art
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How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 12:50 am

Regarding the 787, I understand that 2 years ago Airbus thought that the A330 was good enough to continue selling against this new design.

Then Airbus offered an enhanced A330 with modified 787 engines at the end of 2004, calling it the A350. Since when the A350 has been through several incarnations.

Redesigning several times must cost a lot more than opting for a more ambitious design in the first place. I wonder how much money was wasted by Airbus' failure to recognise the need to aim much higher to start with.

And I wonder how many of the orders that went to the 787 might have gone to the A350 if a better design had been offered at an earlier time.

Anyone care to comment?
 
bobnwa
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:03 am

Quoting Art (Thread starter):
And I wonder how many of the orders that went to the 787 might have gone to the A350 if a better design had been offered at an earlier time.

I think you are coming to conclusions based on very little evidence, only conjecure on your part.
 
NAV20
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:13 am

I don't think the problem was under-estimating the 787, Art. It was under-estimating the potential of ETOPS, and continuing to concentrate resources on the A380.

The variants of the 787, with their different ranges/passenger loads, have already killed off the A300 and stand a good chance of doing the same to the A330.

But, IMO, Airbus' assumption that the four-engined A340 would somehow be able to hold its own against the Triple Seven in the longhaul market will cost Airbus even more market share in the next few years.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
Rj111
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:36 am

NW and KE are orders that could've been salvaged had the A350 been launched earlier.

Quoting NAV20 (Reply 2):
But, IMO, Airbus' assumption that the four-engined A340 would somehow be able to hold its own against the Triple Seven in the longhaul market will cost Airbus even more market share in the next few years

Talk of the A340E shows they've made no such assumption.
 
CrazyHorse
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:48 am

I think Airbus has not underestimating the B787, Airbus has overratet the A340 in all versions and maybe the growth of the fuel costs in the last few years.
I think high fuel costs are a good argument for an economical aircraft like the B787 in all versions. And here Airbus try to hit back with the A350, which is a newer and economical version of the A330 with some new ideas und technologys.
 
NAV20
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:49 am

Quoting RJ111 (Reply 3):
Talk of the A340E shows they've made no such assumption.

I think the operative word in that observation is 'talk', RJ.

Boeing is physically bringing attractive new models to the market, and selling them in numbers. So far, all Airbus is doing about new models (or, strictly speaking, variants on existing models) is 'talking' about them.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
airA380
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:51 am

Ultimately a330 and a343/342 will be replaced with a359/a358...and there would no need keep line of a330/a343...hence a345 & a346 won't be able to keep a340 line viable in economic terms so, it has to close. Having said that airbus is also thinking of extending a350 to compete with future 787-10 and 772.

A340E just won't happen!!!
I'm flying without wings!!!!!!!!
 
Rj111
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:58 am

Talking is all part of the development stage.

I believe the decision about the A340E is due soon.

Quoting AirA380 (Reply 6):
hence a345 & a346 won't be able to keep a340 line viable in economic terms so, it has to close.

If they close the A340 line, they will also be closing the A350 line. Catch my drift?

[Edited 2006-03-26 18:02:06]
 
DfwRevolution
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 2:06 am

Quoting RJ111 (Reply 3):
Talk of the A340E shows they've made no such assumption.

No, no. NAV20 is referring to the assumptions Airbus made in the late-90s when developing the A340NG.

The fact that an Enhanced A340 is necessary to compete with the B777 proves his point.

Quoting NAV20 (Reply 2):
It was under-estimating the potential of ETOPS, and continuing to concentrate resources on the A380.

Good point.

Quoting Art (Thread starter):
And I wonder how many of the orders that went to the 787 might have gone to the A350 if a better design had been offered at an earlier time.

In my opinion, Airbus worst decision has been developing a B787 competitor in short order.

There is no good reason why Airbus must introduce a Boeing counterpart by 2010. In the 8 months Airbus went from brushing off the B787, to offering the A330-Lite, to offering a re-engined A330, to offering the A350, I seriously doubt all options and trade studies were fully considered.

Plain and simple: Airbus cannot fully match the B787 economics. Perhaps not the end of the world, but it does not bode well for the long-term.

Say what you will about the A330-200 "killing" the B767, but Boeing sold way more B767 than Airbus sold A332 and a handful of B787 orders will surpass the A332. In hindsight, who won?

