Lumberton
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"Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 10:29 pm

Interesting article I just saw online.

http://www.smh.com.au/news/business/...1/1123353442654.html?oneclick=true

Talks about a possible "carry over" to A350 orders.
"When all is said and done, more will be said than done".
 
Lumberton
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RE: "Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 10:46 pm

Sorry, but the link takes one to a subscription page. The article can be accessed easily from Google News. I'd cut and paste but there are copyright issues. It's well worth a look since it's rare to see such candor.
"When all is said and done, more will be said than done".
 
GBan
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RE: "Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 10:52 pm

The link brings me to the registration page. If you copy and paste the url instead of clicking the link this is avoided (at least on my pc).

URL (not clickable):

smh.com.au/news/business/airbus-says-sorry-for-a380-delay/2005/08/11/1123353442654.html
 
beauing
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RE: "Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 11:15 pm

Up to $100 million!!! The penalties are far stiffer than I ever imagined. If all launch customers are demanding such compensation, what will this do to A380 breakeven number?

To read the original article just go to Google News and use A380 as the search term.

[Edited 2005-08-11 16:28:07]
 
WINGS
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RE: "Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 11:28 pm

Quoting Beauing (Reply 4):
Up to $100 million!!! The penalties are far stiffer than I ever imagined. If all launch customers are demanding such compensation, what will this do to A380 breakeven number?

Not all of the A380 customeres will be recieving this, just the early customeres such as Qantas, Emirates and Singapore Airlines. As soon as the A380 is certified they will increase the production rate to offset the late deliveries. Although am sure that Airbus will try to ease this loss with an offer for the A350.

Regards,
Wings
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ClassicLover
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RE: "Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 11:37 pm

$100 million is not that much considering Qantas ordered 12 along with 12 options. It's actually quite a small sum in the overall scheme of things.

Trent.
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N79969
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RE: "Airbus Sorry For 380 Delay" Article

Thu Aug 11, 2005 11:40 pm

Airbus must tread carefully and showing contrition for the delay is the right thing to do. If Airbus is smart, they will not make any further statements that place blame on customers.
 
beauing
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 12:26 am

Quoting ClassicLover (Reply 6):
$100 million is not that much considering Qantas ordered 12 along with 12 options.

Given Airbus' net profit was $586.4 million for the last year, $100 million is significant, given that other airlines may seek similar damages.
 
PlaneDane
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 12:55 am

My reaction is that Leahy's visit with Dixon was merely a thinly disguised sales campaign. Doesn't it seem like the focus was more on getting A330's and A350's into the Qantas fleet than anything else?

After all, matters concerning compensation between Airbus and Qantas are best left to the lawyers, not either of these men. Besides, the apology Leahy offers comes too little, too late and sadly follows comments made by Airbus that should never have been made.
 
jacobin777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 1:16 am

Quoting WINGS (Reply 5):

Not all of the A380 customeres will be recieving this, just the early customeres such as Qantas, Emirates and Singapore Airlines

there were a few of these early customers..and if the rumoured price which QF paid for the A380s is true ($150 million), they might be basically getting one of The Whalejets for practically free (ok......80% off form listed price..thats damn cheap)

I COMPLETELY believe that the Airbus quoted 250-300 price to break even now is a load of bullocks..I would say its somewhere between 350-400......

Quoting Lumberton (Thread starter):
Talks about a possible "carry over" to A350 orders.

might be a good selling point for the A350, but now it seems that future A350 profits are going to become cannabalized..that being said, I still think QF will go for the 777's and 787's....
"Up the Irons!"
 
sphealey
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 1:29 am

I have to question if the public statements that are "leaking" out from the customers are just part of a re-negotiation campaign to lower the price a bit. Call it a refund, rebate, or penalty, but working with a number of CFOs on large contracts has taught me that it never hurts to ask that the price be lowered or that a rebate be given; the worst the supplier can do is say "no".

The reason I say that is I have been involved in some large technology purchases, although never in the airline industry, and no organization I worked for would have made solid business plans based on the 380 being delievered on time. There are just too many things new needing to be tested and integrated to assume that first delivery would occur +/- 5 minutes from the date specified on the original purchase order.

