Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Is The A350-1000 Taking Orders From A380?  
User currently offlinejayunited From United States of America, joined Jan 2013, 884 posts, RR: 1
Posted (1 year 1 month 4 weeks 7 hours ago) and read 14043 times:

http://www.aviationweek.com/Article....l/AW_05_20_2013_p38-578739.xml&p=1

This article in Aviation Week seems to suggest that as the A350 gets closer to first flight a few more airlines are taking notice and perhaps we could see a few more orders for the A350 in the coming mouth. The article also mentions that Airbus is now seeing some interest from airlines in the A350-1000 variant and that that interest could be taking potential sales from the A380. Although no decision has been made according to this article Airbus is mulling a cut in A380 production because they are seeing a lot more interest from the airlines in the A350 than the A380.

First of all how much stock would you put in this article and secondly is the A350 both the 900 and 1000 variants taking orders that could potentially go to A380 program? And lastly could the A350 program do to the A380 what the 777 did to the 747?

87 replies: All unread, showing first 25:
 
User currently offlinePlymSpotter From Spain, joined Jun 2004, 11611 posts, RR: 60
Reply 1, posted (1 year 1 month 4 weeks 7 hours ago) and read 14040 times:

Quoting jayunited (Thread starter):
First of all how much stock would you put in this article and secondly is the A350 both the 900 and 1000 variants taking orders that could potentially go to A380 program?

I would place very little faith in it. In a typical three class config the A388 offers 150-200 seats more than the A351. Two completely different markets IMO.


Dan  



...love is just a camouflage for what resembles rage again...
User currently offlineProst From United States of America, joined Oct 2012, 908 posts, RR: 1
Reply 2, posted (1 year 1 month 4 weeks 7 hours ago) and read 13984 times:

Two different markets, agreed. However, the smaller sized market has a greater demand than the larger sized market.

User currently offlineqf002 From Australia, joined Jul 2011, 2948 posts, RR: 2
Reply 3, posted (1 year 1 month 4 weeks 7 hours ago) and read 13891 times:

I guess one could argue that the economy means that the A350 is eating into orders that Airbus would have originally hoped would go to the A380, but I don't see that a being a negative thing. If those orders didn't go to the A350 then they'd be going to the 777.

User currently offlineStitch From United States of America, joined Jul 2005, 30548 posts, RR: 84
Reply 4, posted (1 year 1 month 4 weeks 6 hours ago) and read 13839 times:
Support Airliners.net - become a First Class Member!

In that some airlines have been choosing the 777-300ER to replace their 747-400s (in whole or in part) instead of the A380-800, those airlines (or new airlines) moving to the A350-1000 instead of the 777-300ER...

But in either scenario, the A380-800 was out of the running so as qf002 notes, Airbus securing that order with an A350-1000 vs. Boeing with a 777-300ER would still benefit Airbus.


User currently onlineRickNRoll From Afghanistan, joined Jan 2012, 780 posts, RR: 0
Reply 5, posted (1 year 1 month 4 weeks 6 hours ago) and read 13731 times:

Quoting Prost (Reply 2):
Two different markets, agreed. However, the smaller sized market has a greater demand than the larger sized market.

As it always has.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 6, posted (1 year 1 month 4 weeks 5 hours ago) and read 13596 times:

Quoting jayunited (Thread starter):
And lastly could the A350 program do to the A380 what the 777 did to the 747?

There's not much doubt that both the A380 and the B748 are having increasing trouble securing orders, and probably production of both types will have to be phased out within a very few years, jayunited. This press story shows that both the 'big fours' are in trouble orders-wise:-

"Airbus brought in only four new orders for the A380 last year, compared with a target of 30, and the company hasn’t booked a purchase for the airliner this year, on a goal of 25 contracts. The company has cut back output plans as it works through changing the wing structure, eating into sales growth that EADS reiterated will be “modest” in 2013.

.....................

"Boeing Co. (BA) said last month it is cutting the production rate of its 747-8 model to 1.75 planes a month from two, citing dwindling demand."


http://www.bloomberg.com/news/2013-0...rs-for-delivery-slots-in-2015.html

It's just 'evolution,' really. Led by the B777, the 'big twin' with ETOPS capability has finally 'arrived.'



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently onlinejustloveplanes From United States of America, joined Jul 2004, 1036 posts, RR: 1
Reply 7, posted (1 year 1 month 4 weeks 1 hour ago) and read 13148 times:

Quoting jayunited (Thread starter):
And lastly could the A350 program do to the A380 what the 777 did to the 747?

Probably not as bad as the 77W is pretty close to the 748 in capacity, wheras a significant gap for the 3510 and 380.

Still, big 4's have risk and operational challenges that are magnified relative to the new big twins.

I think in two years we'll know pretty much for sure.


User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 8, posted (1 year 1 month 4 weeks 1 hour ago) and read 13070 times:
Support Airliners.net - become a First Class Member!

Quoting jayunited (Thread starter):
First of all how much stock would you put in this article

Firstly, we've already done this interview with Harald Wilhelm to death on this thread

Not Enough Customers For A380 (by katekebo May 14 2013 in Civil Aviation)

just over a week ago, although the OP article in this case was from Bloomberg.

Nowhere in the article is there any comment from Airbus that even hints at a production cut.

Quoting NAV20 (Reply 6):
Airbus brought in only four new orders for the A380 last year,

It was nine actually

Quoting justloveplanes (Reply 7):
I think in two years we'll know pretty much for sure.

Correct

Rgds


User currently onlineRickNRoll From Afghanistan, joined Jan 2012, 780 posts, RR: 0
Reply 9, posted (1 year 1 month 4 weeks 1 hour ago) and read 12930 times:

I suppose we could think of the A380 as two twins stuck on top of each other, needing half the number of pilots. When you look at the airports where they work, the A380 seems to be quite at home. Where are all the slots for the phenomonenal number of smaller twins going to come from?

User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 10, posted (1 year 1 month 4 weeks 1 hour ago) and read 12891 times:

http://leehamnews.wordpress.com/ 5/24/2013

Tim Clark from Emirates states in this interview very clearly that Emirates will buy more A380 and replace old A380 with new A380 from 2020.
So I would wait before declaring the A380 dead.


User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3390 posts, RR: 4
Reply 11, posted (1 year 1 month 4 weeks ago) and read 12684 times:

Quoting mjoelnir (Reply 10):
Tim Clark from Emirates states in this interview very clearly that Emirates will buy more A380 and replace old A380 with new A380 from 2020.
So I would wait before declaring the A380 dead.

I would suggest at this point in time a used A380 will displace a new order. That is unless the resale value is little above scrap price. Why? You are not going to save much compared to just buying new and having that 10years more lifetime on the frame *AND* all the improvements since these used frames were built. Which means the total cost of ownership is going to be better for the new frame unless the used price is quite low.


User currently offlinescbriml From United Kingdom, joined Jul 2003, 12380 posts, RR: 47
Reply 12, posted (1 year 1 month 3 weeks 6 days 23 hours ago) and read 12536 times:
Support Airliners.net - become a First Class Member!

Quoting XT6Wagon (Reply 11):
I would suggest at this point in time a used A380 will displace a new order.

I don't really see it - a new 2020 A380 will be significantly better than an early one that EK has flogged for 12 years. Having a customer roll over their (expected) fleet of 130 A380s is hardly bad news for Airbus, is it?



Time flies like an arrow, but fruit flies like a banana!
User currently offlineJerseyFlyer From United Kingdom, joined May 2007, 634 posts, RR: 0
Reply 13, posted (1 year 1 month 3 weeks 6 days 21 hours ago) and read 11768 times:

Most airlines ordering A3510 have already ordered A380.

User currently offlineAither From South Korea, joined Oct 2004, 858 posts, RR: 0
Reply 14, posted (1 year 1 month 3 weeks 6 days 21 hours ago) and read 11667 times:

The past few years new world carriers have captured large market shares against big carriers. Maybe it's a transition period with the biggest carriers therefore not growing, and many new world carriers not yet being big enough yet to operate aircraft the size of the A380.
The maximum impact of this transition period certainly belongs to the past, there are now too many competitors losing money. It's getting too difficult now for new entrants to be successful and gain market shares. So growth should from now be shared entirely by the existing carriers.

[Edited 2013-05-27 05:00:17]


Never trust the obvious
User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 15, posted (1 year 1 month 3 weeks 6 days 20 hours ago) and read 11460 times:

Quoting XT6Wagon (Reply 11):
Quoting mjoelnir (Reply 10):
Tim Clark from Emirates states in this interview very clearly that Emirates will buy more A380 and replace old A380 with new A380 from 2020.
So I would wait before declaring the A380 dead.

I would suggest at this point in time a used A380 will displace a new order. That is unless the resale value is little above scrap price. Why? You are not going to save much compared to just buying new and having that 10years more lifetime on the frame *AND* all the improvements since these used frames were built. Which means the total cost of ownership is going to be better for the new frame unless the used price is quite low.


I am just tiered of the talk about the A380 dying. It does not really matter what will happen to the used birds of EK. They fly their aircraft a certain time and than they are renewed. As they do not own those planes, but lease them, the price of used 12 year old planes has little influence on there calculation.

If the old A380 from EK will be a problem to the used market why than should all the at the same time retired B777 not be a problem for that used market?

It seems to me that the same people talking about the big possibilities of the B 777-X9 have to realize that in the regards to Emirates the A 330, later the 350, is the small frame, the B 777 the medium and the A380 the big frame.

It is strange this one set of arguments for the A380 and than a different set of arguments for the B 777-XX.
If you do not believe Emirates to buy A380 in the future, you should stop believing them buying the B777-XX, if smaller is better they would end with A350 only.


User currently offlinePM From Germany, joined Feb 2005, 6865 posts, RR: 63
Reply 16, posted (1 year 1 month 3 weeks 6 days 20 hours ago) and read 11304 times:

Quoting JerseyFlyer (Reply 13):
Most airlines ordering A3510 have already ordered A380.

   

I'm not sure it's much of a statistical base to go on.

Asiana   
British Airways   
Cathay Pacific   
Emirates   
Etihad   
Qatar   

And that's it so far - six airlines.

Still, you're correct as far as it goes.


