

Quoting tdscanuck (Reply 18):

It's not unusual to *ask*. It's virtually unheard of, in the airliner world, for the OEM to pay it.

The question is why, as in other sectors it is not unusual at all.

Boeing is paying hefty compensations for the airlines having to fly guzzling 767s for 3 more years than they expected to. Now, Airbus delivered their aircraft, not according to spec now appears, and all of a sudden the airlines will not be compensated anymore?

When you don't have the airplane when you expected to have it, you get compensated, but when you have the aircraft and you suddenly loose it because of the OEM screwing up, which is a much more expensive and difficult situation to solve for the airline, they have to sort things out themselves?

Quoting B777LRF (Reply 17):
Toyota may provide replacement vehicles for the duration of the repairs, but whilst there are many Hertz', Avis' etc. in the world, it's hardly as if you can bowl up to your local "Rent a Plane" and fly away in an A380, or any other large commercial airliner for that matter - the supply simply does not exist.

Not relevant at all. There are plenty of 747's available for rent who can do the job, at higher costs. Why would the airline have to pay for this when the OEM screwed up big time, again?

Am I right when I suspect EK getting a sweeter deal on for example A350's in the future because of this?



Never ask somebody if he's a pilot. If he is, he will let you know soon enough!
User currently offlinemoo From Falkland Islands, joined May 2007, 4089 posts, RR: 4
Reply 20, posted (2 years 6 months 1 week 2 days 13 hours ago) and read 17977 times:

Quoting BrouAviation (Reply 15):
Comparing apples with pears here, as 'you' in this case is a private customer, while EK is a corporate customer with income depending on the A380.

And theres no difference between the two.

A product was bought. A warranty was given.

And this might shock you, but private people are not the only purchasers of Toyotas - I've worked for a vehicle fleet management company in the UK, and I've seen commercial fleet recalls from the inside. No compensation is offered, and its rarely given on request - in very specific circumstances you get compensation when you fight for it (for example, an engine dying after 10,000 miles).

So I certainly am comparing apples with apples here - one apple just happens to be larger than the other, and gets sold less.

Quoting BrouAviation (Reply 15):
It is not unusual at all when a customer asks for compensation when production has been stopped due to mistakes made by the manufacturer.

Its not unusual for a customer to ask, but its nowhere near guaranteed that they will get.

Quoting BrouAviation (Reply 15):
And Toyota might not pay you, they do give you a rental car free of charge which airbus does not either.

I've *never* seen a car manufacturer give a rental car on a warranty recall - I've seen garages give them, if they have one spare at the time, but never have I seen a manufacturer actually arrange one.

During my time at the aforementioned vehicle management company, the routine was to book a hire vehicle for the period the warranty repair was being carried out, and that hire vehicle cost was borne by the owner of the vehicle.


User currently offlinemoo From Falkland Islands, joined May 2007, 4089 posts, RR: 4
Reply 21, posted (2 years 6 months 1 week 2 days 13 hours ago) and read 17924 times:

Quoting BrouAviation (Reply 19):
Boeing is paying hefty compensations for the airlines having to fly guzzling 767s for 3 more years than they expected to. Now, Airbus delivered their aircraft, not according to spec now appears, and all of a sudden the airlines will not be compensated anymore?

The difference is that no product is ever delivered without defects - thats why in civilised countries warranties are required by law on most products, so its reasonable to assume that whatever you buy and whatever you pay for it, it could end up with a problem that has to be fixed by the manufacturer.

Delivering a product without any defects at all, and you are either delivering a very simple product or you arent ever going to deliver.

On the flip side, delivering to a contract is something that you should be certain that you are able to do when you agree to the contract - if you said "in three years I can deliver you an airplane", and you said it in good faith, then its reasonable to hold you to those terms. The fact that there are delay compensations built into every aircraft contract suggests that its known that there is reasonable leeway in a delivery schedule, however doubling the delivery period is not "reasonable leeway", its far beyond that.

If the contract said "pay us compensation for warranty claims", or "ensure the product has no defects at all", then suddenly (as many people have already said) you've just increased the cost of that product extortionately.


User currently offlinevc10 From United Kingdom, joined Nov 2001, 1412 posts, RR: 16
Reply 22, posted (2 years 6 months 1 week 2 days 13 hours ago) and read 17782 times:

Quoting QatarA340 (Reply 4):


Whilst basically agreeing with when you compare Dubai with it's neighbours,but Dubai actually does have oil reserves and pumps between 50,000 and 70,000 barrels of crude per day plus a large quantity of gas. It's peak output was back in 1991 when I believe it pumped about a quarter of a million barrels per day.

How much of this revenue can be used to support it's airline is very small if any as Dubai seems to have debts amounting to $100 billion

http://www.moneycontrol.com/news/bus...l-discoverydubais-debt_440035.html

As to who pays for the cracks well I am sure the figure will be resolved by negotiation behind closed doors and just because Emirates says it is losing $30 million per month this is probably their opening bid for the negotiations rather than the actually figure.

Littlevc10


User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 23, posted (2 years 6 months 1 week 2 days 13 hours ago) and read 17752 times:

Quoting BrouAviation (Reply 19):

Quoting tdscanuck (Reply 18):

It's not unusual to *ask*. It's virtually unheard of, in the airliner world, for the OEM to pay it.

The question is why, as in other sectors it is not unusual at all.

In other comparable sectors, it's extremely unusual. The lost revenue cost on large capital assets like airplanes is enourmous...the OEM's and airlines agreed a long time ago on the split: OEM's covered the cost of repair, airlines covered the cost of lost revenue. They could do it the other way but the whole pricing structure of aircraft would have to change.

Similar industries are oilfield, mining, etc, where the loss of a large capital asset can easily cost hundreds of thousands or millions of dollars per day. An airliner is not a Toyota.

Quoting BrouAviation (Reply 19):
Boeing is paying hefty compensations for the airlines having to fly guzzling 767s for 3 more years than they expected to

No, they're not. They're paying because they said they'd deliver on a certain day and they didn't. That's very different, contractually, than delivering an aircraft then later having it down for repair.

Quoting BrouAviation (Reply 19):
Now, Airbus delivered their aircraft, not according to spec now appears, and all of a sudden the airlines will not be compensated anymore?