If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.

sPh
 
jacobin777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 1:34 am

Quoting Sphealey (Reply 11):

If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.

you are correct in your assesment...but you are making the assumption that the A380 will sell enough frames..and that's what I don't think will happen
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Lumberton
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 1:55 am

Quoting Jacobin777 (Reply 10):
Quoting Lumberton (Thread starter):
Talks about a possible "carry over" to A350 orders.

might be a good selling point for the A350, but now it seems that future A350 profits are going to become cannabalized..that being said, I still think QF will go for the 777's and 787's....

Actually, I was trying to make the point that it could have adverse consequences for A350 sales--especially to the likes of QF & SQ. Note the actual text from the article:

"Two months after Airbus was forced to concede its A380 program was running way behind schedule, Mr Leahy admitted the fiasco could affect the Toulouse aircraft maker's promotion of its yet to be built A350.

"I would like to believe not - but people are people," he said."

This is a remarkably candid admission from an individual who generally manages to put things in their best light.
Cheers.
"When all is said and done, more will be said than done".
 
gigneil
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 2:20 am

Quoting Beauing (Reply 8):
Given Airbus' net profit was $586.4 million for the last year, $100 million is significant, given that other airlines may seek similar damages.

I would absolutely love to see your source for that number.

N
 
beauing
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 2:40 am

Quoting Gigneil (Reply 14):
I would absolutely love to see your source for that number.

It comes from the July 28 2005 edition of the Wall Street Journal
EADS Net Climbs 47% As Airbus Deliveries Rise

Quote:
EADS, which owns 80% of Airbus, said net income rose to €488 million ($586.4 million) from €332 million in the year-earlier period.

http://online.wsj.com/article/0,,SB1...DS=airbus&COLLECTION=wsjie/archive


You can also go to Google News and use EADS net as the search term;
Airbus jets power rise in EADS net profit
eTaiwan News, Taiwan - Jul 27, 2005
EADS said net profit rose to 488 million euros (US$585 million) in the April-June quarter from 332 million euros in the year-earlier period. ...

Boeing, EADS Post Sales Gains, Raise Profit Forecasts (Update2) ...
Bloomberg - Jul 27, 2005
... EADS net income rose to 488 million euros ($586 million), or 61 cents a share, from 332 million euros, or 41 cents, a year earlier. ...

EADS and Boeing both ramp up forecasts
International Herald Tribune, France - Jul 27, 2005
... Before Wednesday, they had increased 28 percent since December. EADS net income rose to €488 million from €332 million a year earlier. ...

[Edited 2005-08-11 19:48:36]
 
eatmybologna
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 2:47 am

Quoting PlaneDane (Reply 9):
Besides, the apology Leahy offers comes too little, too late and sadly follows comments made by Airbus that should never have been made.



Quoting N79969 (Reply 7):
If Airbus is smart, they will not make any further statements that place blame on customers.

To what comments are you referring? I completely missed reading anything negative from A except a two month lack of admission to any delays.

Thanks,

e-m-b
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zvezda
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 2:51 am

Quoting Sphealey (Reply 11):
If the 380 succeeds, it will have a product lifetime of at least 30 years.

Succeeds at what??? If the new Adv JumboJet has significantly (at least 2-3%) lower CASM than the WhaleJet, then most WhaleJets may be retired by 2015. Remember the MD-11? Time will tell.
 
jacobin777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:10 am

Quoting Lumberton (Reply 13):
ctually, I was trying to make the point that it could have adverse consequences for A350 sales--especially to the likes of QF & SQ. Note the actual text from the article:

"Two months after Airbus was forced to concede its A380 program was running way behind schedule, Mr Leahy admitted the fiasco could affect the Toulouse aircraft maker's promotion of its yet to be built A350.

"I would like to believe not - but people are people," he said."

This is a remarkably candid admission from an individual who generally manages to put things in their best light.
Cheers.

got ya  thumbsup 
"Up the Irons!"
 