Even if Airbus goes through some rough years where the A330 sells very poorly, the consistent precedent in this industry is for later models to sell very well. In some cases, like the B777, the later model still wins the greatest market share.

Airbus should be waiting until the have the technology not to simply "match" Boeing, but provide a tangible advantage over the B787. That could easily be 2015-2020, but this market is predicted at 2,500-3,000 aircraft over 20 years! Perhaps a $1-2 billion A330 upgrade to keep the product attractive to existing customers near term is sensible, but Airbus is going all-in with $5.5 billion dollars.

As it stands, here's my predicted headline in 2015: "Airbus seeks buyers for A350 Enhanced."
 
Rj111
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 3:05 am

Quoting DfwRevolution (Reply 8):
No, no. NAV20 is referring to the assumptions Airbus made in the late-90s when developing the A340NG.

I initailly read it as that. I was moreso suggesting that the assumption has since been dropped. And future market share may not be lost just yet.

Quoting DfwRevolution (Reply 8):
Airbus should be waiting until the have the technology not to simply "match" Boeing, but provide a tangible advantage over the B787. That could easily be 2015-2020, but this market is predicted at 2,500-3,000 aircraft over 20 years! Perhaps a $1-2 billion A330 upgrade to keep the product attractive to existing customers near term is sensible, but Airbus is going all-in with $5.5 billion dollars.

The flipside of that is, demand for this size market isn't so constant, it's coming in waves. Becasue the 767 did so well and is now approaching retirement age, we're approaching a peak now. The key is customer count, unchallenged the 787 will have won a lot of customers by 2015-2020. Airbus would have to make another significant improvement over the 787 to pursuade airlines to deviate form their 787 fleet, should they wish to expand. I could see it becoming more of an L1011 to the DC-10, as supposed to a 707 over the Comet.
 
atmx2000
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 3:16 am

Quoting RJ111 (Reply 7):
If they close the A340 line, they will also be closing the A350 line. Catch my drift?

Not quite. They need it for the A330. And they are building a new line for the A350, correct?
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Oroka
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 3:36 am

IMO Boeing was doing the 787 for much longer. I think the Sonic Cruiser was a smokescreen to develop composite materials, and new engines. Airbus didn't take the design seriously, and Boeing got a large head start. Airbus has come up with a counter to the 787, the A350, but it is years behind, and would be even farther behind if they had to design a composite fuselage.

Sonic Cruiser composite fuselage test section


This was either a plan by boeing from the beggining, or, they had all this $ spent on developing a plane that was never going to fly, and seen a potential advantage that could be gained over Airbus.
 
Rj111
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 3:40 am

Atxm why would you say 'not quite' and then ask if you're right or not?  Silly

http://search.msn.co.uk/results.aspx...uced+assembled+A330+A340&FORM=QBRE
 
Glom
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 4:18 am

Quoting Oroka (Reply 11):
IMO Boeing was doing the 787 for much longer. I think the Sonic Cruiser was a smokescreen to develop composite materials, and new engines. Airbus didn't take the design seriously, and Boeing got a large head start. Airbus has come up with a counter to the 787, the A350, but it is years behind, and would be even farther behind if they had to design a composite fuselage.

Ooh! A conspiracy theory. I like it.
 
flydreamliner
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 4:41 am

Quoting RJ111 (Reply 7):

I believe the decision about the A340E is due soon.

Airbus' resources financially are pretty strained. Boeing's defense division allows them an unfair advantage, which is a constant stream of government money. Boeing spent a lot on 787. They spent well, a decent amount on 747-8, and they'll be spending a lot on 737RS. 772LR cost some money too.

Airbus is spending a lot right now on A400M - how big of a market it will find, i'm not sure. They just sunk a HUGE amount into A380, which has nearly doubled the number of deliveries they initially believed they'd need to turn profitable. I think they'll probably sell the 400 odd some planes they have to sell to break even on it, but I read Jack Welch, GE CEO talking about meeting with Airbus' chairman in the 90s, who said they'd do A380, and a large part of that was prestige, he was sick of airbus being a niche player, as he saw it. Even if airbus sold more jets, they believed they didn't have the same prestige. So maybe making money was secondary on A380, I don't know.