User currently offlineEK413 From Australia, joined Nov 2003, 4854 posts, RR: 4
Reply 17, posted (1 year 1 month 3 weeks 6 days 20 hours ago) and read 11253 times:

Quoting Prost (Reply 2):

Two different markets, agreed. However, the smaller sized market has a greater demand than the larger sized market.

Agreed but qf002 has a valid point. Airbus have both bases covered.

Quoting qf002 (Reply 3):

I guess one could argue that the economy means that the A350 is eating into orders that Airbus would have originally hoped would go to the A380, but I don't see that a being a negative thing. If those orders didn't go to the A350 then they'd be going to the 777.


        

EK413



Good evening, ladies and gentlemen. We are tonight’s entertainment!
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 18, posted (1 year 1 month 3 weeks 6 days 20 hours ago) and read 11082 times:

Quoting astuteman (Reply 8):
Quoting NAV20 (Reply 6):Airbus brought in only four new orders for the A380 last year,
It was nine actually

Misunderstanding, I think, astuteman - it wasn't me saying that, I was quoting a Bloomberg press story?

And the story also said, "...and the company hasn’t booked a purchase for the airliner this year, on a goal of 25 contracts."

Only too possible that Bloomberg got it wrong. But, if so, please post evidence for the 'nine new orders' last year, and for any orders received this year?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 19, posted (1 year 1 month 3 weeks 6 days 20 hours ago) and read 10962 times:

Quoting NAV20 (Reply 18):
But, if so, please post evidence for the 'nine new orders' last year

Just check the Airbus Orders Excel sheet, it's all in there.

> Transaero: 4
> Singapore Airlines: 5

Quoting NAV20 (Reply 18):
I was quoting a Bloomberg press story?

It's always good to check the facts before quoting the media; the media has it often wrong.

[Edited 2013-05-27 05:50:48]


Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 20, posted (1 year 1 month 3 weeks 6 days 20 hours ago) and read 10856 times:

Quoting mjoelnir (Reply 15):
I am just tiered of the talk about the A380 dying.
I also feel like any talking of the A380 ceasing to be produced is premature. However, I have not been reading too many people speculating that it will happen. Not sure what comment you are responding to. Maybe people are speculating that production will slow. There is clearly demand for at least 2/month for a number of years to come.

[quote=mjoelnir,reply=15]It does not really matter what will happen to the used birds of EK. They fly their aircraft a certain time and than they are renewed. As they do not own those planes, but lease them, the price of used 12 year old planes has little influence on there calculation.

It absolutely does matter and it matters for the reason you have. EK likes to lease their birds and lease rates will go way up if resale values are low, which changes the dynamics of the new purchase decision. Which means less new aircraft are purchased. Look at Ryan Air dumping 737s as an example.

Quoting mjoelnir (Reply 15):
If the old A380 from EK will be a problem to the used market why than should all the at the same time retired B777 not be a problem for that used market?

I think you are comparing two dissimilar situations. If you compare the A380 situation with the B747 that will be closer (still not the same) situation. The 777 has 65 operators of 1400 frames while the 380 has 9 current operators. If you are trying to resell a used frame into a small market it is much more difficult then selling a frame into a used market. How many current A380 operators buy used aircraft? Also, as EK is the largest operator of A380 (40%+?) by definition, there are not a lot of other operators out there that will be anxious to bid for that many especially as most airlines will have their A380s for longer than 12 years and can get a new model in less than three years (currently) Do not get me wrong, they will definitely find a good home but the discount off of original list price will certainly be higher than that of a 777 which will effect new lease rates. I repeat: the A380 will be around for a long time. Great aircraft.

tortugamon


User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 21, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10742 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 18):
Misunderstanding, I think, astuteman - it wasn't me saying that, I was quoting a Bloomberg press story?

No misunderstanding.
I'm perfectly aware from the last dreary thread on this interview that Bloomberg effed up.
If you'd have done your homework you'd have known that.

Quoting NAV20 (Reply 18):
Only too possible that Bloomberg got it wrong. But, if so, please post evidence for the 'nine new orders' last year,

Yes they did.

Me post the evidence? You're having a laugh.
All you've got to do is check the Airbus orders page.
It's all Bloomberg had to do, too

Quoting KarelXWB (Reply 19):
Just check the Airbus Orders Excel sheet, it's all in there.

> Transaero: 4
> Singapore Airlines: 5

Let him do his own homework. He's old enough

Rgds


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 22, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10679 times:

Fair enough, guys!  

Were Bloomberg also wrong about no orders so far this year - or is that bit true?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 23, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10455 times:

Quoting NAV20 (Reply 22):
or is that bit true?

That is correct, but it should be noted that Lufthansa got board approval last February to buy 2 more A380s (together with a bunch of A320 aircraft).



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinescbriml From United Kingdom, joined Jul 2003, 12380 posts, RR: 47
Reply 24, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10338 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 22):
Were Bloomberg also wrong about no orders so far this year - or is that bit true?

It is to this point of the year. However, LH has approved an additional two and I suspect that EK alone will comfortably beat Airbus's target for the year (but you'll probably have to wait until November for that one!)   



Time flies like an arrow, but fruit flies like a banana!
User currently offlineBurkhard From Germany, joined Nov 2006, 4384 posts, RR: 2
Reply 25, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10656 times:

I think the A350-1000 and the A380-800 are already wide enough apart that they serve different markets.

On the other hand, 7810,3510 and 779 will have economics that are already near to those of todays A388, so Airbus has to investigate carefully how to proceed with the A380 familiy, and when to bring the A389 powered with XWB engines - which again would have the 20% advantage the current A388 has over the 77W today.


User currently offlineN821NW From , joined Dec 1969, posts, RR:
Reply 26, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10639 times:

Quoting NAV20 (Reply 6):
and probably production of both types will have to be phased out within a very few years

First of all the Boeing B747-8i/F will be in production at-least until the USAF orders its Air Force One replacement as we know full well that the USAF will never order a Airbus plane or a twin-jet. Second of all I have problems imagining that Airbus will stop the Airbus A380 production any time soon, they invested simply to much money in the program to just kill it because of the current financial troubles, if CEO's where thinking like you are (AKA short term) no business would be successful...

Quoting mjoelnir (Reply 10):
So I would wait before declaring the A380 dead.
Quoting mjoelnir (Reply 15):
I am just tiered of the talk about the A380 dying.

You guys just know how die hard Boeing fans and Airbus/Airbus A380 haters love to say this nonsense...


User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 27, posted (1 year 1 month 3 weeks 6 days 19 hours ago) and read 10734 times:

Quoting NAV20 (Reply 22):
Fair enough, guys!  

Were Bloomberg also wrong about no orders so far this year - or is that bit true?

Lufthansa 2 frames on the 3/14/2013

http://www.airbus.com/presscentre/pr...s-go-ahead-for-major-airbus-order/

For how many orders during 2013 I would wait for the end of the year, at least one should wait to talk about no orders for the conclusion of the Paris airshow. We also have the Dubai airshow this year.


User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 28, posted (1 year 1 month 3 weeks 6 days 18 hours ago) and read 10670 times:

Quoting mjoelnir (Reply 27):
For how many orders during 2013 I would wait for the end of the year January 17, 2014

Fixed  



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 29, posted (1 year 1 month 3 weeks 6 days 18 hours ago) and read 10707 times:

Quoting KarelXWB (Reply 23):
That is correct

Thanks, KarelXWB. So, basically, we have Airbus getting next to no orders for the A380, and Boeing reporting 'dwindling demand' for the B748.

Doesn't that strongly suggest that the airlines are already largely going for long-range 'big twins' - the B777, the B789, and the A351 - instead of either 'big four'? Meaning that both the B748 and the A380 will eventually be out of business (except maybe for freighter versions)?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineqf002 From Australia, joined Jul 2011, 2948 posts, RR: 2
Reply 30, posted (1 year 1 month 3 weeks 6 days 18 hours ago) and read 10587 times:

Quoting mjoelnir (Reply 15):
If the old A380 from EK will be a problem to the used market why than should all the at the same time retired B777 not be a problem for that used market?

Because there is a far larger market for used 777s than used A380s. Used 777s will find homes at secondary carriers that could never even hope to fly a 500+ seat plane, while the established/major carriers who can make A380s work are likely to be the airlines retiring their old planes for new ones.

Airbus then has multiple reasons to be concerned. For starters, demand for OEM parts (which is where the manufacturers make the the bulk of their profit) drops because there are scrapped aircraft that can be cherry picked for cheaper parts.

I'm not denying that it's not an issue that the 777 (and the A330 for that matter) will face, it's just accentuated in the A380 because it's such a niche aircraft and because the global fleet is heavily dominated by one airline.


User currently offlineart From United Kingdom, joined Feb 2005, 3379 posts, RR: 0
Reply 31, posted (1 year 1 month 3 weeks 6 days 18 hours ago) and read 10365 times:

Quoting NAV20 (Reply 18):
And the story also said, "...and the company hasn’t booked a purchase for the airliner this year, on a goal of 25 contracts."
Quoting mjoelnir (Reply 27):
For how many orders during 2013 I would wait for the end of the year, at least one should wait to talk about no orders for the conclusion of the Paris airshow. We also have the Dubai airshow this year.

One or more orders at Le Bourget would not be a surprise to me. No orders at Le Bourget would. Remember the speculation over the "significant" customer JL referred to near the start of the year? Then there may be top ups, too.


User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 32, posted (1 year 1 month 3 weeks 6 days 17 hours ago) and read 9834 times:

Quoting qf002 (Reply 30):

But Emirates is the biggest owner of the B 777-300 the biggest of the B777 and we can not expect first line airlines, except perhaps Delta, to buy those frames when they are 12 years old.
Emirates owns one of 4.6 produced B777-300 and if it is not the same situation, than it is a similar one.
We can not expect second tier airlines to fill even a B777-300 all the year around, so they only buy when they get them cheap.
I also thing that regarding the leasing firms the resale value is overrated in these discussions. If you lease out some equipment for a few years, the residual value is a big factor you do not expect the lessee to pay the airplane.
When you go for leasing contracts of ten years or more the leased equipment is usually about paid up for the lessor, any residual value is butter on the bread.