Maersk737
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:10 am

I

Quoting Zvezda (Reply 17):
Succeeds at what??? If the new Adv JumboJet has significantly (at least 2-3%) lower CASM than the WhaleJet, then most WhaleJets may be retired by 2015. Remember the MD-11? Time will tell.

Why do we have to remember the MD 11?

If the A350 has significantly lower CASM than the nightmareliner (787), then most nightmareliners will be retired by 2017. Time will tell.

I know this is a bullshit statement, but I couldn't resist  Wink

Cheers

Peter
I'm not proud to be a Viking, just thankfull
 
RedChili
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:21 am

Quoting Jacobin777 (Reply 12):
Quoting Sphealey (Reply 11):

If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.

you are correct in your assesment...but you are making the assumption that the A380 will sell enough frames..and that's what I don't think will happen

I think that Sphealey was writing from the point of the customer. For a customer, it doesn't matter how many frames the A380 will sell. If I buy 20 frames, what matters to me is that they will last 30 years.
Top 10 airplanes: B737, T154, B747, IL96, T134, IL62, A320, MD80, B757, DC10
 
dutchjet
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:27 am

Airlines like QF, SQ and EK are going to want much more than an apology from Airbus concerning the A380 - while much of what reported in the media is one-sided and the airlines are doing what they can to make the delay seem like the end of the world - there is no doubt that both SQ and QF are more than a little upset with Airbus and the delays in the A380 program. Media leaks such as the subject article, and the recently posted article/thread about SQ's reaction to the delay, are a bit out of the norm.

$100 million in damages seems like a lot of money to me for a 6-8 month delay but it all depends on what the purchase agreements say. There were rumors that QF got an amazing deal (and good deals are more than sharp prices) on its A380/A330 purchase, so it could be possible. If SQ and EK have similiar provisions in their A380 contracts with Airbus, the delays are going to get very expensive for Airbus - the number of A380s that must be sold for the program to breakeven just went up by a couple of dozen if all of this is true.

While Airbus must look ahead to the A350 to keep the momentum for that program moving, Airbus really should be concentrating its efforts in getting the A380 program back on track.......at this moment, I do not think that Airbus offering A350s at bargain prices to A380 customers is a practical solution to this situation.
 
PHXinterrupted
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:47 am

Quoting Maersk737 (Reply 19):
If the A350 has significantly lower CASM than the nightmareliner (787), then most nightmareliners will be retired by 2017. Time will tell.

Spoken like a true Airbus fan/European. Good one, pal.
Keepin' it real.
 
eatmybologna
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:51 am

Quoting Maersk737 (Reply 19):
nightmareliner (787)

Maersk737, no BS. You're correct. It'll be a nightmare to the likes of Airbus.  Smile


e-m-b
Isn't knowledge more than just the acquisition of information? Shouldn't the acquired information be correct?
 
RedChili
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:06 am

Quoting Dutchjet (Reply 21):
If SQ and EK have similiar provisions in their A380 contracts with Airbus, the delays are going to get very expensive for Airbus - the number of A380s that must be sold for the program to breakeven just went up by a couple of dozen if all of this is true.

Ehhh? $100 million is approximately the cost of one third of an A380 at list prices. If they have to pay SQ and EK similar fees, I don't see how this will raise the bar with a couple of dozen frames.
Top 10 airplanes: B737, T154, B747, IL96, T134, IL62, A320, MD80, B757, DC10
 
Areopagus
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:15 am

Quoting Beauing (Reply 15):
eTaiwan News, Taiwan - Jul 27, 2005
EADS said net profit rose to 488 million euros (US$585 million) in the April-June quarter from 332 million euros in the year-earlier period.

So the 488 million Euro figure is for quarterly profits, not yearly.
 
B777fan
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:23 am

Beauing,

Not that $100 million isn't a lot of money but, the net profit figure you quote is for a single quarter, not a year. The comparison is to the same quarter results a year earlier.

It still doesn't bode well for Airbus to be on the hook for so much.

Quoting Beauing (Reply 15):
You can also go to Google News and use EADS net as the search term;
Airbus jets power rise in EADS net profit
eTaiwan News, Taiwan - Jul 27, 2005
EADS said net profit rose to 488 million euros (US$585 million) in the April-June quarter from 332 million euros in the year-earlier period. ...
 