Airbus is spending increasingly more on A350, and they'll have to spend a lot on A320NG as well. They're tapped out pretty well.

Airbus could have saved a lot of money if they had done two things:

A: Ditched the A340 and gone for a long range, improved A330 to cover the market held by A345 and A346. They underestimated ETOPS, they underestimated how important fuel costs are.

B: Taken 787 seriously. They were complacent and indecisive again, something that has become a trademark of airbus mismanagement. They had every possible advantage coming into this, and they're succesfully pissing it all away. If they had early on decided to fight Boeing for this huge market, to develop a new jet, highly composite in construction (composites being something airbus pioneered) using bleedless engines, and a new cross-section, they could have won, game, set, match. As it stands, they're bringing a less sophisticated, less advanced, less modern aircraft to market - it will cost just as much as 787 (if you look how inexpensive 787 is, it gives A330 a run for the money in low purchase price), and won't be as impressive. If they spend the billions on A346E, they may get a jet as good in terms of efficience as 773ER, only 10 years later, and it still will be Airbus' narrow old fuselage. That narrow design is why A346 is disproportionally heavy. They'll always have that issue. It will be like A350. They'll wait too long to make up their mind, end up half-assing it, and bringing an inferior product to market. By the time A346E comes out, Boeing will be working on Y3, you know they'll leak proposed specs, pictures, etc. and airlines will wait on Y3 before they buy A346E, which after all, is no better than 773ER, just 10 years late to the party.

Where has the Airbus who brought us A300 and A320 gone? The brilliant and innovative Airbus. Now all we have is conservative, sluggish, indecisive Airbus. Old Airbus would have beat Boeing to the punch on 787, gone one further, developed new technologies. New Airbus changes their mind 7 times, and still tries to pawn off an updated A330 on us.
"Let the world change you, and you can change the world"
 
Lumberton
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 4:48 am

Quoting RJ111 (Reply 3):
NW and KE are orders that could've been salvaged had the A350 been launched earlier.

IIRC, the plane was being offered to customers long before NW and KE finalized their decision. Air Europa ordered 10 (10 options,too?) in 2004.
"When all is said and done, more will be said than done".
 
jacobin777
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RE: How Much Has Underestimating The 787 Cost Airb

Mon Mar 27, 2006 4:54 am

Quoting CrazyHorse (Reply 4):
I think Airbus has not underestimating the B787, Airbus has overratet the A340 in all versions and maybe the growth of the fuel costs in the last few years.
I think high fuel costs are a good argument for an economical aircraft like the B787 in all versions. And here Airbus try to hit back with the A350, which is a newer and economical version of the A330 with some new ideas und technologys.

Airbus believed that their A330 (a damn good plane by the way) would have held its own against the B787...they did underestimate the B787....their original pattern of comments (as mentioned by the threadstarter) is proof positive..


they got much more serious I think when they lost the NW..even though it might not have had anything to do with the fact they lost that order...

not to mention, Airbus was focused too much on the A380 and missed the middle market.....that is where Boeing spent most of its time, effort, energy, and money...
"Up the Irons!"
 
Alessandro
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 5:12 am

Still argueing about paperplanes? Sigh....
From New Yorqatar to Califarbia...
 
zvezda
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 5:12 am

Quoting FlyDreamliner (Reply 14):
Where has the Airbus who brought us A300 and A320 gone? The brilliant and innovative Airbus. Now all we have is conservative, sluggish, indecisive Airbus. Old Airbus would have beat Boeing to the punch on 787, gone one further, developed new technologies. New Airbus changes their mind 7 times, and still tries to pawn off an updated A330 on us.



Quoting FlyDreamliner (Reply 14):
Jack Welch, GE CEO talking about meeting with Airbus' chairman in the 90s, who said they'd do A380, and a large part of that was prestige, he was sick of airbus being a niche player, as he saw it.

Are Airbus the Nebuchadnezzar of our time?
 
Rj111
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 6:08 am

Quoting FlyDreamliner (Reply 14):
Airbus could have saved a lot of money if they had done two things:

A: Ditched the A340 and gone for a long range, improved A330 to cover the market held by A345 and A346.

B: .....They had every possible advantage coming into this, and they're succesfully pissing it all away. If they had early on decided to fight Boeing for this huge market, to develop a new jet, highly composite in construction (composites being something airbus pioneered) using bleedless engines, and a new cross-section, they could have won, game, set, match.