User currently offlinefrmrcapcadet From United States of America, joined May 2008, 1710 posts, RR: 1
Reply 33, posted (1 year 1 month 3 weeks 6 days 17 hours ago) and read 9665 times:

Boeing and Airbus both need to figure out how to make a profit on fewer frames per month for the VLAs. And the airlines that need them may need to order a few frames a year more than the minimum of the new ones they absolutely need. No one was expecting the two big twins to get as much better as they are getting this fast. Midnight oil is likely burning already regarding these issues - A and B, suppliers, leasers, airlines using 4 holers.


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlinejayunited From United States of America, joined Jan 2013, 884 posts, RR: 1
Reply 34, posted (1 year 1 month 3 weeks 6 days 17 hours ago) and read 9429 times:

The article is kind of a 2 part article in that Airbus's CFO points out that they have a "single digit number" of slots available in 2015. If Airbus is to fill the remaining number of delivery slots they have left in 2015 when would an airline need to place their order, how long can a potential customer wait and still be able to take delivery of the aircraft on time in 2015?

From the comments I'm reading man of you seem to think that the CFO who is quoted in the article is (for lack of a better word) overreacting. But if we look at it long term from lets say 2017 on out does his concerns have merit. And while some have pointed out that the seating capacity of the A350-1000 is much lower than that of the A380 which in turn could shield if from the the fallout that the 747 experienced when the 77W came to market and while some have pointed out EK replacing their A380's with more A380's are those two factors enough to dismiss the concerns raised by the CFO of Airbus?

I'm NOT saying or suggesting that the A380 program will be killed by the A350-1000 and the article is not suggesting that neither but do you believe that one airline EK (although other airlines have orders they will be the largest A380 operators) has the power to keep this program PROFITABLE after lets say 2017-2018 onward? Because I think that is what the CFO is looking at he is not looking at the short term he is looking at the long term and he want to keep this program profitable. So look at it over the long term and keep in mind that there have been a few articles out stating that Airbus could be looking to stretch the A350 again ( I don't know if that is purely rumor or if there is any substance to those rumors).


User currently offlinebrilondon From Canada, joined Aug 2005, 4116 posts, RR: 1
Reply 35, posted (1 year 1 month 3 weeks 6 days 15 hours ago) and read 8714 times:

Quoting N821NW (Reply 26):
First of all the Boeing B747-8i/F will be in production at-least until the USAF orders its Air Force One replacement as we know full well that the USAF will never order a Airbus plane or a twin-jet. Second of all I have problems imagining that Airbus will stop the Airbus A380 production any time soon, they invested simply to much money in the program to just kill it because of the current financial troubles, if CEO's where thinking like you are (AKA short term) no business would be successful...

The military will replace the 747 with whatever is available to fly the president or whomever is in need of transport for the government. Just a note, the 747 that president flies on is know as a VC-25 is only called Air Force One when the president flies on it.

To bring this back to topic, the A350 is not being ordered instead of the A380. If the airline would want to order the A380 than they would order it and not the A350. The article is bunk. Airlines do not have that short a sight, they realize that the present economic downturn is temporary and ordering an aircraft has longer term goals.



Rush for ever; Yankees all the way!!
User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 36, posted (1 year 1 month 3 weeks 6 days 15 hours ago) and read 8301 times:
Support Airliners.net - become a First Class Member!

Quoting tortugamon (Reply 20):
The 777 has 65 operators of 1400 frames while the 380 has 9 current operators. If you are trying to resell a used frame into a small market it is much more difficult then selling a frame into a used market

Oon the assumption that EK keeps its frames for 12 years the extent of the "used A380" problem is:-

2020 - 4 frames
2021 - 3 frames
2022/23 - 13 frames

That's 20 frames in the next 11 years, with the first not due for another 7 years
Who knows what the used market for VLA's will be like then?

If Emirates have to order replacements about 3 years in advance, then that's a whole 4 orders "at risk" in 2017, and 3 more in 2018

Using the whole of the 777 production run is also probably not very representative IMO.
More than half of those frames are already older than the very first A380 into service and many will have already changed hands.
Comparing the 777-300ER specifically with the A380 would be more appropriate IMO as they have a not dissimilar lifecycle.

It is right to raise the fact that every frame runs into the competition from its own used siblings.
And nobody questions the fact that there will be more homes for 777-300R's.
Which is just as well though.
Because there will be an awful lot more of them to place in the second-hand market.
Are we really in a position to know for certain already that overall, the 777-300ER "used frame" issue is any easier or more difficult than the A380's?   

Quoting jayunited (Reply 34):
do you believe that one airline EK (although other airlines have orders they will be the largest A380 operators) has the power to keep this program PROFITABLE after lets say 2017-2018 onward?

EK have currently 34% of the overall orders for the A380. As you say, they are way the largest operator
Do you think this percentage is going to increase over time or decrease?

They also currently have 25% of the overall orders for the 777-300ER. Again though, they are way the largest operator
Do you think this percentage is going to increase over time or decrease?

At what percentage does this skew to a single operator become an issue?

Not for the first time on A-net there seems to be a magic cut-off, just around the actual numbers for the A380, at which the boundary of "problem situation" becomes defined (a bit reminiscent of the wingspan and length issue)
Outside this number, everything appears to be just dandy - especially if we're talking Boeings.
Maybe that's just me

Rgds


User currently offlineEPA001 From Netherlands, joined Sep 2006, 4700 posts, RR: 38
Reply 37, posted (1 year 1 month 3 weeks 6 days 14 hours ago) and read 7969 times:
Support Airliners.net - become a First Class Member!

Quoting astuteman (Reply 36):
EK have currently 34% of the overall orders for the A380. As you say, they are way the largest operator
Do you think this percentage is going to increase over time or decrease?

Good question. I would like to see that number coming down.

Quoting astuteman (Reply 36):
They also currently have 25% of the overall orders for the 777-300ER. Again though, they are way the largest operator
Do you think this percentage is going to increase over time or decrease?

I think it will decrease, especially since a competitor is glooming at the horizon, though is still 4 years away.

Quoting astuteman (Reply 36):
At what percentage does this skew to a single operator become an issue?

A percentage is a good way to measure this. However, some strangely enough apply different percentages to different airplanes or airline manufacturers.   

Quoting astuteman (Reply 36):
Not for the first time on A-net there seems to be a magic cut-off, just around the actual numbers for the A380, at which the boundary of "problem situation" becomes defined (a bit reminiscent of the wingspan and length issue)

Outside this number, everything appears to be just dandy - especially if we're talking Boeings.
Maybe that's just me

No, it is not just you. I can easily see the skewed comparisons on A-net to which you are hinting.  .

Unfortunately the A380 (or sometimes Airbus for that matter) is still seen by some in such ways.  .


User currently offline7BOEING7 From United States of America, joined Oct 2012, 1500 posts, RR: 8
Reply 38, posted (1 year 1 month 3 weeks 6 days 14 hours ago) and read 7880 times:

Quoting astuteman (Reply 36):
EK have currently 34% of the overall orders for the A380. As you say, they are way the largest operator
Do you think this percentage is going to increase over time or decrease?

If EK orders another 30 this year that takes them to 41%.


User currently offlinemotorhussy From New Zealand, joined Mar 2000, 3133 posts, RR: 9
Reply 39, posted (1 year 1 month 3 weeks 6 days 14 hours ago) and read 7618 times:

Quoting NAV20 (Reply 29):
Meaning that both the B748 and the A380 will eventually be out of business (except maybe for freighter versions)?

Continued: global population growth; exponential increase in volume of people flying; congestion at major global airports; slot restriction at airport hubs like LHR, and; improvements in the A380's economics - all go to suggest that your assertion is wrong when it comes to the A380, however the 748 has been sacrificed by Boeing with the launch of the 77X.

Back to the question: the A35J ensures that Airbus has an economically superior option to the 77W when airlines are considering a smaller option than the A380 - or for that matter a larger option than the 77E, 77L, A333 - or 77W, A346 replacement.



come visit the south pacific
User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 40, posted (1 year 1 month 3 weeks 6 days 13 hours ago) and read 7343 times:

Quoting mjoelnir (Reply 15):
I am just tiered of the talk about the A380 dying. It does not really matter what will happen to the used birds of EK. They fly their aircraft a certain time and than they are renewed. As they do not own those planes, but lease them, the price of used 12 year old planes has little influence on there calculation.

It really does matter what will happen to the used birds of EK. In order for EK to replace those birds on a cost competitive basis there needs to be a market to off load the old planes at a reasonable price. And it doesn't matter if they own them or lease them because the economics of the decision effects them either way. If the use 380 market is depressed or non-existent then the lease rates will rapidly reflect that. Leasing companies are not known for giving out free money. The leasing company has to cover the full cost of the 380. If the price they can get for the used 380s is below the fractional cost then they are going to charge more for any leases of new 380s to reflect this cost increase. So it in effect shifts the costs of a 12 year 380 lease from a basis of ~50% of value to 60-70-80% of value. That in turn significantly increases the costs to EK and lowers the economic incentive to replace frames.

Quoting mjoelnir (Reply 15):
If the old A380 from EK will be a problem to the used market why than should all the at the same time retired B777 not be a problem for that used market?

The market for the B777 is many times larger than the market for the 380. There are both significantly more B777 in the market and almost an order of magnitude more operators of the 777. Both these contribute to a much more stable market for the 777 vs the 380. Its rather simple, who is going to buy used 380 frames? For the 777 there are a number of airlines every year that will do the cost benefit analysis and pick up decent used 777 frames with plenty of life left in them because they already operate the 777. For the 380, this market largely doesn't exist.

Quoting mjoelnir (Reply 32):
But Emirates is the biggest owner of the B 777-300 the biggest of the B777 and we can not expect first line airlines, except perhaps Delta, to buy those frames when they are 12 years old.
Emirates owns one of 4.6 produced B777-300 and if it is not the same situation, than it is a similar one.
We can not expect second tier airlines to fill even a B777-300 all the year around, so they only buy when they get them cheap.

Both the number of operators and number of 77W in the world is significantly larger than the numbers for the 380. Therefore there are many more possible and likely destinations for used 77W in the world than 380s.