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mariner
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:39 am

I think this is great, and interesting that it is Mr. Leahy who is making the public apology.

I assume there have been other, private apologies, by other senior Airbus executives.

Quoting B777fan (Reply 26):
Not that $100 million isn't a lot of money but, the net profit figure you quote is for a single quarter, not a year.

Doesn't the penalty payment count as a cost of doing business, of making/selling the aircraft? Doesn't it represent a tax advantage to EADS/Airbus?

Quoting Dutchjet (Reply 21):
Airbus really should be concentrating its efforts in getting the A380 program back on track.

I'd make a bet they're doing that, Dutchjet, but in the division of labor, I don't think that is Mr. Leahy's job.

The six month delay is not actually the end of the world, life goes on, the sun will rise tomorrow. Mr. Leahy's job is to patch over the differences and try and sell aircraft down the road.

He does seem quite honest in saying that his job of selling the A350 has been made more difficult because of the A380 delay, but what can he do but move on?

Sh*t happens.

As such, it seems to me - stress "seems" - that everyone is doing what they should be doing in these circumstances.

cheers

mariner
aeternum nauta
 
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lightsaber
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 5:03 am

Quoting Sphealey (Reply 11):
If the 380 succeeds, it will have a product lifetime of at least 30 years. Does it really matter if that lifetime is from January 2007 to December 2037 - or from July 2007 to June 2037? My thought is, no.

True! And look at the sales forecasts. Sales aren't really expected to get "traction" until 2011 for the whalejet.

Quoting Mariner (Reply 27):

He does seem quite honest in saying that his job of selling the A350 has been made more difficult because of the A380 delay, but what can he do but move on?

Good point. However, "once bitten, twice shy." Airbus has to prove they'll get the next product out on time, weight, and efficiency. Not that the same isn't also true of Boeing, but Boeing hasn't had a bad miss in the memory of current airline execs. (What's that, three years?)  duck 

However, all said and done, I buy tickets for point to point and am willing to pay the premium to avoid time in a hub. Others might disagree... that's why there are free markets! While I appreciate the connectivity hubs give us; give me half a chance and I'll bypass the hub. Example, on Tuesday I fly out and I'm paying DOUBLE what a connection would have cost me. But, I decide that four hours of added time each way (eight hours total) was worth more to me than another $250. So let's see how this A380 market develops. My sister who is "uber elite" on one airline is flying another next month to get a non-stop... Forgoing lounge privileges and the wide seat to save a few hours. Everyone has their priority.

Lightsaber
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Cruiser
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 5:07 am

Quoting PlaneDane (Reply 9):
After all, matters concerning compensation between Airbus and Qantas are best left to the lawyers, not either of these men

Yes and no. Both of these guys pay the lawyers, so if they come back with not enough, then both of these men have the power to tell them (the lawyers) to continue of negotiating.

As well, it is not only about current deals, it is about those which will occur in the future. Maybe QF is so mad that they will go with Boeing on the next major order, and forever more. The president of QF certainly has that power!

James
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Leskova
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 5:37 am

Quoting Areopagus (Reply 25):
Quoting Beauing (Reply 15):
eTaiwan News, Taiwan - Jul 27, 2005
EADS said net profit rose to 488 million euros (US$585 million) in the April-June quarter from 332 million euros in the year-earlier period.

So the 488 million Euro figure is for quarterly profits, not yearly.

... and, if I'm reading it correctly, it's for EADS, not Airbus.

Regards,
Frank
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jacobin777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 6:01 am

Quoting RedChili (Reply 20):
I think that Sphealey was writing from the point of the customer. For a customer, it doesn't matter how many frames the A380 will sell. If I buy 20 frames, what matters to me is that they will last 30 years.

could be...not arguing..but it still doesn't help EADS/Airbus..