Airbus is paying their share: the cost of the repair. They're not paying the lost revenue. That's not what either side agreed to.

Quoting BrouAviation (Reply 19):
When you don't have the airplane when you expected to have it, you get compensated, but when you have the aircraft and you suddenly loose it because of the OEM screwing up, which is a much more expensive and difficult situation to solve for the airline, they have to sort things out themselves?

No, they have to absorb the lost revenue themselves. The OEM is responsible for getting the aircraft back in service (paying the repair, equivalent to paying a delay payment for delivery). Boeing isn't paying lost revenue payments for late 787's either (Air India notwithstanding).

Tom.


User currently offlinesomething From United Kingdom, joined May 2011, 1633 posts, RR: 21
Reply 24, posted (2 years 6 months 1 week 2 days 12 hours ago) and read 17616 times:

Quoting sweair (Reply 1):
With all that income from oil, I am sure they can bare the cost?

Dubai's projected oil revenues in 2012 amount to $140bn. Just to preempt the ''Dubai doesn't make any money off oil'' arguments.

Quoting oldeuropean (Reply 2):
Emirates is an oil company?

Emirates is owned by the government of Dubai who owns the oil. It's circular.

Quoting moo (Reply 3):
You dont get compensation from Toyota when your car is recalled for a warranty replacement, do you? Same situation here.

In most first world nations, you would be entitled to a replacement - be that a rental car, or a taxi.

Quoting EK156 (Reply 10):
I guess this scenario would not be covered by Airbus. But not being able to fly the A380 due to a manufacturing defect must bear consequences on Airbus in one way or another! There was a chain reaction of losses on EK and Airbus must cover some of that!

Just my view on the situation!

And your view is consistent with that of most jurisdictions in Europe.

Quoting Revelation (Reply 14):
EK has a terms of carriage document that will tell you what you are entitled to as a pax, and I've never heard of any obligation for an airline to compensate for change of equipment.

Emirates Airlines is an enterprise that can write whatever it so pleases in its terms of carriage. But Emirates Airlines also want to make money and build up a solid reputation. It is just good business practice and customer service to compensate your paying customers if you can't deliver the advertized product.

Quoting Revelation (Reply 14):
I love your enthusiasm, but it just isn't lining up with reality...

It is actually your argument that runs parallel to reality.

EK are indeed compensating passengers for the downgrade
http://www.ausbt.com.au/emirates-off...ds-for-downgrades-from-airbus-a380

Quoting BrouAviation (Reply 19):
but when you have the aircraft and you suddenly loose it because of the OEM screwing up, which is a much more expensive and difficult situation to solve for the airline, they have to sort things out themselves?

Airbus is not paying more in compensation than the $350m. figure floating about because it needs its annual balance to be above a certain threshold. Compensation would be counted against the annual profit which would disgruntle not only shareholders but also limit Airbus' immediate financial freedom.

Quoting BrouAviation (Reply 19):
Am I right when I suspect EK getting a sweeter deal on for example A350's in the future because of this?

This is exactly what is being done in lieu of monetary payments. Though I am not sure how well adviced this strategy is. Raising capital has never been as cheap as it is today; on the other hand, this way Airbus ensures future sales. They will have done what's best for them.

Quoting moo (Reply 20):
And this might shock you, but private people are not the only purchasers of Toyotas - I've worked for a vehicle fleet management company in the UK, and I've seen commercial fleet recalls from the inside. No compensation is offered, and its rarely given on request - in very specific circumstances you get compensation when you fight for it (for example, an engine dying after 10,000 miles).

If you no longer work for them, I suppose they let you go because of the above described work practices?

The UK law is fairly difficult to grasp. It's ancient and not codified as that of most other nations and as such, leaves much more freedom for interpretation than say, the German law. However, ''even'' the UK law is very clear on contract formation and entailed obligations of said.

[Edited 2012-06-13 06:53:29]


..sick of it. -K. Pilkington.
User currently offlinemoo From Falkland Islands, joined May 2007, 4089 posts, RR: 4
Reply 25, posted (2 years 6 months 1 week 2 days 12 hours ago) and read 17807 times:

Quoting something (Reply 24):
In most first world nations, you would be entitled to a replacement - be that a rental car, or a taxi.

Not under UK law you aren't - you aren't legally entitled to a temporary replacement nor have your cost of operating covered while the warranty repair is undertaken.

And I haven't yet seen such a requirement in any other country, either. I have no doubt that some country out there has such a requirement, but Ive yet to come across it.

Quoting something (Reply 24):
The UK law is fairly difficult to grasp. It's ancient and not codified as that of most other nations and as such, leaves much more freedom for interpretation than say, the German law. However, ''even'' the UK law is very clear on contract formation and entailed obligations of said.

UK law can indeed be fairly difficult to grasp, but in this case there isn't any codification of what you are suggesting.

The Sales of Goods Act does specify 'repair or, as the case may be, replace the goods within a reasonable time but without causing significant inconvenience to the buyer;'

"Significant inconvenience" has been shown in case law to be a fairly high bar - the fact that you have to rent a hire car does not breach this and is not a cost that has to be covered by the seller. If you had no other means of carrying on your business while the item is being repaired or replaced, that would be a "significant inconvenience" and subject to breach of that term.

The meaning of the term is such that the repair or replacement should be carried out at the earliest possible time - not thrown in a pile and made to sit there for months before you get it back. If it can't be repaired in reasonable time, the seller must provide a replacement. If the replacement cannot be issued in a reasonable time, the seller must issue a refund.

Quoting something (Reply 24):
If you no longer work for them, I suppose they let you go because of the above described work practices?

Is a personal attack really required? No, it wasn't - I worked in IT, I didn't deal with the issues directly but I had access to all the data and reports on the matters.


User currently offlineRevelation From United States of America, joined Feb 2005, 12947 posts, RR: 25
Reply 26, posted (2 years 6 months 1 week 2 days 12 hours ago) and read 17408 times:

I know EK wants to keep customers happy, but personally I have a hard time seeing them setting a broad precedent that they will compensate pax when there is an equipment substitution. If they did, any hiccup in their fleet would be magnified tremendously. It's not like they can snap their fingers and make another A380 appear out of thin air, nor can they rebook everyone to A380 flights without creating havoc.