Quoting mjoelnir (Reply 32):
I also thing that regarding the leasing firms the resale value is overrated in these discussions. If you lease out some equipment for a few years, the residual value is a big factor you do not expect the lessee to pay the airplane.
When you go for leasing contracts of ten years or more the leased equipment is usually about paid up for the lessor, any residual value is butter on the bread.

The resale and re-lease value are the only thing that matter to the leasing firms. It is what they basis their entire economic existence on. And leasing companies do expect original lessees to pay for residual value, it is fundamentally built into the initial equipment lease rates. Its why the lease rates for cars with higher demand and higher resale values have a lower lease rate margin.

If the 10-12 year 380 leasing contracts actually paid off the equipment then no one would actually sign the lease contracts. The whole point of leasing a plane vs buying it is to only pay an amount equal to the factional value of the plane you are using or plan to use. If your 50% fractional lifetime lease rates covers full cost + interest for the underlying product completely then you would be making a rather bad economic decision. Esp when you can get a much lower marginal rate for a secured debt contract than you can get for a lease contract. The only time when you would enter into a full cost+interest lease contract is when you lack the money or the access to money via a debt contract to buy or when you want to raise money or access to money.


User currently offlineStitch From United States of America, joined Jul 2005, 30548 posts, RR: 84
Reply 41, posted (1 year 1 month 3 weeks 6 days 13 hours ago) and read 6916 times:
Support Airliners.net - become a First Class Member!

Quoting spink (Reply 40):
If the 10-12 year 380 leasing contracts actually paid off the equipment then no one would actually sign the lease contracts....The only time when you would enter into a full cost+interest lease contract is when you lack the money or the access to money via a debt contract to buy or when you want to raise money or access to money.
SQ and EK are two customers who appear to operate this way.

Doric Nimrod Capital, which has bought a number of A380s from customers like SQ, LH and EK, leases them back to those carriers with a time period and monthly rent that covers the original capital cost of the purchase.

Per financial reports, Singapore Airlines / Airbus sold MSN 003 (9V-SKA), MSN 004 (9V-SKB) and MSN 005 (9V-SKC) to Doric for $198.6 million each. SQ then leased them from Doric on a 10 year term and the monthly rent is $1.7 million. So Doric will be collecting $204 million in rents over the life of the contract.

Doric also paid $234 million for MSN 077, which is being leased to EK as A6-EDP on a 12-year term at a rental rate that will repay the loan to buy the plane in 10 years. To recover $234 million in 10 years would require a monthly rent of $1,950,000. Over the 12 year lease term, that would be a total collection of almost $281 million - $47 million more than the purchase price.

Of course, that assumes EK would pay cash for the delivery, which is unlikely. And by investing that cash, they are likely to generate a rate of return greater than the $47 million. So as you indicated towards the end of your post, airlines likely enter sale-and-leaseback contracts to conserve capital for other uses at an RoI greater than the additional costs leasing vs. buying entails.

[Edited 2013-05-27 12:55:31]

User currently onlineHeavierthanair From Switzerland, joined Oct 2000, 786 posts, RR: 0
Reply 42, posted (1 year 1 month 3 weeks 6 days 12 hours ago) and read 6803 times:

G'day

Quoting mjoelnir (Reply 32):
But Emirates is the biggest owner of the B 777-300 the biggest of the B777 and we can not expect first line airlines, except perhaps Delta, to buy those frames when they are 12 years old.

With high fuel costs, crewing costs and in particular high maintenance costs for those aging planes I see a very limited market for these aircraft, be that B 773's, A 380's or B 748's. Smaller airlines will simply not be able to afford them, besides these aircraft are likely far too big for their needs anyhow. So who will be the takers? I doubt even for the likes of Delta used large widebodied aircraft will be attractive, even though with the few potential takers prices are likely to be VERY attractive. While capital costs may be low operating costs for small carriers will be prohibitive.

Long range low cost carriers may be potential takers, but we have yet to see one of those surviving. I am not trying to be pessimistic on this, but I see the used market for the big widebodies to be nonexistant, that market will be covered by the likes of the A330, B 787 and the smaller versions of the A 350.


Cheers

Peter



"Two things are infinite: the universe and human stupidity; and I'm not sure about the universe." (Albert Einstein, 1879
User currently offlinesunrisevalley From Canada, joined Jul 2004, 4858 posts, RR: 5
Reply 43, posted (1 year 1 month 3 weeks 6 days 12 hours ago) and read 6717 times:

[

Quoting motorhussy (Reply 39):
however the 748 has been sacrificed by Boeing with the launch of the 77X.

To use a rather mixed metaphor they appear to have pulled their head out of the sand and smelt the roses.  


User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 44, posted (1 year 1 month 3 weeks 6 days 12 hours ago) and read 6361 times:

Quoting Stitch (Reply 41):
SQ and EK are two customers who appear to operate this way.

Doric Nimrod Capital, which has bought a number of A380s from customers like SQ, LH and EK, leases them back to those carriers with a time period and monthly rent that covers the original capital cost of the purchase.

Per financial reports, Singapore Airlines / Airbus sold MSN 003 (9V-SKA), MSN 004 (9V-SKB) and MSN 005 (9V-SKC) to Doric for $198.6 million each. SQ then leased them from Doric on a 10 year term and the monthly rent is $1.7 million. So Doric will be collecting $204 million in rents over the life of the contract.

You have to take into account that these deals are at prices below the realistic discount rate for the actual frame as well.

And 200 mil at 3% for 10 years is ~270 mil total cost. i.e. the residual cost for DNC is still ~70 mil at end of contract.

Quoting Stitch (Reply 41):
Doric also paid $234 million for MSN 077, which is being leased to EK as A6-EDP on a 12-year term at a rental rate that will repay the loan to buy the plane in 10 years. To recover $234 million in 10 years would require a monthly rent of $1,950,000. Over the 12 year lease term, that would be a total collection of almost $281 million - $47 million more than the purchase price.

And the cost of 234 mil at 3% over 12 years is 334 mil or a residual of 53 million.

Quoting Stitch (Reply 41):
Of course, that assumes EK would pay cash for the delivery, which is unlikely. And by investing that cash, they are likely to generate a rate of return greater than the $47 million. So as you indicated towards the end of your post, airlines likely enter sale-and-leaseback contracts to conserve capital for other uses at an RoI greater than the additional costs leasing vs. buying entails.

The math works out for the leasing companies that the amount they make from the leasing contract + residual value is greater than the cost of capital. Since the cost of capital is almost always higher than the return on capital, they generate interest from people with money to fund their biz, by offering higher nominal returns than other options. The airline however ends up losing overall money. Some of this can be mitigated by the cost of borrowing for a large financial interest being lower than for a large non-financial interest. The net effect that it is unlikely that EK can get a better ROI on the open market than they will be losing with a sale-and-leaseback arrangement. It however does free up effective capital for expansion which is their goal. As expansion slows however, they are much better off buying than leasing.

The rub becomes if several leasing companies have trouble clearing their residual cost after the end of the leasing contract which will increase the initial leasing costs in the future and make the sale-and-leaseback option less attractive. So the question once again becomes, how much residual value is left in a 12 year old 380 frame that needs costly maintenance?


User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 45, posted (1 year 1 month 3 weeks 6 days 12 hours ago) and read 6331 times:

Quoting NAV20 (Reply 29):
Meaning that both the B748 and the A380 will eventually be out of business

Sorry mjoelnir, apparently there are people speculating that the A380 is going out of business. I was wondering why you were so quick to suggest it but now I see an instance. I stand corrected. NAV20, come on really? Eventually ok, but are you really speculating that the 748i and the A380 have a similar expected longevity?

Quoting mjoelnir (Reply 32):
We can not expect second tier airlines to fill even a B777-300 all the year around, so they only buy when they get them cheap.

Who do you call second tier: Eva Air (15 77W), AI (12), Jet, EgyptAir, PR, TAM, Aeroflot (All with at least 5)?

Quoting mjoelnir (Reply 32):
When you go for leasing contracts of ten years or more the leased equipment is usually about paid up for the lessor, any residual value is butter on the bread.

This is an incredibly inaccurate statement.

Quoting astuteman (Reply 36):
Who knows what the used market for VLA's will be like then?

Yes, very difficult to speculate on that. Lots of variables for sure. Especially for a new model.

Quoting astuteman (Reply 36):
3 more in 2018

Yes, all of the A380s will not be hitting the market at once. And leasing companies will be marketing the frame years before they are coming off lease as well. They will have a much better idea of the 'previously owned' market come 2015 and they will update their lease pricing as they are collecting more information.

Quoting astuteman (Reply 36):
Comparing the 777-300ER specifically with the A380 would be more appropriate IMO as they have a not dissimilar lifecycle.

True. So 30 customers with about 400 in operation and probably another 350 /- or so to go before the used market comes around and competes in full force. Please disregard my earlier figures. However, I speculate that a 77E operator would be much more willing to bring on a 77W then any other operator bringing on a new A380 so the 777 market is relevant to the discussion below.

Quoting astuteman (Reply 36):
Are we really in a position to know for certain already that overall, the 777-300ER "used frame" issue is any easier or more difficult than the A380's?

We do not ever know anything for certain this far in advance, so no. But the smart money says Yes. I will try to locate the information but I just read something on IBA/Ascend I believe that showed the lease rates for all frames by age of aircraft. The 77W was by far the highest retainer of its original lease values and it would follow then that it would better retain its resale value relative to list. Why else would GECAS, ALC, BOC, and ILFC be such large customers of the 77W (100) vs the A380 (0)? A used A380 will have a higher tendency to be sold to a new A380 customer which would require more discounts relative to list price than a product that could go to existing 77W/77L customers and to a lesser extent 77E operators.

Quoting astuteman (Reply 36):
At what percentage does this skew to a single operator become an issue?

I actually do not think its the single operator situation that is the issue. It has to do with the size of the market. It is easier if you are an airline with 5 trying to sell into a market with 150 than if you are an airline with 90 trying to sell into that same market. The guy with 90 cannot sell to himself! So that makes the market smaller which and makes it more difficult. All of EKs 90 will not go on the market at the same time and it will get more and more clear what they value is after every passing year. The smaller the market the higher the risk/beta, the higher the WACC the higher the lease rate and the lower the expected resale value relative to list price. Its not that 'its 40% so therefore its an issue' its 'there are only X customers and X already said no and therefore we have an issue'.