Quoting Mariner (Reply 27):
Doesn't the penalty payment count as a cost of doing business, of making/selling the aircraft? Doesn't it represent a tax advantage to EADS/Airbus?

well..it depends if its EBITDA or not..regardles....that still going to be a large hit to the bottom line..regardless.
"Up the Irons!"
 
beauing
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 6:02 am

Quoting Areopagus (Reply 25):
So the 488 million Euro figure is for quarterly profits, not yearly.

You're right. Sorry for the mistake.
 
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mariner
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 6:22 am

Quoting Jacobin777 (Reply 31):
that still going to be a large hit to the bottom line..regardless.

Well - what is? We don't know what the figure is, yet. WE may never know.

I don't wish to downplay the seriousness of it, and I'm sure Qantas will get a lot of money. But they will only get it on those aircraft that are actually delayed and depending on the length of time they are delayed.

As the Singapore Airlines CEO said, it is like a taxi - the longer the journey, the more it costs.

I don't know how many aircraft are involved and over what time frame. Maybe others do, maybe you do, but I believe there was an article posted here yesterday saying that the QF deliveries would be up to snuff by the end of 2007?

So perhaps the $100 million mentioned in the article becomes a maximum amount, not necessarily the actual amount? Or even just speculation:

Quoting Clickhappy (Reply 2):
Amid speculation Qantas might seek up to $100 million in penalties from Airbus,

Note: "might seek" and "up to $100 million".

Still, it isn't pretty. But the penalties remain a tax advantage to Airbus/EADS.

cheers

mariner
aeternum nauta
 
beauing
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 6:33 am

Quote:
The Airbus executive said that the A380 was one of the most complex engineering projects ever undertaken and every airline had come up with radically new interiors and designs for their aircraft.

He said Airbus had underestimated the work involved and had been hit by wire harness manufacturing problems.

"People are designing in-flight suites; they're designing private bedrooms; they're designing all sort so things that aren't just a modification of first class, business class and economy," he said.

"That required every one of the launch airlines to have completely new drawings, completely new wiring harnesses and quite honestly we didn't keep up with all the work that was involved in that."

Mr Leahy said the problem was compounded by a program designed to reduce the aircraft's weight.

"When you add up all of this together, any one of them probably would have been recoverable but everything coming together combined to give us a six-month delay," he said.

http://www.theaustralian.news.com.au.../0,5744,16229821%255E23349,00.html

"...quite honestly we didn't keep up with all the work that was involved in that."
An extraordinary admission...
 
jacobin777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 6:33 am

Quoting Mariner (Reply 33):

Well - what is? We don't know what the figure is, yet. WE may never know.

"Mr Leahy would also be discussing the "relatively significant penalties" that it will now pay Qantas for the delay.

"It's in the contract and it's not an insignificant sum but we'd prefer not to negotiate that in the press," he said."

http://au.biz.yahoo.com/050811/17/78y1.html

Quoting Mariner (Reply 33):
Note: "might seek" and "up to $100 million".

note: "not an insignificant sum" to me sounds like a WhaleAmount of money for the WhaleJet (pun intended)

Quoting Mariner (Reply 33):
Still, it isn't pretty. But the penalties remain a tax advantage to Airbus/EADS.

once again, it depends on how its structured, but it still a large hit...and with QF only having a dozen or so planes on order, it just might be that EK will get a larger payment....

Quoting Mariner (Reply 33):
I don't know how many aircraft are involved and over what time frame. Maybe others do, maybe you do, but I believe there was an article posted here yesterday saying that the QF deliveries would be up to snuff by the end of 2007?

yes...that was a thread which I had started.....
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mariner
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 6:49 am

Quoting Jacobin777 (Reply 35):
"Mr Leahy would also be discussing the "relatively significant penalties" that it will now pay Qantas for the delay.

"It's in the contract and it's not an insignificant sum but we'd prefer not to negotiate that in the press," he said."

Yes. I still don't know the actual firgure.

Quoting Jacobin777 (Reply 35):
note: "not an insignificant sum" to me sounds like a WhaleAmount of money for the WhaleJet (pun intended)

I am sure it is, and I am sure Airbus/EADS would prefer not to have to pay it. I still don't know the actual figure.