How would either of those things saved them money? The very reason the A345/6 and A350 are reality, is to significantly reduce expendature.

People are forgetting there are two sides of the clean sheet/derivative argument.

Airbus have a good understanding of the A330 airframe, there ability to predict a derivative's performance is increased. Also the A330 is currently the best aircraft in it's field. The 787 has been heavily influenced form it. I wonder how differently a clean sheet design would have been.

The reduced R&D costs mean there is less to get back, financing can be more felixable.

It's also technical a less risky project, Boeing is taking a big leap with the 787. Which is good but there is no denying that the bigger the advance the more potential prolems there could be. Now i know Boeing have done their homework, but you can't plan for everything. I'm not saying that any of these things will happen, i can't see into the future, but the potential for it is definately increased.

Just remember for every failed 764 and Md-11 there is a succesful 737NG and MD-80.
 
airfrnt
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 7:43 am

Quoting Art (Thread starter):
Redesigning several times must cost a lot more than opting for a more ambitious design in the first place. I wonder how much money was wasted by Airbus' failure to recognise the need to aim much higher to start with.

I don't think this is quite the issue as much as the time to market issues are important. You really have two choices in the Airline industry. You can be first to market with inferior technology or second to market with better technology and less orders. The headless horseman that Airbus is dealign with right now is that the 787 was first to market, and at least on paper is a better design.

There are drawbacks with each approach. The L-1011 has better technology then the DC-10 or the 747SP. But the technology problems with the engines made the plane a complete disaster for the early adopters, and gave the DC-10 the overall market.

Quoting Art (Thread starter):
And I wonder how many of the orders that went to the 787 might have gone to the A350 if a better design had been offered at an earlier time.

Even after the A350 (in it's fourth iteration) was introduced, the 787 was still outselling the A350. What's far worse is that the "blue chip airlines" that is carriers that have a long established track record of surviving and doing well and ordering followup planes are almost all ordering the 787. The fact that the battle for the 787/350 is being fought at places like EK which should be Airbus strongholds reflects a rather lobsidded battle.

Boeing has also been very carefull to offer the 777/787 as a family. The 777 is clearly a better plane right now then the 340. On paper then 787 is a better plane then the 350. This means Boeing gets to charge more for the plane, and still walks away with the order.

Quoting NAV20 (Reply 2):
I don't think the problem was under-estimating the 787, Art. It was under-estimating the potential of ETOPS, and continuing to concentrate resources on the A380.

I agree on both points. After 9/11, SARS and the dotcom bust Airbus should have slowed or shelved the A380 program to focus on the 757/767/300 market.

Quoting CrazyHorse (Reply 4):
Airbus has overratet the A340 in all versions and maybe the growth of the fuel costs in the last few years.

A couple of years ago when I first joined the boards, there were constant rumours of unhappyness with the first generation A340s, and more reports of problems (wings being too heavy, etc) on the next generation 340s. These problems seem to have been confirmed by the sales problems of the 340. Airbus needs to fix these stats, or push more money into the 350 and make a more effective competitor for the 777.

Thankfully for Airbus, they have the time to do so, given the dominence of the 320 over the 737. If Boeing gets the 737RS to market without Airbus having a effective response, they will really be in trouble across their entire product line.


Quoting NAV20 (Reply 5):
Boeing is physically bringing attractive new models to the market, and selling them in numbers. So far, all Airbus is doing about new models (or, strictly speaking, variants on existing models) is 'talking' about them.

To be fair, I believe that the A350 is being developed and is on a production roadmap. Airbus does need to decide if they are going to respond the the 340/330 sales problems with the 350, or a combination of a 350/340NG.

Quoting FlyDreamliner (Reply 14):

Airbus' resources financially are pretty strained. Boeing's defense division allows them an unfair advantage, which is a constant stream of government money.

Not really on both counts. Airbus has more then enough cash coming in fronm the 320. (paradoxically the 380 deliveries are going to start costing them more money if the European governments enforce their lauch aide conditions). Airbus also gets a similar percentage of revenue via EADS for the military side versus the civilian side as Boeign does. Also remember that EADS has a bit of competition in Europe via BAe, but it is nothing like Boeing's battles with LockMart over here.