Inspiration, move me brightly!
User currently offlineEPA001 From Netherlands, joined Sep 2006, 4944 posts, RR: 40
Reply 27, posted (2 years 6 months 1 week 2 days 11 hours ago) and read 17217 times:
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Quoting BrouAviation (Reply 15):
And Toyota might not pay you, they do give you a rental car free of charge which airbus does not either

Are you sure they are doing this for every repair under warranty?  .

Quoting B777LRF (Reply 17):
and I can assure you EADS would not have signed a contract that makes them liable for covering of indirect costs or loss of revenue.

Which is only logical and normal.

Quoting tdscanuck (Reply 18):
It's not unusual to *ask*. It's virtually unheard of, in the airliner world, for the OEM to pay it

It is.

Quoting BrouAviation (Reply 19):
not according to spec now appears

Incorrect. The aircraft was build and delivered according to specs. And the customer (EK) signed off on that when they accepted the airplane as it was.

Now Airbus have made intermediate repairs, and are finalising the real solution to the problem. Then news specs will exist. And since there is one or more AD out on this issue, Airbus will cover the cost of bringing the airplanes up to the level of the new specs. They will of course not cover the loss of (theoretical) revenues.

Quoting moo (Reply 21):
The difference is that no product is ever delivered without defects - thats why in civilised countries warranties are required by law on most products, so its reasonable to assume that whatever you buy and whatever you pay for it, it could end up with a problem that has to be fixed by the manufacturer.

Totally true. That is how a warranty usually works.


User currently offlinewindshear From Denmark, joined Mar 2000, 2334 posts, RR: 11
Reply 28, posted (2 years 6 months 1 week 2 days 11 hours ago) and read 17082 times:

It's funny how truth can get twisted with out people even realizing it.

The UAE is where DXB is located, and the UAE is still in the top 5 list over the world's top oil exporters, so what do you mean when you say that DXB is not an oil economy? 25% of their GDP comes from oil and gas, and that is after they underwent a major transformation in an attempt to lower this percentage.

Boaz.



"If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
User currently offlineEPA001 From Netherlands, joined Sep 2006, 4944 posts, RR: 40
Reply 29, posted (2 years 6 months 1 week 2 days 11 hours ago) and read 16703 times:
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Quoting windshear (Reply 28):
DXB is not an oil economy

The seven Emirates are treating the income out of exporting oil separately when it comes to financial accounting. The economy of Dubai consists for less then 5% of Oil exports. Abu Dhabi has a far larger income out of Oil exports.

Also in the financial reports made by EK everyone can read that they are not getting the fuel for their birds cheaper then anyone else. So in that respect the fact that the UAE have large oil reserves does not directly reflect on EK as an airline. Many threads have already been posted on this subject.


User currently offlinerotating14 From United States of America, joined Jan 2012, 723 posts, RR: 0
Reply 30, posted (2 years 6 months 1 week 2 days 10 hours ago) and read 15777 times:

Im sure that EK and Airbus have a fairly good relationship but does this discord over compensation and the loss of revenue hurt future orders??

User currently offlinemoo From Falkland Islands, joined May 2007, 4089 posts, RR: 4
Reply 31, posted (2 years 6 months 1 week 2 days 10 hours ago) and read 15697 times:

Just asked a lawyer, and his reply is quite obvious - the seller does not take on the cost of the buyers business, or the cost of the buyer conducting business.

It would be a horrifically bad situation if it were the other way round - a seller could sell something and buyers x, y and z could all use it in their business, but with z being at the top end seriously expensive part of the market, and x being at the bottom end seriously cheap end of the market - totally different costs involved in running each business, and the seller would be liable for essentially a lottery of costs. Thank goodness its not the case.


User currently offlineblueflyer From United States of America, joined Jan 2006, 4178 posts, RR: 2
Reply 32, posted (2 years 6 months 1 week 2 days 10 hours ago) and read 15345 times:
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Quoting Revelation (Reply 26):
I know EK wants to keep customers happy, but personally I have a hard time seeing them setting a broad precedent that they will compensate pax when there is an equipment substitution.

It is probably handled on a case-by-case basis for premium passengers, with one-time fliers receiving a nice email about how comfortable the 777 really is, and elite frequent fliers given some sort of token compensation.

UA is doing exactly the same thing in dealing with complaints from passengers who unexpectedly find themselves on the (really) old Business Class instead of the (much improved) new Business Class. Status-less customers are quoted the conditions of carriage and thanked for their business, top elite customers get a few extra miles...



I've got $h*t to do
User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 33, posted (2 years 6 months 1 week 2 days 9 hours ago) and read 15359 times:
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There's certainly some A-net myths being busted here....  
Quoting EK156 (Thread starter):
A380 Grounding Cost Us US$30mn A Month - Emirates

So despite the fact that most of EK's A380's are actually flying (myriads of recent youtube videos in support), when EK get the few that are on the ground back in service, they're going to increase their profits by $360m per annum....
They must make a LOT of money on these A380's   

(The plane that they're not part of the real market for anyway....    )

not to mention these....

Quoting EK156 (Reply 16):
Actually A380 tickets most of the time cost more than A330,340 and 777 tickets. You can check it on emirates.com , and when it comes to business class I would definitely be pissed off and would ask for compensation if I paid a big amount for flying the A380 and then have to fly A330 or 777 Old business class
Quoting something (Reply 24):
EK are indeed compensating passengers for the downgrade

Pretty impressive when we've been told no passengers will actually recognise they're flying on an A380 anyway   

Quoting something (Reply 24):
Airbus is not paying more in compensation than the $350m. figure floating about because it needs its annual balance to be above a certain threshold.

doesn't even remotely pass the red-faced test   

Quoting something (Reply 24):
Quoting BrouAviation (Reply 19):Am I right when I suspect EK getting a sweeter deal on for example A350's in the future because of this?
This is exactly what is being done in lieu of monetary payments

I'd suggest evidence is in order, according to the forum rules, before presenting a comment like this as "exactly fact".

If you want to advance an opinion that EK will most likely use this to extract leverage from Airbus at some point, I think most of us would buy that..

What puzzles me about this debate is:-
Aircraft go "tech" all the time. Even new ones.
EK have 25 A380's flying 300 sectors year I'd guess. Even with a dispatch reliability of 99%, that's 75 flights a year that "don't go", and should therefore "demand such "compensation".
For the 100 777's they operate, that figure will be 300 flights a year that don't get off the ground without having to be reorganised in some way.
Are we saying that Boeing and/or GE pay compensation every time this occurs?   