I am not saying that the 77W will not be hard to resell, just that the A380 will be hard relative to other airframes in general and it will become easier with every additional frame they sell (especially to a new customer). The 748 will be crazy hard and would have very high lease rates as a result probably with residual value guarantees. Good thing the lone operator has a penchant for buying these frames outright because the lease rates would be tremendous.

Quoting EPA001 (Reply 37):
I can easily see the skewed comparisons on A-net to which you are hinting.

I too hate the double standard. However, recently, I have become more disappointed at rereading the countless posts about this hypocrisy. The uniformed lead to the first problem, the well informed lead to the second. I have a higher expectation from the second group and I go out of my way to read what they have to say which makes it frustrating to know these members can offer so much value but choose instead to discuss a different type of rant. I am impressed with those that stay above the fray; a status, I recognize, I am not currently embracing myself    .

tortugamon


User currently offlinesunrisevalley From Canada, joined Jul 2004, 4858 posts, RR: 5
Reply 46, posted (1 year 1 month 3 weeks 6 days 12 hours ago) and read 6279 times:

Quoting sunrisevalley (Reply 43):
The math works out for the leasing companies that the amount they make from the leasing contract + residual value is greater than the cost of capital

In most jurisdictions they would get the benefit of the CCA which helps on an after tax basis.


User currently offlineStitch From United States of America, joined Jul 2005, 30548 posts, RR: 84
Reply 47, posted (1 year 1 month 3 weeks 6 days 12 hours ago) and read 6233 times:
Support Airliners.net - become a First Class Member!

Quoting spink (Reply 44):
So the question once again becomes, how much residual value is left in a 12 year old 380 frame that needs costly maintenance?

So far, the A380 seems to be very stable in terms of valuation. 9V-SKA has consistently had a projected value of $170 million since 2009 and a 2009 delivery is worth about the same now as it was at delivery (between $187-190 million).


User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 48, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 6110 times:

Quoting Stitch (Reply 47):
So far, the A380 seems to be very stable in terms of valuation. 9V-SKA has consistently had a projected value of $170 million since 2009 and a 2009 delivery is worth about the same now as it was at delivery (between $187-190 million).

Which unfortunately doesn't tell us anything about the value of a 12 year old frame in need of both a home and a long and costly and rare upgrade overhaul. And if the projected value has remained the same as the years have piled on, I would seriously question the projection in this case as we aren't talking about a product in high demand let alone high secondary demand. AKA, the projection is probably worth about as much as the paper it is printed on.


User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 49, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 6039 times:

Quoting spink (Reply 40):
It really does matter what will happen to the used birds of EK. In order for EK to replace those birds on a cost competitive basis there needs to be a market to off load the old planes at a reasonable price. And it doesn't matter if they own them or lease them because the economics of the decision effects them either way. If the use 380 market is depressed or non-existent then the lease rates will rapidly reflect that. Leasing companies are not known for giving out free money. The leasing company has to cover the full cost of the 380. If the price they can get for the used 380s is below the fractional cost then they are going to charge more for any leases of new 380s to reflect this cost increase. So it in effect shifts the costs of a 12 year 380 lease from a basis of ~50% of value to 60-70-80% of value. That in turn significantly increases the costs to EK and lowers the economic incentive to replace frames.

The biggest problem I currently see for second-hand A380s are the huge costs for cabin outfitting. Unless an airline is willing to accept the EK cabin, I don't see them spending a lot of money to re-configure the whole cabin.



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 50, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 5989 times:
Support Airliners.net - become a First Class Member!

Quoting tortugamon (Reply 45):
I am not saying that the 77W will not be hard to resell, just that the A380 will be hard relative to other airframes in general and it will become easier with every additional frame they sell (especially to a new customer).

Don't disagree with this to be honest, Tortugamon. Just a reminder perhaps that all frames have this issue - the A380 may just have it more than others.

Throwing in a curved ball, for the nth time admittedly, a few years ago, David Sutton VP of fleet procurement for FX speculated that there was a market for some 200 A380 freighters - most of which he believed would be made up of P2F conversions. Admittedly this was before the A380F was pulled by Airbus, but you never know.
For the right price......

Quoting tortugamon (Reply 45):
The 748 will be crazy hard and would have very high lease rates as a result probably with residual value guarantees.

As with the 772 though, won't a 748i be a relatively easy place to a 744 operator?
Not to mention that, if there's any chance of an A380 P2F, then there's almost guaranteed to be a 748i P2F - it would appear to be a no-brainer somewhere down the line

Rgds


User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 51, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 5919 times:

Quoting spink (Reply 40):

I think you are far of when you imagine that a 12 years leasing could be arranged paying only about 50% of the investment costs.
Even going to 70 or 80% would not be acceptable to a leasing company. I always would assume it to be between 90 and 100%.
The risk for the lessor would be far to high. It is very difficult to look that far into the future and calculate with such a high residual value. You can have sudden technical advances making equipment obsolete or a market situation after 12 years offering only bad resale possibilities.
I have not been involved in an aircraft leasing contract, but if have both leased industrial equipment and been involved in leasing contracts regarding for example ships and the aircraft industry, being at least as volatile, will not be that different.
The advantage for the lessee is, no need for capital and usually escape clauses to return the equipment if the going gets tough.


User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 52, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 5810 times:

Quoting NAV20 (Reply 29):
Doesn't that strongly suggest that the airlines are already largely going for long-range 'big twins' - the B777, the B789, and the A351 - instead of either 'big four'? Meaning that both the B748 and the A380 will eventually be out of business (except maybe for freighter versions)?

It's too soon to say that. There are a few things you should keep in mind:

1) If the economy grows and people go travel more, one will need bigger aircraft because you can't send unlimited 77W's into LHR (this is just an example but you get the point).

2) The 747 is having another problem, it's not only suffering sales from the current weak VLA market but also from its own weaker performance. The 747 has almost no CASM advantage over the 777 and comes with more expansive maintenance. Boeing will increase the airframe performance from next year with an engine upgrade and other small improvements, this might attract new customers. The A380 however has a real advantage on big trunk routes.

3) And than you have EK which will have to replace those 90 A380s at some point in time.

Both Airbus and Boeing expect the VLA market to re-attract next year, let's wait and see if they're right.

http://oi44.tinypic.com/9s9c38.jpg



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 53, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 5626 times:

Quoting mjoelnir (Reply 51):
I think you are far of when you imagine that a 12 years leasing could be arranged paying only about 50% of the investment costs.
Even going to 70 or 80% would not be acceptable to a leasing company. I always would assume it to be between 90 and 100%.
The risk for the lessor would be far to high. It is very difficult to look that far into the future and calculate with such a high residual value. You can have sudden technical advances making equipment obsolete or a market situation after 12 years offering only bad resale possibilities.
I have not been involved in an aircraft leasing contract, but if have both leased industrial equipment and been involved in leasing contracts regarding for example ships and the aircraft industry, being at least as volatile, will not be that different.
The advantage for the lessee is, no need for capital and usually escape clauses to return the equipment if the going gets tough.

Current lease rates (admittedly on discounted cost frames) are currently at 70-75% over ~12 years of full cost(price+interest). I used ~50% simply as a placeholder. More in demand planes with a better market understanding will be cheaper. For instance, maximal lease rates for short term leases of 738s are in the range of 80% extrapolated over 12 years, but with a 12 year contract are significantly less. Still above 50% but you could probably get a 12 year lease term at roughly 65% of frame cost as the residual value is much much higher. The market for something like a 738 is pretty stable and has a reasonably long runway going out well to 20 years or so.

Looking through the publicly available lease rates for planes, most work out to 65-80% of cost over a 12 year term. Remember that planes are generally 25-30 year goods will well known and documented use, service, and service schedule. Industrial equipment is much more variable in that regard.


User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 54, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 5601 times:

Quoting jayunited (Reply 34):
The article is kind of a 2 part article in that Airbus's CFO points out that they have a "single digit number" of slots available in 2015. If Airbus is to fill the remaining number of delivery slots they have left in 2015 when would an airline need to place their order, how long can a potential customer wait and still be able to take delivery of the aircraft on time in 2015?

9 months. Meaning Leahy has about 1.5 years left to sell those remaining 2015 slots.

[Edited 2013-05-27 14:49:44]


Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 55, posted (1 year 1 month 3 weeks 6 days 11 hours ago) and read 5551 times:

Quoting KarelXWB (Reply 52):
1) If the economy grows and people go travel more, one will need bigger aircraft because you can't send unlimited 77W's into LHR (this is just an example but you get the point).

But the real question is if that means up gauging large aircraft to ultra large or medium aircraft to large aircraft? The EK model is to upgrade from large to ultra large, but that as well has its limits and as new hubs open up, it decreases the advantages of it.

The other thing to consider, is that once the 380 loses its CASM advantage the only advantage it has is at slot restricted airports but it also carries significantly higher risk than say multiple 351s, 789/10s or 777x.


User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 56, posted (1 year 1 month 3 weeks 6 days 10 hours ago) and read 5423 times:

Quoting astuteman (Reply 50):
Just a reminder perhaps that all frames have this issue - the A380 may just have it more than others.

Yes all new frames have this issue. As a side note, I wonder if airlines can renegotiate their sale/lease back agreements as this data becomes more apparent to everyone involved. I suspect they do.

Quoting astuteman (Reply 50):
200 A380 freighters - most of which he believed would be made up of P2F conversions.

I have read you and others mention this before and it makes sense. Hopefully that is a long way off though as there is certainly a lot more value in a 12 year old frame as a passenger aircraft than as a freighter. Its good to know there is a floor though.

Quoting astuteman (Reply 50):
As with the 772 though, won't a 748i be a relatively easy place to a 744 operator?