Quoting FlyDreamliner (Reply 14):
Airbus is spending a lot right now on A400M - how big of a market it will find, i'm not sure. They just sunk a HUGE amount into A380, which has nearly doubled the number of deliveries they initially believed they'd need to turn profitable. I think they'll probably sell the 400 odd some planes they have to sell to break even on it, but I read Jack Welch, GE CEO talking about meeting with Airbus' chairman in the 90s, who said they'd do A380, and a large part of that was prestige, he was sick of airbus being a niche player, as he saw it. Even if airbus sold more jets, they believed they didn't have the same prestige. So maybe making money was secondary on A380, I don't know.

The A400 appears to be a pretty good product. The C-130 is old and vulnerable. The A380 is not going to be a cashflow positive program for a long time, and it will take even longer to get back to cost of capital break even or the 20% margins Airbus wants to have on that program.

If you read the original justification and what Airbus itself was saying when they launched the A380. The needed to do the A380 so they would not be percieved as a niche player compared to Boeing. They needed to provide a heavy lift for Asia and the mega hubs (Japan and BA in particular). Natural growth on routes + hubs would require the A380.

The first argument is interesting. Are there any airlines that would not buy Airbus before 1999 that will now simply because they launched a big plane? The A380 was supposed to be the technical powerhouse, and expose Boeing as being too conservitive and less technologically advanced. Boeing stole a lot of that thunder with the 787 which is compared to the A380 all the time, denying Airbus a clear P.R lead.

The A380 has been good press for Blair, Chirac and Schroeder internally in Europe, and that may be the only thing that matters.

Certainly the Asian market has not turned out the way Airbus forecast for the A380. Neither of the two huge Japanese carriers have purchased it, neither of the two huge American carriers at NRT have purchased it (UA and NW) and outside of a few orders from China and a few orders from SQ, it's adoption outside of Japan hasn't been great.

The last argument about the growth of Hubs is pretty much negated by the fact that the growth in hubs has actually been in smaller aircraft (huge numbers of commuter planes, huge numbers of A320/737NG, less of 757/767/A330/A340, and very few VLA).
 
ikramerica
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 8:10 am

Quoting RJ111 (Reply 19):
How would either of those things saved them money? The very reason the A345/6 and A350 are reality, is to significantly reduce expendature.

Companies that are unwilling to mortgage their futures to provide for their futures are not going to have strong futures...

If Airbus is trying to force a 35 year old fuselage on customers solely to save cost, that is their mistake. And it seems as if that is what they are doing.

Boeing, on the other hand, has given up on forcing out-dated fuselages on it's customers (748i excepted). 777 was a new idea, Sonic Cruiser was too, 787 is a new fuselage, and the 737RS will be as well. One can even say that Boeing was so worried about providing a "new" cross-section for the 787, it might be 3-6 inches too narrow now that people want to put 9Y in it, but it does show they weren't afraid to offer something new.

If Airbus were smart, they'd have seen this and offered a new plane in the size range from A332-A346 using a fuselage cross section between the 787 as proposed and the 777. Rather than try to save money by using the limitations of the GEnx sized engine (which can't go to a 346 twin thrust range), they would have been smarter to leverage the GEnx and Trent 1000 into a new engine family. Maybe it means 2012 EIS, and $3bilion more money, but it also means a plane that competes with the 788/9/10 AND the 772/3.

It would provide for their future, rather than trying solely to leverage their past like the 350 and 340E are doing.

Time will tell.

[Edited 2006-03-27 00:11:05]
Of all the things to worry about... the Wookie has no pants.
 
art
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 8:49 am

Quoting Ikramerica (Reply 21):
If Airbus were smart, they'd have seen this and offered a new plane in the size range from A332-A346 using a fuselage cross section between the 787 as proposed and the 777. Rather than try to save money by using the limitations of the GEnx sized engine (which can't go to a 346 twin thrust range), they would have been smarter to leverage the GEnx and Trent 1000 into a new engine family. Maybe it means 2012 EIS, and $3bilion more money, but it also means a plane that competes with the 788/9/10 AND the 772/3.

I agree.