Quoting tdscanuck (Reply 18):
If that were a common term, aircraft would cost a lot more.

I have to say that this is where I end up....
Still. I don't think we've had "free A350's" until this week. we can be thankful for that at least   
It had to come sooner or later  

Rgds


User currently offlinekanban From United States of America, joined Jan 2008, 3856 posts, RR: 27
Reply 34, posted (2 years 6 months 1 week 2 days 9 hours ago) and read 15085 times:
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Quoting moo (Reply 3):
You dont get compensation from Toyota when your car is recalled for a warranty replacement, do you? Same situation here.



My Jeep dealer paid for a rental ... so it's rare but not unheard of

Quoting EK156 (Reply 10):
I would imagine EK had to compensate a lot of those passengers in one way or another who paid big bucks to the fly the A 380!!!



An A.net myth that normal (most) people pay to fly a specific a/p model rather than just buying a ticket to get from point W to point Q... (somehow points A and B seemed inappropriate here).


User currently offlineenilria From Canada, joined Feb 2008, 7691 posts, RR: 15
Reply 35, posted (2 years 6 months 1 week 2 days 9 hours ago) and read 14459 times:

Quoting SEPilot (Reply 5):
Quoting sweair (Reply 1):
In any case, that is not the issue. The issue is who is legally obligated. I am quite sure that the liability of Airbus is limited to making repairs; loss of use is on the airline except in very unusual circumstances.
Quoting nighthawk (Reply 12):
typical warranty agreements only cover the cost of repairs, not losses of revenue or other costs encountered trying to cover for the loss of item.
Quoting B777LRF (Reply 17):
It is, as mentioned, all down to the legalese in the contract between EADS and Emirates, and I can assure you EADS would not have signed a contract that makes them liable for covering of indirect costs or loss of revenue.
Quoting tdscanuck (Reply 18):
Airbus only has to cover what's in the warranty; I've never heard of any airliner warranty that includes lost revenue. If that were a common term, aircraft would cost a lot more.

It is my experience that while it is not expressed in the contract that Airbus must pay for the lost revenue, EK will ask for the lost revenue. That is very common. IMHO, EK is owed not the lost revenue, but the reduction in net result. Airbus should not have to pay for JET A never purchased, for example.

Regardless of what Airbus truly owes contractually, Emirates is probably their biggest customer. They cannot simply walk away from this. This was their design problem. Emirates will probably get a free plane or some kind of compensation. If they do not offer that they can expect EK will be a Boeing customer exclusively in the future. Business is business regardless of what the contract says.


User currently offlinebrilondon From Canada, joined Aug 2005, 4414 posts, RR: 2
Reply 36, posted (2 years 6 months 1 week 2 days 7 hours ago) and read 13312 times:

Quoting sweair (Reply 1):
With all that income from oil, I am sure they can bare the cost?

They may have money, but the reason they have it is that they don't spend it stupidly on things that they can get Airbus to have to pony up for. If the fault lies with Airbus then they are obligated to fix the problem, but they are not obligated to compensate for loss revenue based on EK's losses.



Rush for ever; Yankees all the way!!
User currently offlineWingedMigrator From United States of America, joined Oct 2005, 2259 posts, RR: 56
Reply 37, posted (2 years 6 months 1 week 2 days 6 hours ago) and read 12789 times:

For all the talk of lost revenue, the article in the OP describes a $30 million/month loss in PROFIT, not revenue. The revenue loss is no doubt much larger.

Can one infer that each A380 is bringing them ~1.4 million/month in profit?


User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 38, posted (2 years 6 months 1 week 2 days 6 hours ago) and read 12554 times:
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Quoting WingedMigrator (Reply 37):
For all the talk of lost revenue, the article in the OP describes a $30 million/month loss in PROFIT, not revenue. The revenue loss is no doubt much larger.

Can one infer that each A380 is bringing them ~1.4 million/month in profit?

That was my point, really. Your calculation requires ALL of the A380's to be grounded the whole time for $1.4M a month to be the profit their A380's make.
But this clearly isn't the case. The large majority of their A380's have clearly continued flying, with only a few on the ground at any one time.

So. Either EK's A380's pay for themselves roughly every two years....   
Or the $30M in lost profit per month is bluster, at best.

It's not like they have to withdraw them from service with zero notice.
There is no AD stopping these aircraft flying, so they can plan, and choose, when to take them off-line at a time that suits them.
And by aligning that to pre-planned checks anyway, minimise the impact.

I dunno. We can't see the numbers. But if withdrawing a handful of A380's each months costs $30M in PROFIT....   

Need to get me one   

Rgds


User currently offlineghifty From United States of America, joined Jul 2010, 891 posts, RR: 0
Reply 39, posted (2 years 6 months 1 week 2 days 1 hour ago) and read 9789 times:

Quoting moo (Reply 3):
You dont get compensation from Toyota when your car is recalled for a warranty replacement, do you? Same situation here.

In the US, whenever my Volvo sedan faced a warranty recall I was given a free rental car for the duration of the time it would take to right whatever was wrong. And a grace period in case I couldn't pick up the car on the day it was completed.

I don't own a Toyota, but I assume they'll also "compensate" you for the the issue.

I also assume that in the contract there are certain non-disclosed agreements concerning this sort of issue. Look at AI..



Fly Delta Jets
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 40, posted (2 years 6 months 1 week 2 days ago) and read 9428 times:

Repeat after me...an airliner is a (very expensive) capital asset. A car is...a car.

The warranties are not, at all, comparable except in the sense that they both use the word "warranty."

Tom.


User currently offlineflightsimer From United States of America, joined Aug 2009, 605 posts, RR: 1
Reply 41, posted (2 years 6 months 1 week 2 days ago) and read 9116 times:

Quoting moo (Reply 3):

Actually, you get a rental car or tempo replacement free of charge... at least we did with our warranty for my parents mini-van...

So yes you do.



Commercial Pilot- SEL, MEL, Instrument
User currently offlinekanban From United States of America, joined Jan 2008, 3856 posts, RR: 27
Reply 42, posted (2 years 6 months 1 week 1 day 23 hours ago) and read 8752 times:
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Quoting tdscanuck (Reply 40):
The warranties are not

Tom, we recognize that and nobody is suggesting A or B provide loaners...