Sure but its hard to find a 744 operator that is happy about it   . I did not mean to say that it was easy to place a 77W with a 77E operator. Maybe 'easier' because they have some of the relevant training/crew (more so the 77L obviously). I not know know the answer to your question though. I suspect the A380 would be easier to find a home for but I am just speculating as no one really knows.

tortugamon


User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 57, posted (1 year 1 month 3 weeks 6 days 10 hours ago) and read 5340 times:

Quoting spink (Reply 53):
Current lease rates (admittedly on discounted cost frames) are currently at 70-75% over ~12 years of full cost(price+interest). I used ~50% simply as a placeholder. More in demand planes with a better market understanding will be cheaper. For instance, maximal lease rates for short term leases of 738s are in the range of 80% extrapolated over 12 years, but with a 12 year contract are significantly less. Still above 50% but you could probably get a 12 year lease term at roughly 65% of frame cost as the residual value is much much higher. The market for something like a 738 is pretty stable and has a reasonably long runway going out well to 20 years or so.

Looking through the publicly available lease rates for planes, most work out to 65-80% of cost over a 12 year term. Remember that planes are generally 25-30 year goods will well known and documented use, service, and service schedule. Industrial equipment is much more variable in that regard.

You can only judge a leasing contract by the real investment cost and we all have difficulties to get the actually paid prices. It is completely useless to compare the leasing costs to list prices. You have to know what the lessor pays for the equipment to judge how big a part of the investment he gets in by the leasing rates over 12 years.

The lessee compares his discounted prices he buys the plane on and the capital cost if he pays cash with the leasing rate

To say that aircraft prices are less volatile than other industrial equipment is just a fib.


User currently offlineStitch From United States of America, joined Jul 2005, 30548 posts, RR: 84
Reply 58, posted (1 year 1 month 3 weeks 6 days 10 hours ago) and read 5300 times:
Support Airliners.net - become a First Class Member!

Quoting spink (Reply 48):
Which unfortunately doesn't tell us anything about the value of a 12 year old frame in need of both a home and a long and costly and rare upgrade overhaul.

The A380 conforms to MSG-3 standards (Maintenance Steering Group, 3rd edition) and as such, needs significantly less maintenance hours compared to older models (like the 747) that conform to earlier MSG standards. Air France are quoted in an Aviation Today article noting that a D-check for one of their 777s involves around 6000 maintenance hours as opposed to 35,000 for one of their 747s thanks to the 777 conforming to MSG-3.

So a 12-year old A380 going in for her Heavy Maintenance Visit may not be that great of a financial hardship.

(Airbus's Maintenance Review Board report for the A380 is available online. Perform a Google search for A380 MRB Report.)


User currently offlinebrilondon From Canada, joined Aug 2005, 4116 posts, RR: 1
Reply 59, posted (1 year 1 month 3 weeks 6 days 10 hours ago) and read 5252 times:

Quoting KarelXWB (Reply 52):

Quoting NAV20 (Reply 29):
Doesn't that strongly suggest that the airlines are already largely going for long-range 'big twins' - the B777, the B789, and the A351 - instead of either 'big four'? Meaning that both the B748 and the A380 will eventually be out of business (except maybe for freighter versions)?

It's too soon to say that. There are a few things you should keep in mind:

1) If the economy grows and people go travel more, one will need bigger aircraft because you can't send unlimited 77W's into LHR (this is just an example but you get the point).

2) The 747 is having another problem, it's not only suffering sales from the current weak VLA market but also from its own weaker performance. The 747 has almost no CASM advantage over the 777 and comes with more expansive maintenance. Boeing will increase the airframe performance from next year with an engine upgrade and other small improvements, this might attract new customers. The A380 however has a real advantage on big trunk routes.

3) And than you have EK which will have to replace those 90 A380s at some point in time.

Both Airbus and Boeing expect the VLA market to re-attract next year, let's wait and see if they're right.


This is an excellent analysis of the situation and I agree with everything that is said. You have to look at a longer range view of the market than the next 5 years. Aircraft purchases are always with an eye to the long term and thus are not made with the present economic situation but what projections are for the next decade or two and you can be sure based on historic models that there will be a recovery and growth in the next couple of years.



Rush for ever; Yankees all the way!!
User currently onlineRickNRoll From Afghanistan, joined Jan 2012, 780 posts, RR: 0
Reply 60, posted (1 year 1 month 3 weeks 6 days 9 hours ago) and read 5033 times:

Quoting spink (Reply 40):
The market for the B777 is many times larger than the market for the 380. There are both significantly more B777 in the market and almost an order of magnitude more operators of the 777. Both these contribute to a much more stable market for the 777 vs the 380. Its rather simple, who is going to buy used 380 frames? For the 777 there are a number of airlines every year that will do the cost benefit analysis and pick up decent used 777 frames with plenty of life left in them because they already operate the 777. For the 380, this market largely doesn't exist.

As someone has already pointed out, the larger the plane, the smaller the market for it. The 77W has proven to be a very good product hitting an important product range of capabilities. There seems to be an assumption that all 77W customers will just buy as many 777-9X as they have 77W. Many of them may just move to A350, which replaces the 77W, and buy a smaller number of 779-X, with the A380 taking up it's niche. The 748-i will be made completely redundant by the 779-X.


User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 61, posted (1 year 1 month 3 weeks 6 days 9 hours ago) and read 4754 times:

Quoting mjoelnir (Reply 57):
You can only judge a leasing contract by the real investment cost and we all have difficulties to get the actually paid prices. It is completely useless to compare the leasing costs to list prices. You have to know what the lessor pays for the equipment to judge how big a part of the investment he gets in by the leasing rates over 12 years.

The lessee compares his discounted prices he buys the plane on and the capital cost if he pays cash with the leasing rate

To say that aircraft prices are less volatile than other industrial equipment is just a fib.

The pricing data for the planes is the same as the leasing data and represents actual paid values, not list. Therefore the leasing and pricing data are comparable.

Used market equipment in the aircraft market is generally a much less volatile market due to extensive history and knowledge of use and wear patterns, coupled with detailed maintenance and service documentation. Industrial equipment on the used market has significantly less visibility into conditions than does the aircraft market. It is much easier to predict the remaining useful like on an airframe than it is say a forklift because the usage and conditions of the airframe is completely documented which leads to much less next buyer risk. Yes the general market can go up and down, but individual craft will be much more like any other individual craft than most industrial equipment.


User currently onlinemjoelnir From Iceland, joined Feb 2013, 1342 posts, RR: 2
Reply 62, posted (1 year 1 month 3 weeks 6 days 8 hours ago) and read 4675 times:

Quoting spink (Reply 61):
The pricing data for the planes is the same as the leasing data and represents actual paid values, not list. Therefore the leasing and pricing data are comparable.

Most of the data you are talking about is confidential, I jet have to see a real confirmed price either a lessor or airline is paying for a new airplane.

Quoting spink (Reply 61):
Used market equipment in the aircraft market is generally a much less volatile market due to extensive history and knowledge of use and wear patterns, coupled with detailed maintenance and service documentation. Industrial equipment on the used market has significantly less visibility into conditions than does the aircraft market. It is much easier to predict the remaining useful like on an airframe than it is say a forklift because the usage and conditions of the airframe is completely documented which leads to much less next buyer risk. Yes the general market can go up and down, but individual craft will be much more like any other individual craft than most industrial equipment.

That above does show me that you do not now a lot about general industrial leasing.


User currently offlinespink From United States of America, joined Aug 2005, 317 posts, RR: 1
Reply 63, posted (1 year 1 month 3 weeks 6 days 7 hours ago) and read 4307 times:

Quoting mjoelnir (Reply 62):
Most of the data you are talking about is confidential, I jet have to see a real confirmed price either a lessor or airline is paying for a new airplane.

The data I'm using is from IBA/ASCEND and has been posted to airliners.net for several years including this year quite recently. One would assume that IBA/Ascend have a pretty good idea of what the rates and values are esp considering that their data and analysis is heavy influential in setting actual prices.

And anybody who believes that the general industrial leasing market has more detailed and accurate data on maintenance and use than the aircraft leasing market, they don't understand the basic laws governing the commercial air transport industry.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 64, posted (1 year 1 month 3 weeks 6 days 6 hours ago) and read 4228 times:

Quoting tortugamon (Reply 45):
I stand corrected. NAV20, come on really? Eventually ok, but are you really speculating that the 748i and the A380 have a similar expected longevity?

I really don't see why suggesting that the jumbos will face a great deal of competition from the big twins that both firms are developing at top speed should be considered so 'out of line,' tortugamon? Boeing currently have only 60 orders in hand for the 748, mostly for the freighter version. Airbus have 101 outstanding orders for the A380, all passenger models (about 3 years' worth at the current production rate) but there appear to be next to no new ones coming in; and they themselves have said that they face having to reduce A380 production in 2015 unless more orders are forthcoming?

It stands to reason that the big twins (which one assumes will have lower operating costs, in terms of fuel and maintenance costs per passenger) will 'compete' with the existing model ranges both ways; upwards as well as downwards? I really don't see why predicting the possible effects of that is viewed as being so contentious?

Maybe, as some have suggested, there'll be a raft of A380 orders announced at the Paris Show. If there are I promise to shut up, at least for a while!  



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offline7BOEING7 From United States of America, joined Oct 2012, 1500 posts, RR: 8
Reply 65, posted (1 year 1 month 3 weeks 6 days 4 hours ago) and read 4128 times:

Quoting KarelXWB (Reply 52):
1) If the economy grows and people go travel more, one will need bigger aircraft because you can't send unlimited 77W's into LHR (this is just an example but you get the point).

Not everybody wants to go to LHR or one of the few other airports that are A380 capable and slot limited. Boeing bet on point to point with the 787 and now Airbus will use the same philosophy with the A350. The only hub that will see a large amount of A380 traffic will be in Dubai all the rest will only have a hand full of A380 flights a day.China is building high speed trains creating less need for A380's in country there.

Quoting NAV20 (Reply 64):
I really don't see why suggesting that the jumbos will face a great deal of competition from the big twins that both firms are developing at top speed should be considered so 'out of line,' tortugamon? Boeing currently have only 60 orders in hand for the 748, mostly for the freighter version. Airbus have 101 outstanding orders for the A380, all passenger models (about 3 years' worth at the current production rate) but there appear to be next to no new ones coming in; and they themselves have said that they face having to reduce A380 production in 2015 unless more orders are forthcoming?

It stands to reason that the big twins (which one assumes will have lower operating costs, in terms of fuel and maintenance costs per passenger) will 'compete' with the existing model ranges both ways; upwards as well as downwards? I really don't see why predicting the possible effects of that is viewed as being so contentious?