Quoting Jacobin777 (Reply 35):
once again, it depends on how its structured, but it still a large hit...and with QF only having a dozen or so planes on order, it just might be that EK will get a larger payment....

Um - unless the corporate tax laws in the Netherlands have changed since I lived there, then it doesn't depend on how it is structured. Sure, it reduces Airbus income, but you don't - or didn't - pay tax on income.

And with a gross profit of €2.4 billion, EADS/Airbus needs all the tax help it can get.

http://news.bbc.co.uk/1/hi/business/4332089.stm

And yes, "it just might be" that Emirates will get more than Qantas. But I don't know that.

As I said, I'm sure all involved would prefer that it had not happened, but it has and it is getting dealt with in an adult - and contractual - manner.

cheers

mariner
aeternum nauta
 
Ken777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 7:22 am

If the rumors are true and Airbus actually "put their money where their mouth is" in the agreements then the checks (cheques) should be in the mail now to help smooth over some rather mad airline execs.

What would be ironic is if QF got their cheque and used it to help purchase 60+ aircraft from Boeing - they could be a launch customer for the 747ADV fairly cheaply with the Airbus check.

The challenge Airbus has now is to address the airline irritations very quickly. No hassles, no negotiating, no arguments. Just get the check in the mail very quickly - that is the fastest and most effective way to address the problem, especially at a time when airlines are paying huge fuel bills. The money from Airbus can be included in income and help their P&L now. Delays in paying the compensation just helps Boeing sell planes.
 
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glideslope
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 8:11 am

Quoting N79969 (Reply 7):
Airbus must tread carefully and showing contrition for the delay is the right thing to do. If Airbus is smart, they will not make any further statements that place blame on customers

Then they had better keep a tight leash on Mr. Leahy. I'm sure Qantas is "pounding on the table" over their excitement in the 380.

Airbus should dump Mr. Leahy. His overblown media hype is part of the reason Airbus finds itself in the current situation. He is no longer an asset.

[Edited 2005-08-12 01:13:05]
To know your Enemy, you must become your Enemy.” Sun Tzu
 
atmx2000
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 8:15 am

Quoting Maersk737 (Reply 19):
If the A350 has significantly lower CASM than the nightmareliner (787), then most nightmareliners will be retired by 2017. Time will tell.

If CASMs were all that mattered, all air travel would be done on 747s for the last 40 years. Trip costs do matter because you can't fill a larger plane with more revenue passengers always.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Jet-lagged
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 8:21 am

Quoting Ken777 (Reply 37):
Just get the check in the mail very quickly - that is the fastest and most effective way to address the problem, especially at a time when airlines are paying huge fuel bills.

You mean actual cash payments? That would be very surprising. If Airbus were smart, they would have negotiated penalties being paid on discounted spares/services, or a reduction in final delivery payments. So, less cash flows from QF to Airbus, but cash never flows from Airbus to QF.
 
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Braybuddy
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 8:50 am

What's all the fuss about? How many new aircraft have been delivered to the first customer on time? Sounds like posturing and discount-seeking to me. Qantas wasn't formed yesterday: they would have expected delays on an all-new airliner, particularly one as big as the A380.
 
sphealey
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 9:05 am

>> you are correct in your assesment...but you are making
>> the assumption that the A380 will sell enough frames..and
>> that's what I don't think will happen

> I think that Sphealey was writing from the point of the
> customer. For a customer, it doesn't matter how many
> frames the A380 will sell. If I buy 20 frames, what matters
> to me is that they will last 30 years.

Not disagreeing (or agreeing!) with either reply, but I was trying to separate out three issues: the purpose of the public comments, the effect of delay on the customers, and the long-term success of the airframe.

As I said, it seems to me the public comments are probably a negotiating tactic, part of an attempt to lower the price of the 380s on order, get better terms on 350s, and possibly get some cash back. Just the usual in big-dollar contracts.

On the second issue, any organization would be foolish to depend on the first examples of such a complex product being delivered exactly on the due date, and I doubt any of the first customers did so (not what they will tell Airbus during the negotations over point 1 though!). Personally, I would have put a risk factor of 12-18 months delay in any business plan I wrote involving a similar situation.