User currently offlinePHXA340 From United States of America, joined Mar 2012, 900 posts, RR: 1
Reply 43, posted (2 years 6 months 1 week 1 day 23 hours ago) and read 8563 times:

Quoting astuteman (Reply 33):
For the 100 777's they operate, that figure will be 300 flights a year that don't get off the ground without having to be reorganised in some way.
Are we saying that Boeing and/or GE pay compensation every time this occurs?

I respect a ton of the things you say but ... you know this isn't a fair comparison. When a T7 goes tech in the EK fleet it is an isolated issue. The A380 had a temporary design flaw that grounded some of them. I get what you are trying to say but I think your comparing two issues that don't quite compare.


User currently offlineQuokkas From , joined Dec 1969, posts, RR:
Reply 44, posted (2 years 6 months 1 week 1 day 22 hours ago) and read 7797 times:

Quoting astuteman (Reply 33):
that's 75 flights a year that "don't go", and should therefore "demand such "compensation".

Aircraft go "tech" all the time. In fact in any industry plant and equipment need to be maintained, have replacement parts, etc as part of normal wear and tear. But here we are talking about defects acknowledged by Airbus and not normal wear and tear so the issue of compensation arises.

As to the actual loss (whether loss of revenue or loss of profit) we are not privy to the data that EK has and of course the linked article quotes another news medium who quote... What Clark actually said is anybody's guess. What is clear is that not all A380 were grounded at the same - the article states at one time six were - but there may have been associated costs in needing to keep in service older aircraft that should have been retired. But we can all speculate as to the real figures.  
Quoting kanban (Reply 34):
An A.net myth that normal (most) people pay to fly a specific a/p model rather than just buying a ticket to get from point W to point Q...

While most passengers indeed may only care about getting from A to B, for EK's premium passengers there is a considerable loss of amenity involved in substituting a 777 (non-suite versions) or A332 for an A380. For passengers in J/ Y the difference is nowhere near as great but passengers booked on a flight expecting a private suite, a shower-spa and a bar and finding themselves in an old aircraft with 2-2-2 seating would have cause to complain. These are the passengers that EK has been offering compensation to. Of course that is not a loss of revenue so much as an expense that may affect overall profit level.


User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 45, posted (2 years 6 months 1 week 1 day 21 hours ago) and read 7681 times:
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Quoting PHXA340 (Reply 43):
I respect a ton of the things you say but ... you know this isn't a fair comparison.

Do I?
Sorry. But I'm not inclined to dismiss it out of hand.

Quoting PHXA340 (Reply 43):
When a T7 goes tech in the EK fleet it is an isolated issue

Which again, is my point. It happens without warning, it happens often, and has the airline scurrying about in a panic.
In this particular case, the airline has the ability to plan these events in well in advance.
If they can't incorporate them to some considerable degree in planned outages, then frankly, they shouldn't be running an airline MO

But if you're still not happy, how about..
How many times do airworthiness directives temporarily ground whole fleets or part fleets?
BA 777 crash at Heathrow?
Boeing 737 Rudders?
I'm sure there are loads of other examples were I prepared to do the trawl.

Do the OEM's compensate for the loss of earnings in every case?

The real point is, and it is the one Tom made earlier. Aircraft would be prohibitively expensive if this were actually the case.

As far as warranties go, it's entirely possible that most of EK's A380 fleet are no longer under warranty anyway. They received their first example 4 years ago. The truth is we don't know the details.

The other real point here is the validity of the alleged $30M/month drop in profits as a consequence..
But hey! I'm happy to leave that unchallenged.
So this plane for which I am told there is no market pays for itself every 2 years?...  

No wonder EK want 120 of them if the absence of a maximum of 6 of them has THAT impact on profitability.
Like I said - where do I get one?

Quoting Quokkas (Reply 44):
But here we are talking about defects acknowledged by Airbus and not normal wear and tear so the issue of compensation arises

See my comments above. Aircraft regularly get grounded by airworthiness directives resulting from acknowledged design flaws...
The real question remains.

Rgds


User currently offlinePHXA340 From United States of America, joined Mar 2012, 900 posts, RR: 1
Reply 46, posted (2 years 6 months 1 week 1 day 21 hours ago) and read 7589 times:

Quoting astuteman (Reply 45):
BA 777 crash at Heathrow?

You just proved my point. The BA 777 was an isolated issue. The A380 cracks have been found in multiple aircraft. I fully agree with you that Airbus' liability is probably nonexistent when it comes to reimbursing lost revenue, however I still don't think you can compare this effectively using your 777 example - two completely different things.

I stand corrected if upon further research , the 777 engine stall problem was found in more aircraft after the BA crash.


User currently offlineQuokkas From , joined Dec 1969, posts, RR:
Reply 47, posted (2 years 6 months 1 week 1 day 20 hours ago) and read 7023 times:

Quoting astuteman (Reply 45):
The real question remains.

As posted above (reply 13), it is my opinion that Airbus is not liable for loss of revenue and will not be providing payment for such. There, I think, we are in agreement.

Of course, in an interview with the press Clark may say, or be "quoted as saying", all sorts of things but that is a world away from a realistic claim and payment.


User currently offlineVictorTango From India, joined Jan 2005, 501 posts, RR: 0
Reply 48, posted (2 years 6 months 1 week 1 day 20 hours ago) and read 6979 times:

Quoting EK156 (Reply 10):
Well look at it this way. Many passengers who booked and paid to fly the A380 were downgraded to A330 or the old 777. I would imagine EK had to compensate alot of those passengers in one way or another who paid big bucks to the fly the A 380!!!

EK has a disclaimer on their website in the 'Services by flight' section. Can't provide a link here. You'd have to look up a particular flight. I did a search for EK001/14JUN/DXB-LHR.

This is what it says.
"Please note that products and services featured on this website may vary according to aircraft configuration. Aircraft type may also be subject to last minute changes due to operational requirements."

Perhaps this may not make it liable to compensate pax for aircraft switches.

An EK employee should be able to shed more light on this...