  


User currently offlineN14AZ From Germany, joined Feb 2007, 2687 posts, RR: 25
Reply 66, posted (1 year 1 month 3 weeks 6 days 3 hours ago) and read 4069 times:

@ NAV20, reply 64: your numbers are wrong. They delivered a little bit more than 100 aiframes and the backlog is something like 180 airframes.*)

BA has not even taken over their first unit and you are suggesting that they will be phased out in a few years?

*) right now I cannot find the exact numbers (sitting in a commuter train). Maybe someone else has the exact numbers - I think they are even in this thread

[Edited 2013-05-27 22:44:24]

User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 67, posted (1 year 1 month 3 weeks 6 days 3 hours ago) and read 4066 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 64):
really don't see why suggesting that the jumbos will face a great deal of competition from the big twins that both firms are developing at top speed should be considered so 'out of line,' tortugamon?

There's a "not-so-subtle" difference between "suggesting that the jumbos will face a great deal of competition from the big twins" and ....

Quoting NAV20 (Reply 6):
and probably production of both types will have to be phased out within a very few years

which I think most of us would consider "out of line"  
Quoting NAV20 (Reply 64):
Airbus have 101 outstanding orders for the A380, all passenger models (about 3 years' worth at the current production rate) but there appear to be next to no new ones coming in

Wrong way round. It's 101 DELIVERIES, leaving 161 frames in backlog, which is either 6 years or 5 years of production depending on whether you use 25 or 30 as the "current rate"
i.e. twice as long as you suggest.

Quoting NAV20 (Reply 64):
they themselves have said that they face having to reduce A380 production in 2015 unless more orders are forthcoming?

Show us the link where they have said that then, NAV.

They have absolutely said no such thing.   

Rgds


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 68, posted (1 year 1 month 3 weeks 6 days 3 hours ago) and read 4052 times:

Quoting N14AZ (Reply 66):
@ NAV20, reply 64: your numbers are wrong.

Yes, sorry mate, read the figures on Wiki backwards!

No doubt about Airbus' worries about maybe being short of orders in 2015, though? How does that happen, do they have very long delivery schedules for some customers or something?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlinescbriml From United Kingdom, joined Jul 2003, 12380 posts, RR: 47
Reply 69, posted (1 year 1 month 3 weeks 6 days 3 hours ago) and read 4058 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 64):
Airbus have 101 outstanding orders for the A380, all passenger models (about 3 years' worth at the current production rate)

No, they have 161 yet to be delivered. That's over five years of production if they settle at 30 per year.

Quoting NAV20 (Reply 64):
Maybe, as some have suggested, there'll be a raft of A380 orders announced at the Paris Show. If there are I promise to shut up, at least for a while!

It may not happen at Paris, but EK will add another year's worth of backlog this year.   



Time flies like an arrow, but fruit flies like a banana!
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 70, posted (1 year 1 month 3 weeks 6 days 3 hours ago) and read 4043 times:

Quoting astuteman (Reply 67):
Show us the link where they have said that then, NAV.

They have absolutely said no such thing.

Please see the second paragraph of the story linked to in the opening post, astuteman?



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 71, posted (1 year 1 month 3 weeks 6 days ago) and read 3839 times:

Quoting spink (Reply 55):
But the real question is if that means up gauging large aircraft to ultra large or medium aircraft to large aircraft? The EK model is to upgrade from large to ultra large, but that as well has its limits and as new hubs open up, it decreases the advantages of it.

Depends on your definition of medium sized aircraft. In a strong economy growth I can see A330 sized aircraft being upgraded to the A380. This is a big market with a lot of room for growth. I however don't see a good use case for domestic A380s yet. Why? Well CZ has already proven that the A380 will loose the airline money on domestic routes. I also understand that the problem might be related to their international cabin configuration, but I wonder if an 800-seater A380 would fix the problems on domestic routes. Going from a 150-seat 737 to an 800-seat A380 would not only require a strong economy growth, it would require a giant economy growth which is perhaps unrealistic to expect.

I agree about the limits of upgrading from large to ultra large, but those limits have not been reached yet.

Quoting spink (Reply 55):
The other thing to consider, is that once the 380 loses its CASM advantage the only advantage it has is at slot restricted airports but it also carries significantly higher risk than say multiple 351s, 789/10s or 777x.

But the A380 has a lot of room for improvements, if CASM becomes a problem Airbus could re-engine the A380 for example. Or stretch it. Or do both.



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlineKarelXWB From Netherlands, joined Jul 2012, 10667 posts, RR: 30
Reply 72, posted (1 year 1 month 3 weeks 6 days ago) and read 3791 times:

Quoting NAV20 (Reply 68):
Yes, sorry mate, read the figures on Wiki backwards!

No doubt about Airbus' worries about maybe being short of orders in 2015, though? How does that happen, do they have very long delivery schedules for some customers or something?

Airbus biggest concern at the moment is not the backlog (even if you cancel the Kingfisher slots there is 5 years of production left) but the open delivery slots in 2015. If Airbus cannot sell those slots they will have to decrease the production rate, meaning they will miss the break-even target. But this will not put the A380 out of production within a few years as you stated.

Big airplanes suffer sales in a weak economy. Just look at the "roller coaster" deliveries of the 747 here. According to both Boeing and Airbus, 2014 should be the turning point. So let's wait a bit longer before judging.



Only two things are infinite, the universe and human stupidity. And I'm not sure about the universe.
User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 73, posted (1 year 1 month 3 weeks 5 days 23 hours ago) and read 3626 times:

Quoting NAV20 (Reply 64):
I really don't see why suggesting that the jumbos will face a great deal of competition from the big twins that both firms are developing at top speed should be considered so 'out of line,

As others have mentioned, it was your comment suggesting that A380 will be phased out in a few years that I was having trouble agreeing to. Certainly the VLAs have to contend with the big twins but, IMHO, the A380 has ~160 orders and still fills a valuable role and is of the latest technology and will not be surpassed or replaced with these new aircraft. If this difficult time for the A380 extends beyond 4 or 5 years then we can start speculating on it shutting down. I just do not foresee that happening.

Lets not forget the 767 line still has not been 'phased out'.

Quoting NAV20 (Reply 64):
If there are I promise to shut up, at least for a while!

Sorry, NAV20, I should not have called you out. Keep your comments coming.

Quoting KarelXWB (Reply 72):
Just look at the "roller coaster" deliveries of the 747

I want to know how, in 1970, they delivered 92 frames after delivering 4 in their first year of production. Now that is a ramp up to be proud of! It looks like it took 42 years for the A330 to break that record for widebodies.

tortugamon


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 74, posted (1 year 1 month 3 weeks 5 days 22 hours ago) and read 3531 times:

Thanks for the friendly comments, guys, glad were back talking!

Quoting tortugamon (Reply 73):
As others have mentioned, it was your comment suggesting that A380 will be phased out in a few years that I was having trouble agreeing to.

That's probably the root of the earlier problem. At my (advanced) age - and considering that I spent a good proportion of my working life helping to put up buildings that took 5 years or more to plan and build - 5 or so years is indeed 'a few years' in my book! I wasn't suggesting that the A380 was going to get 'snuffed out' by Christmas 2013..........  

Airbus shouldn't be worrying about the A380 anyway. They HAVE to give priority to bringing out some sort of counter to the 789/10 and the up-graded 777 as soon as ever they can.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineBurkhard From Germany, joined Nov 2006, 4384 posts, RR: 2
Reply 75, posted (1 year 1 month 3 weeks 5 days 22 hours ago) and read 3497 times:

Quoting astuteman (Reply 50):
Not to mention that, if there's any chance of an A380 P2F, then there's almost guaranteed to be a 748i P2F - it would appear to be a no-brainer somewhere down the line

If LH remains the only larger costumor, they will fly them as long as they flew their 744s - and then the aircraft will have done their work and go the way of all aluminium.


User currently offlinescbriml From United Kingdom, joined Jul 2003, 12380 posts, RR: 47
Reply 76, posted (1 year 1 month 3 weeks 5 days 22 hours ago) and read 3439 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 74):
They HAVE to give priority to bringing out some sort of counter to the 789/10 and the up-graded 777 as soon as ever they can.

They are. It will fly shortly.



Time flies like an arrow, but fruit flies like a banana!
User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 77, posted (1 year 1 month 3 weeks 5 days 21 hours ago) and read 3437 times:
Support Airliners.net - become a First Class Member!

Quoting NAV20 (Reply 70):
Please see the second paragraph of the story linked to in the opening post, astuteman?

I have. Very carefully.
Aviationweek have said that Airbus are "mulling a production cut"
I still haven't seen, and don't see, anywhere where Airbus actually say they are "mulling a production cut"

Suggesting that they will not get 5 or 6 orders in the next 2 years, which is the scenario a production cut in this timeframe would be predicated on, seems a stretch too far IMO

Rgds


User currently offlineEPA001 From Netherlands, joined Sep 2006, 4700 posts, RR: 38
Reply 78, posted (1 year 1 month 3 weeks 5 days 20 hours ago) and read 3249 times:
Support Airliners.net - become a First Class Member!

Quoting 7BOEING7 (Reply 65):
Not everybody wants to go to LHR or one of the few other airports that are A380 capable and slot limited.

The A380 has already landed on more then 135 airports in the world. That is not a few in my book, that is at least at all major hubs and all secondary hubs in the world. See: http://www.airbus.com/aircraftfamili...eraircraft/a380family/a380-routes/

Quoting 7BOEING7 (Reply 65):
Boeing bet on point to point with the 787 and now Airbus will use the same philosophy with the A350.

Flying is always point to point. And with the A300, A310, A330, A340 and A380 and B747, B757, B767 and B777 both Airbus and Boeing have made and are making aircraft that do fly point to point over long(er) distances. I am not sure what exactly you are targeting at that Boeing bet on point to point with the B787 only?

Quoting astuteman (Reply 77):
Aviationweek have said that Airbus are "mulling a production cut"
I still haven't seen, and don't see, anywhere where Airbus actually say they are "mulling a production cut"

Me neither. The Paris Air Show may be a good indication whether or not new sales for the A380 will come in. Or maybe the Dubai Air Show. If they do, then there is not much to worry about, especially if the world economy will pick up more and more momentum. Though we are still a ling way off from pre-crisis growth numbers, then more orders for all airliners can be expected, including for the A380.  .