On the third issue, I have no comment. I was merely pointing out that, if successful, the 380 should have a lifespan of at least 30 years, and 6 months delay is trivial from that viewpoint.

sPh
 
jacobin777
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:36 pm

Quoting Mariner (Reply 36):

Um - unless the corporate tax laws in the Netherlands have changed since I lived there, then it doesn't depend on how it is structured. Sure, it reduces Airbus income, but you don't - or didn't - pay tax on income.

fair enough..i'm clueless on Netherlands tax laws...

Quoting Mariner (Reply 36):
As I said, I'm sure all involved would prefer that it had not happened, but it has and it is getting dealt with in an adult - and contractual - manner.

hmm...i can't seem to recall stating a comment which says otherwise..

Quoting Mariner (Reply 36):
I am sure it is, and I am sure Airbus/EADS would prefer not to have to pay it. I still don't know the actual figure.

how many people will..but one can "kind of/sort of" make some kind of crude estimate...


ahhh Mariner, we play too many semantics.....but thats ok..I enjoy it.. Smile
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MidnightMike
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:43 pm

Quoting Beauing (Reply 4):
Up to $100 million!!! The penalties are far stiffer than I ever imagined. If all launch customers are demanding such compensation, what will this do to A380 breakeven number?

Airbus is not going to write a check for $100 million, sheesh. The penalty would probably be spread over the number of aircraft orders, and may not even include cash, but, further discounts on the A380, or could be used by the airline on other aircraft orders, or crew training, spare parts, etc.....
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mariner
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 3:53 pm

Quoting Jacobin777 (Reply 43):
how many people will..but one can "kind of/sort of" make some kind of crude estimate...

A crude estimate? Even if I accepted the high estimate of $100 million, it is reported in an Australian newspaper about an Australian corporation.

So - is it US dollars or Australian dollars? If it is Australian dollars, that's about $76 million in US dollars, or $24 million less than some might think.

Right away, the crude estimate looks even cruder.

But I don't know which dollars they mean, so I find it difficult to make any estimate, crude or otherwise.

Is that semantics?  Smile

cheers

mariner
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masseybrown
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:00 pm

Quoting Mariner (Reply 45):
So - is it US dollars or Australian dollars?

It also matters which country's laws govern contract disputes. In the US, if the contract didn't specify a method for determining the penalty, the airline would have to prove the amount of its damages and make an appropriate claim. Do French and Australian law work the same way?
 
NAV20
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:01 pm

The delays must be causing dreadful problems for the accountants. As things stand at present, the customers don't even know for certain which financial year they'll be having to raise the money in; which will play havoc with profit forecasts etc.

In Australia, the timing may involve everyone up to the State premiers and the Prime Minister. Traditionally, Qantas aircraft purchases often knock quite a big hole in the monthly balance of payments figures; it's customary for them to be timed, as far as possible, so as not to occur at crucial times, like in the middle of election campaigns.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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mariner
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:25 pm

Quoting NAV20 (Reply 47):
As things stand at present, the customers don't even know for certain which financial year they'll be having to raise the money in

I would think Mr. Leahy has given them a fairly good idea:

http://au.biz.yahoo.com/050811/17/78y1.html

cheers

mariner
aeternum nauta
 
jetfuel
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 4:46 pm

Lets hope it's not another MD-11 and that all the performance expectations are met
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
 
Boogyjay
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RE: "Airbus Sorry For 380 Delay" Article

Fri Aug 12, 2005 5:53 pm

Quoting Jacobin777 (Reply 35):
note: "not an insignificant sum" to me sounds like a WhaleAmount of money for the WhaleJet

Well it might be "not an insignificant sum". But if it were not, he would still publicly say that they consider it's a lot of money, and that they take it seriously. He doesn't want people, and especially Airlines exec, think Airbus doesn't care about these penalties... they would ask for even more compensation.
So don't rely to much on what they publicly say (I agree though, that we don't have more to debate on).

One has to take everything with a grain of salt when it comes to the usual PR and media BS! Especially with Mr Leahy.  Wink

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