User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 49, posted (2 years 6 months 1 week 1 day 19 hours ago) and read 6749 times:
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Quoting PHXA340 (Reply 46):
You just proved my point. The BA 777 was an isolated issue

If proving that my example was a bad one floats your boat, despite the fact that the point being argued remains fundamentally valid (and you actually seem to agree with), please fill your boots.
It's nice to be right (so I'm told   )

Quoting Quokkas (Reply 47):
As posted above (reply 13), it is my opinion that Airbus is not liable for loss of revenue and will not be providing payment for such. There, I think, we are in agreement

I can't imagine that Airbus would have come out bluntly with the statement that they're not paying for lost revenue if they had a clear legal liability to do so.

As in all of these cases of course the "soundbyte" hides a less simple position.

It wouldn't surprise me if aircraft delivered within the last year, and thus "within warranty" could with some justification incur costs above the repair cost itself.
For reasons stated, I don't believe that $30M per month is relevant in that position. There would clearly be an onus on the operator to prove a real revenue/cost delta

Legalities notwithstanding, it's clear that given EK's circumstances and order book with Airbus, this situation DOES give them some leverage with Airbus.

Guess they'll use that to up the discount on the follow-up order for 30+ A350XWB-1000's that they're going to make at the end of the year...  

(Hey, and then the A350-1000 can be the next in a line of aircraft given away "free with every A380". Sweet  
Quoting Quokkas (Reply 47):
Of course, in an interview with the press Clark may say, or be "quoted as saying",

Funny isn't it. Nowhere in the article did Tim Clark even hint that he was looking to Airbus to cover these costs. you would have thought that he would, wouldn't you?
Strange how such a gentle breeze can be fanned by A-net posters into a veritable hurricane.
But Hey. That's why we're here.
Isn't it?  

Rgds


User currently offlineUALWN From Andorra, joined Jun 2009, 2973 posts, RR: 2
Reply 50, posted (2 years 6 months 1 week 1 day 19 hours ago) and read 6646 times:

Quoting PHXA340 (Reply 46):
The BA 777 was an isolated issue.
Quoting PHXA340 (Reply 46):
I stand corrected if upon further research , the 777 engine stall problem was found in more aircraft after the BA crash.

The BA 777 accident prompted an EASA-mandated urgent modification of all RR-powered 777s. Hence the comparison astuteman made.



AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/AB6/310/319/320/321/330/340/380
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 51, posted (2 years 6 months 1 week 1 day 15 hours ago) and read 5573 times:

Quoting kanban (Reply 42):
Tom, we recognize that and nobody is suggesting A or B provide loaners...

No, but they're suggesting Airbus compensate EK for lost revenue while their A380 is out of service, which is financially equivalent to a loaner. Automakers that include loaners as part of their warranty policy price that into the car (or price of the warranty, if it's an add-on). Aircraft OEM's don't price lost revenue compensation into airliner prices or warranties.

Tom.


User currently offlinemoose135 From United States of America, joined Oct 2004, 2401 posts, RR: 10
Reply 52, posted (2 years 6 months 1 week 1 day 15 hours ago) and read 5513 times:

Quoting ghifty (Reply 39):
In the US, whenever my Volvo sedan faced a warranty recall I was given a free rental car for the duration of the time it would take to right whatever was wrong.

But that isn't required by law - that's a service the dealer offered. The last time I was car shopping, talking with two dealers for the same manufacturer, and one offered service loaners, the other didn't.



KC-135 - Passing gas and taking names!
User currently offlinekatekebo From United States of America, joined Apr 2001, 706 posts, RR: 6
Reply 53, posted (2 years 6 months 1 week 1 day 12 hours ago) and read 5313 times:

Quoting moo (Reply 3):
Emirates.

You dont get compensation from Toyota when your car is recalled for a warranty replacement, do you? Same situation here.

Don't know about Fakland Islands, but here in US you usually get a free "loaner" car paid by Toyota / dealer if the repair is going to take more than one day. Not all car companies / dealer give you a free "loaner" car, but the better ones do.

In the corporate world in which I operate, if an important piece of equipment has a problem that will result in an extended downtime, the manufacturer will do the utmost to minimize the impact to our business, usually providing replacement equipment on temporary basis. Direct financial compensation is rare (unless explicitly included in the contract), but providing replacement equipment is a common practice.

[Edited 2012-06-14 06:57:27]

User currently offlinePHXA340 From United States of America, joined Mar 2012, 900 posts, RR: 1
Reply 54, posted (2 years 6 months 1 week 1 day 11 hours ago) and read 5164 times:

Quoting UALWN (Reply 50):
The BA 777 accident prompted an EASA-mandated urgent modification of all RR-powered 777s. Hence the comparison astuteman made.

Yup , it being a RR problem , not a manufacturing problem by Boeing. The Airbus cracks is a manufacturing defect by Airbus.

Quoting astuteman (Reply 49):
If proving that my example was a bad one floats your boat, despite the fact that the point being argued remains fundamentally valid (and you actually seem to agree with), please fill your boots.
It's nice to be right (so I'm told )

I purchase an aircraft knowing it will have days I can't dispatch it due to maintenance issues. I purchase an aircraft under the assumption it will NOT have structural cracks. Two different things hence your point is still not valid in my opinion - agree to disagree.


User currently offlineUALWN From Andorra, joined Jun 2009, 2973 posts, RR: 2
Reply 55, posted (2 years 6 months 1 week 1 day 11 hours ago) and read 5066 times:

Quoting PHXA340 (Reply 54):
Yup , it being a RR problem

Did RR pay for lost revenue to all affected 777 operators?

Quoting PHXA340 (Reply 54):
I purchase an aircraft under the assumption it will NOT have structural cracks.

Actually, all aircraft develop cracks over time. Only not this quick.

You probably also purchase aircraft under the assumption that the fuel-oil heat-exchange mechanism will function properly and not clog due to ice crystals. When this is found to happen in a BA 777 accident, you modify the system, of course, and the airplane is down for repairs for some time.



AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/AB6/310/319/320/321/330/340/380
User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 56, posted (2 years 6 months 1 week 1 day 10 hours ago) and read 5026 times:
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Quoting PHXA340 (Reply 54):
Two different things hence your point is still not valid in my opinion - agree to disagree.

  
It might be me being a tad pedantic, but I'll reiterate that I think you're actually agreeing with my point whilst debating whether the example used was a particularly good one to support it - as evidenced by..