[Edited 2013-05-28 05:28:59]

User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 79, posted (1 year 1 month 3 weeks 5 days 19 hours ago) and read 3109 times:

Quoting EPA001 (Reply 78):
The A380 has already landed on more then 135 airports in the world.

'Landed' is different than commercial service. While I agree with the spirit of your statement that more airports are A380 compatible than most give it credit for (and I have made the same statement in another thread), the actual number of A380 airports with commercial service is about 30. Obviously there are more dynamics at play to consider than whether or not an aircraft can take off or land at an airport.

http://centreforaviation.com/analysi...-destinations-stage-lengths-110352

tortugamon


User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 80, posted (1 year 1 month 3 weeks 5 days 17 hours ago) and read 3010 times:
Support Airliners.net - become a First Class Member!

Quoting 7BOEING7 (Reply 65):
Not everybody wants to go to LHR or one of the few other airports that are A380 capable and slot limited

Fortunately nobody has ever been stupid enough to suggest that everyone should fly on A380's.
They've only ever been stupid enough to rebutt such a non-existent argument.

Nonetheless, the (growing number of) major airports that are slot constrained do have huge, and growing, numbers of people who do want to fly there, and usually at preferred times, on long-haul at least.

"timing", as opposed to "frequency" is a major driver in many cases.

Quoting tortugamon (Reply 79):
the actual number of A380 airports with commercial service is about 30.

Given that there are only 100 in service, this is no surprise.

We should re-visit this when there are 300 in service  

Rgds


User currently offline7BOEING7 From United States of America, joined Oct 2012, 1500 posts, RR: 8
Reply 81, posted (1 year 1 month 3 weeks 5 days 17 hours ago) and read 2970 times:

Quoting EPA001 (Reply 78):
Flying is always point to point. And with the A300, A310, A330, A340 and A380 and B747, B757, B767 and B777 both Airbus and Boeing have made and are making aircraft that do fly point to point over long(er) distances. I am not sure what exactly you are targeting at that Boeing bet on point to point with the B787 only?

Right now 32% of all the A380's are owned by one customer going "hub & spoke" out of one airport. Assuming they order another 30 this year that number could be as high as 41% by the time they take delivery of all of them. You can't tell me it's economically feasible to go 2/3 of the way around the world to get some place on a continuing basis or that everybody on these flights is only going to Dubai. "Point to point" in the future will be any flight not going through Dubai.

Quoting EPA001 (Reply 78):
The A380 has already landed on more then 135 airports in the world. That is not a few in my book, that is at least at all major hubs and all secondary hubs in the world.

I don't think EK will be starting service to Oshkosk anytime soon. How many of those 135 are actually capable of handling scheduled A380 service right now? And how many of those are slot limited?


User currently offlineart From United Kingdom, joined Feb 2005, 3379 posts, RR: 0
Reply 82, posted (1 year 1 month 3 weeks 5 days 17 hours ago) and read 2898 times:

Quoting spink (Reply 55):
The other thing to consider, is that once the 380 loses its CASM advantage the only advantage it has is at slot restricted airports but it also carries significantly higher risk than say multiple 351s, 789/10s or 777x.

Answered by KarelXWB, I think:

Quoting KarelXWB (Reply 71):
But the A380 has a lot of room for improvements, if CASM becomes a problem Airbus could re-engine the A380 for example. Or stretch it. Or do both.

I think that Airbus is in a position where if in their estimation the CASM of other aircraft is getting too close to that of the A380, they will simply implement the obvious A380 CASM improvements waiting to be had.

Quoting 7BOEING7 (Reply 65):
Not everybody wants to go to LHR or one of the few other airports that are A380 capable and slot limited. Boeing bet on point to point with the 787 and now Airbus will use the same philosophy with the A350. The only hub that will see a large amount of A380 traffic will be in Dubai all the rest will only have a hand full of A380 flights a day

When the 7X7 was launched, it was said by many that the days of the hub were numbered. IMO people will always want to fly from some hubs to other hubs (JFK-LHR or JFK-CDG for example). Additionally there is no point in having 4 big twin flights leaving within 2 hours on routes like CDG-SIN when you could do it more cheaply with 2 x A380's.

I don't think that the A350-1000 will take many orders from the A380. You would not fly the A380 on a route if the traffic only justified an A350-1000 sized aircraft.


User currently offlinefrmrcapcadet From United States of America, joined May 2008, 1710 posts, RR: 1
Reply 83, posted (1 year 1 month 3 weeks 5 days 16 hours ago) and read 2804 times:

The 380 is getting about 20 orders a year. I'm not sure how statistics work at these relatively low numbers, but I suspect that a downturn in 380 orders could not be established with less than 3 years of significantly lower numbers. If I had to bet I would stick with the 20. Which is not to say that Airbus is not worrying some.


Buffet: the airline business...has eaten up capital...like..no other (business)
User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 84, posted (1 year 1 month 3 weeks 5 days 16 hours ago) and read 2765 times:
Support Airliners.net - become a First Class Member!

Quoting 7BOEING7 (Reply 81):
Right now 32% of all the A380's are owned by one customer going "hub & spoke" out of one airport. Assuming they order another 30 this year that number could be as high as 41% by the time they take delivery of all of them

It will be 2018 or so before EK receive the last of their current orders
Which suggests it will be be 2020 or so before they would receive their 120th
Are you really suggesting that the A380 will receive no further orders between now and 2020?

Quoting 7BOEING7 (Reply 81):
How many of those 135 are actually capable of handling scheduled A380 service right now? And how many of those are slot limited?

some of them aren't slot limited, which makes a point usually missed on here.
Which is...

Quoting art (Reply 82):
Additionally there is no point in having 4 big twin flights leaving within 2 hours on routes like CDG-SIN when you could do it more cheaply with 2 x A380's.

On long haul, frequency is not the only determinant. There are unquestionably "waves" where a VLA is always going to be a viable alternative. Outside of the "waves", then no question, smaller widebodys like the 787 will be the only game.

It would be interesting to look at the stats for the worlds 10 (or 20, or 30) busiest hubs, and see whether passenger numbers have declined in the face of the emergence"point-to-point" or skyrocketed despite it.
I think I know what the answer will be.

Rgds


User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 85, posted (1 year 1 month 3 weeks 5 days 15 hours ago) and read 2730 times:

[quote=astuteman,reply=80]Given that there are only 100 in service, this is no surprise.
We should re-visit this when there are 300 in service

Indeed. However, the actual data is opposite from what you might think. Since late 2011 47 additional A380s were delivered and only 4 additional airports have been added to regular service. At that rate there will be less than 50 airports with A380 service after 300 are delivered. 22% of all routes are duplicated by an additional carrier. CDG, LHR, LAX, and HKG all have at least 5 different carriers operating A380s (interestingly none of the last three currently have a home carrier that operate one). When QR, EY, BA and other new customers take delivery do you see many additional airports being added with their 10-12 frames (other than DOH and AUH)?
http://centreforaviation.com/analysi...he-airbus-a380-will-fly-next-59245

Obviously this cannot continue as just EK should be responsible for adding more airports than that. I do not think more carriers will add too much to this number but as more and more are delivered to existing customers, more airports should open up. Should be interesting to follow.

tortugamon


User currently offlineastuteman From United Kingdom, joined Jan 2005, 9976 posts, RR: 96
Reply 86, posted (1 year 1 month 3 weeks 5 days 14 hours ago) and read 2572 times:
Support Airliners.net - become a First Class Member!

Quoting tortugamon (Reply 85):
Since late 2011 47 additional A380s were delivered and only 4 additional airports have been added to regular service

Although in the context of airport compatibility limiting the A380 I'm not sure what this tells us.
It might be that given the lack of deliveries, airlines are focussing their A380's on those "waves" I mentioned in their key destinations with the frames they have.
By the time later ones come, they may open up newer routes

Quoting tortugamon (Reply 85):
CDG, LHR, LAX, and HKG all have at least 5 different carriers operating A380s (interestingly none of the last three currently have a home carrier that operate one).

Which again, tells us that there isn't necessarily a direct correlation between the number of used airports and the number of frames.
some of these big hubs may end up seeing a LOT of A380's

IIRC LHR have planned for some 60 A380 movements a day at some stage.

Rgds


User currently offlinetortugamon From United States of America, joined Apr 2013, 3385 posts, RR: 10
Reply 87, posted (1 year 1 month 3 weeks 5 days 13 hours ago) and read 2490 times:

Quoting astuteman (Reply 86):
By the time later ones come, they may open up newer routes

Absolutely. IMO, it will be the carriers with more than 10-12 that will open up most of the new routes at this point.

Quoting astuteman (Reply 86):
IIRC LHR have planned for some 60 A380 movements a day at some stage.

Maybe at that point the folks in charge might say that Fokker 50s and similarly sized aircraft are no longer allowed to occupy slots.

tortugamon


Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Is The A350 A Casualty Of The A380 Delays? posted Wed Oct 4 2006 17:46:18 by NYC777
Tim Clark's Opinion On The A350-1000 posted Mon Jul 9 2012 12:29:25 by redrooster3
GE Engines For The A350-1000? posted Tue Nov 30 2010 04:34:10 by aviationweek
Who Is The Next Airline To Receive Their A380's? posted Thu Aug 21 2008 11:54:28 by Virginblue4
Etihad's Order Includes The A350-1000? posted Tue Jul 22 2008 17:45:53 by TriniA340
What Is The Longest Non-stop Flight From LHR? posted Sun Sep 30 2007 03:19:49 by UAL747
Is The A350 Too Big For Some Who've Ordered It? posted Sun Dec 17 2006 10:33:41 by Eureka
Is The A350 Just An A330 With A New Name? posted Fri Mar 10 2006 06:47:59 by Sonic67
What Is The Level Of O&D Traffic From MAD To: posted Sun Feb 27 2005 11:09:31 by Pe@rson
Is The A350 The A330 Replacement? posted Wed Feb 9 2005 23:56:21 by Gilesdavies