Quoting PHXA340 (Reply 46):
I fully agree with you that Airbus' liability is probably nonexistent when it comes to reimbursing lost revenue, however I still don't think you can compare this effectively using your 777 example - two completely different things.

No matter. Whilst we circle round our repsective and/or separate points, the salient "point" is that Tim Clark clearly excluded claiming that Airbus would pay for his downtime, which would appear to strongly support their view that they ain't going to be - at least not in so many dollars anyway.

And that's the point really   

Rgds


User currently offlineEPA001 From Netherlands, joined Sep 2006, 4944 posts, RR: 40
Reply 57, posted (2 years 6 months 1 week 1 day 10 hours ago) and read 4961 times:
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Quoting astuteman (Reply 56):
And that's the point really  

Indeed it is.  

Too bad for EK in this case, and for all other affected customers, but that is just all in the game.

[Edited 2012-06-14 09:23:10]

User currently offlinegoosebayguy From United Kingdom, joined Sep 2009, 416 posts, RR: 0
Reply 58, posted (2 years 6 months 1 week 1 day 9 hours ago) and read 4867 times:

When making a claim for lost money you simply cannot claim for revenue. Revenue or turnover is the total amount of money that say a A380 earns in a month. What you have to do is remove the costs of that revenue. Fuel, wages, maint, landing fees etc. All you can claim for is the lost profit. I doubt $30m is profit. as we have discussed Airbus is not going to be lable for this but Emirates will have insurance that should be paying out as with any other business whose business is interrupted through say flooding, fire etc.

Its just all bluster.


User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 59, posted (2 years 6 months 1 week 1 day 8 hours ago) and read 4740 times:

Quoting goosebayguy (Reply 58):
All you can claim for is the lost profit.

I do not think there is a claim to be made. But IF there is, then it would not be on the lost profit. IF, again not the word if, there is any claim to be made it would be for fixed costs during the period the asset can't be used.

Frankly, as a business why would I be concerned about getting, say, 10 MUSD in compensation for lost revenue when I have 25 MUSD in fixed costs?


User currently offlinelightsaber From United States of America, joined Jan 2005, 13522 posts, RR: 100
Reply 60, posted (2 years 6 months 1 week 1 day 7 hours ago) and read 4673 times:
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Quoting moo (Reply 20):
I've *never* seen a car manufacturer give a rental car on a warranty recall - I've seen garages give them, if they have one spare at the time, but never have I seen a manufacturer actually arrange one.

BMW in Southern California used to require the dealer garage to supply a vehicle for warantee work. I had several warantee reparairs on my (now sold) BMW. Two of the three times, I had a free car to drive. Once... sorry, too many warantee repairs and I had to pay for a rental vehicle.

Quoting moo (Reply 20):
During my time at the aforementioned vehicle management company, the routine was to book a hire vehicle for the period the warranty repair was being carried out, and that hire vehicle cost was borne by the owner of the vehicle.

I was wondering if Airbus had to pay for the lease fees during downtime, this sounds like it isn't industry standard? (Note, I'm asking.)

Quoting astuteman (Reply 33):
Pretty impressive when we've been told no passengers will actually recognise they're flying on an A380 anyway

I've been amazed on how many non-aviation enthusiats go out of their way to fly on the A380. With EK, the 10-across A380 is much better (for comfort) than the 10-across 777... But I have seen many individuals or couples replan vacations to fly the plane.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 61, posted (2 years 6 months 1 week 1 day 4 hours ago) and read 4473 times:

Quoting PHXA340 (Reply 54):
I purchase an aircraft knowing it will have days I can't dispatch it due to maintenance issues. I purchase an aircraft under the assumption it will NOT have structural cracks.

If you purchased it under that assumption, you were misinformed. You may not have personally assumed structural cracks (or at least not this soon) but you absolutely should have assumed design defects that would be discovered after delivery.

Given that the A320 and 737 keep getting AD's after decades, assuming an A380 will have no design defects at delivery is simply naive.

Quoting lightsaber (Reply 60):
I was wondering if Airbus had to pay for the lease fees during downtime, this sounds like it isn't industry standard? (Note, I'm asking.)

Airbus should not have to pay that. If an airline bought an airplane the OEM wouldn't pay their loan payments...leasing is equivalent from the OEM's point of view. How an airline pays for their airplane (after the initial delivery payment) isn't the concern of the OEM.

Tom.


User currently offlinePHXA340 From United States of America, joined Mar 2012, 900 posts, RR: 1
Reply 62, posted (2 years 6 months 1 week 1 day 4 hours ago) and read 4443 times:

Quoting tdscanuck (Reply 61):
You may not have personally assumed structural cracks (or at least not this soon) but

Fair enough , I guess I am just having a problem with comparing these cracks to a routine maintanence matter that makes an aircraft go tech. But when you present it like that , it makes sense.


User currently offlinelightsaber From United States of America, joined Jan 2005, 13522 posts, RR: 100
Reply 63, posted (2 years 6 months 1 week 1 day 3 hours ago) and read 4334 times:
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Quoting tdscanuck (Reply 61):
Airbus should not have to pay that. If an airline bought an airplane the OEM wouldn't pay their loan payments...leasing is equivalent from the OEM's point of view. How an airline pays for their airplane (after the initial delivery payment) isn't the concern of the OEM.

Thank you. Why I go to a.net, to learn!   

Hey, I'm a technical person, not the money person, I just hear about the funds when things go south and my employer must pay.   

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlinePHXA340 From United States of America, joined Mar 2012, 900 posts, RR: 1
Reply 64, posted (2 years 6 months 1 week 1 day ago) and read 4184 times:

Lufthansa is considering asking for compensation ...

http://www.reuters.com/article/2012/...hansa-airbus-idUSL5E8HE4ZS20120614


User currently offlinelightsaber From United States of America, joined Jan 2005, 13522 posts, RR: 100
Reply 65, posted (2 years 6 months 1 week 21 hours ago) and read 4076 times:
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Quoting PHXA340 (Reply 64):
Lufthansa is considering asking for compensation ...

Man would it have been much more entertaining if AI had bought the A380...

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offline747classic From Netherlands, joined Aug 2009, 2220 posts, RR: 14
Reply 66, posted (2 years 6 months 1 week 16 hours ago) and read 3873 times:

Emirates Wing repair costs are escalating beyond $30 million /mnd.


- Emirates external auditors claim the actual effect is closer to $50 million per month.

- Emirates is the largest A380 operator with 21 aircraft in service. It will take delivery of another 23 by early 2014, but all these 44 aircraft still have the old wing design and need the final fix.

- At the moment six EK A380's are on the ground for temporally repairs.

- Emirates (Clark) says that while Airbus claims the temporally repairs could be done within 10 days, Emirates’ experience is different: its aircraft have been grounded for an average 35 days, and some of them required 42 days.

- Moreover, some of the aircraft that have been (temporally) repaired likely will have to undergo the same process again after completing 500 additional cycles.

- Airbus and Emirates have meanwhile mapped out a plan for the permanent fix that will return its A380s to the original life cycle expectation. The program will start in the third week of January 2013 and end in November 2014.

- The carrier will have four A380s taken out of service at any given time.

See : http://www.aviationweek.com/Article...._13_2012_p03-01-467082.xml&p=1



Operating a twin over the ocean, you're always one engine failure from a total emergency.
User currently offlineSEPilot From United States of America, joined Dec 2006, 7121 posts, RR: 46
Reply 67, posted (2 years 6 months 1 week 9 hours ago) and read 3523 times:

Quoting astuteman (Reply 45):
where do I get one?

The address is Toulouse, France. The person to talk to is a guy by the name of John Leahy. I'm sure he'd be delighted to take your $200,000,000 or thereabouts. 

As to the issue of liability, in the world of general aviation AD's get issued all the time for aircraft of all ages. Unless it is still under warranty the cost of implementing them falls almost always on the aircraft owner. The only cases I know of where the manufacturer picks up the cost is where FAA mandated procedures were not followed during the manufacturing, such as the Lycoming crankshaft issue that arose a few years ago. If the plane is still under warranty the manufacturer usually pays; but those planes represent a very, very small proportion of the fleet. 99% of the time the owner is on the hook. The world of airliners is quite different, I realize, but the ultimate legal responsibility for conforming with AD's still rests on the operator.



The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 68, posted (2 years 6 months 1 week 9 hours ago) and read 3519 times:
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Quoting SEPilot (Reply 67):
The address is Toulouse, France. The person to talk to is a guy by the name of John Leahy. I'm sure he'd be delighted to take your $200,000,000 or thereabouts

So long as I can borrow ALL of that for the 2 years it takes to make that much profit with it, I'll be laughing....  

Rgds


User currently offlineSEPilot From United States of America, joined Dec 2006, 7121 posts, RR: 46
Reply 69, posted (2 years 6 months 1 week 8 hours ago) and read 3485 times:

Quoting astuteman (Reply 68):
So long as I can borrow ALL of that for the 2 years it takes to make that much profit with it, I'll be laughing....

Do I get a commission for giving you the address?   



The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
User currently offlinetdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80
Reply 70, posted (2 years 6 months 1 week 8 hours ago) and read 3434 times:

Quoting PHXA340 (Reply 62):
I guess I am just having a problem with comparing these cracks to a routine maintanence matter that makes an aircraft go tech. But when you present it like that , it makes sense.

I agree with you that a design defect like the cracks is not the same as unplanned (but statistically expected) maintenance. I also agree that cracks this early is a surprising design defect. But nobody should be surprised that there are design defects in a newly delivered A380 (or any other aircraft, that wasn't a shot at Airbus). This just happens to be a rather large and public design defect...it's not the first, it probably won't be the last.

Tom.


User currently offlineastuteman From United Kingdom, joined Jan 2005, 10234 posts, RR: 97
Reply 71, posted (2 years 6 months 1 week 7 hours ago) and read 3359 times:
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Quoting SEPilot (Reply 69):
Do I get a commission for giving you the address?

Yeah. A half share   

Rgds


User currently offlinelightsaber From United States of America, joined Jan 2005, 13522 posts, RR: 100
Reply 72, posted (2 years 6 months 1 week 6 hours ago) and read 3277 times:
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Quoting 747classic (Reply 66):
- At the moment six EK A380's are on the ground for temporally repairs.

No wonder EK is squeeling. I though the number was 3 or 4.   That is effectively six fewer daily flights that EK can service. The A380s being delivered to EK this year will be for wing crack relief instead of growth!   

Quoting 747classic (Reply 66):
- Emirates (Clark) says that while Airbus claims the temporally repairs could be done within 10 days, Emirates’ experience is different: its aircraft have been grounded for an average 35 days, and some of them required 42 days.

I SWAG'd the number would be closer to 21 days. So hence why my estimate of grounded A380s was off. Who would predict 35 to 42 days?   

Ok, in other threads there was discussion of LH cutting the repair time. Does anyone know how much time LH is quoting?

Quoting 747classic (Reply 66):
- Moreover, some of the aircraft that have been (temporally) repaired likely will have to undergo the same process again after completing 500 additional cycles.

Ouch... Time to maximize A380 use to JFK, SYD/MEL, and other 'far away' destinations.

Quoting astuteman (Reply 45):
The other real point here is the validity of the alleged $30M/month drop in profits as a consequence..
But hey! I'm happy to leave that unchallenged.
So this plane for which I am told there is no market pays for itself every 2 years?...

That is an implication. 6 planes out of service are costing EK $30M/month or $5M/month per airframe? Wow.... My math says it will pay for itself very 3 to 4 years though.  

Now that the initial crisis has passed, EK can plan (as you noted Astuteman). Thus, even with their current issues, EK should top off their A380 order!   

This is also before the new high MTOW/wingtwist/PIP A388s due out next year. For certain EK routes (LAX, IAH/DFW, GRU, and one could argue YYZ, SYD/MEL, JFK, and others) it will allow EK to upgauge to far more profit! Then we can talke new routes (e.g., MIA, MEX?) that are likely to be profitable with an A380 but not a 77W. (Perhaps launch 3X/week instead of a daily?)

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineSEPilot From United States of America, joined Dec 2006, 7121 posts, RR: 46
Reply 73, posted (2 years 6 months 1 week 6 hours ago) and read 3221 times:

Quoting astuteman (Reply 71):
Quoting SEPilot (Reply 69):
Do I get a commission for giving you the address?

Yeah. A half share

Well, that should take care of both of our retirements...   



The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
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