It seems to me that Airbus have reluctantly ratcheted up what they are prepared to invest in an A330 successor as more and more feedback told them that their iterations of the A350 were inadequate, resulting in a far larger investment than they originally hoped to make. I suspect that the $5 billion or so they are now prepared to spend on development will still not get an aircraft that competes effectively with the 787. Furthermore they still have the problem of the A340 being non-competitive with the 777 and that will cost some more $billions to address adequately.

Airbus could end up spending just as much trying to narrow the gap on the 787/777 with the A350 and an improved A340 as they would have spent on a clean sheet A350 to match or surpass the competition.

Airbus should have thought this one through far better than they appear to have done.
 
jacobin777
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 8:57 am

Quoting Art (Reply 22):

Airbus should have thought this one through far better than they appear to have done.

Art, judging from the comments of Airbus' CEO, Thomas Enders, it doesn't seem as if they are discontent with the A350, in fact, they believe its superiour to the 787...which is fine, but as I said, the truth of the pudding will be in the eating...

"Q. What are you doing to counter Boeing's 787 Dreamliner launch?

A. The 787 is certainly a good plane. But we are putting a better plane against it with the A350"

NYT:March 26, 2006
"Up the Irons!"
 
Rj111
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 9:17 am

I'm impressed so many people know better than Airbus.  Wink
 
Halibut
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 9:28 am

Quoting RJ111 (Reply 24):
I'm impressed so many people know better than Airbus.

Not airbus , just the polititions meddling in on airbus's decisions .

Halibut
6 million Jews were slaughtered-Do you see Jews flying planes into buildings in Germany to kill 1000s of innocent, NO !
 
art
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 9:46 am

Quoting RJ111 (Reply 24):
I'm impressed so many people know better than Airbus.

All companies, for all their knowledge of their industry, make mistakes from time to time. Aircraft builders are no exception. Outsiders can sometimes see where a company is going wrong before the company itself does.
 
atmx2000
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 10:25 am

Quoting Ikramerica (Reply 21):
Boeing, on the other hand, has given up on forcing out-dated fuselages on it's customers (748i excepted). 777 was a new idea, Sonic Cruiser was too, 787 is a new fuselage, and the 737RS will be as well. One can even say that Boeing was so worried about providing a "new" cross-section for the 787, it might be 3-6 inches too narrow now that people want to put 9Y in it, but it does show they weren't afraid to offer something new.

I disagree with this idea. Airlines that find the 787's 9Y acceptable are not looking for 9Y but rather the lowest CASM. Those 3-6 extra inches would increase drag and increase weight, and thus increase cost. They want 9Y with minimal costs, and Boeing is giving them that. Boeing's tendency has been to design widebodies with fuselage widths that are positioned in above that needed fo for comfortable X across, yielding a very comfortable X across and reasonable X+1 across. Airbus seems to aim only for comfortable X across, which makes X+1 across suboptimal and X-1 overly generous, thus restricting the economy cabin to only one viable format. From my calculations, 11 across in the A380, though feasible simply due to large width, will be less comfortable than 10 abreast in the 777. 9 abreast in the A300 cross section derivatives will be unreasonable for long haul operators.
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CWFan
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 10:31 am

So you guys think that the 340E won't happen? It seems that absent a major 777 overhaul, the 340E will be competitive with the T7.

My question: 340E comes out in, say, 2012-13 (approx -- maybe later), and the 350-900 or 350-1000 comes out about the same time. These two planes will go toe-to-toe with the 777-300ER, 777-200LR and the 787s (+, say, 787-10). That seems like a pretty competitive product mix.

Also, if the 350 is so inferior, why is Airbus selling so many of them? Sure, they're getting beat 2:1, but they're still selling hundreds of planes. 33 to 38% of the market isn't too bad.
 
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 10:32 am

Quoting RJ111 (Reply 24):
I'm impressed so many people know better than Airbus.  

 checkmark 

cheers

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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 10:41 am

Quoting CWFan (Reply 28):
It seems that absent a major 777 overhaul, the 340E will be competitive with the T7.

actually not, it would be abent of a few teaks rather than a 777 overhaul....don't forget, the A340E will compete basically with a modern-day 777, not a 777 5 years from now..
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 11:30 am

I don't think Airbus underestimated Boeing, in any way.

Engineers at Airbus can figure out the 787 w/o having to read A.Net member's critiques. I think Airbus knows the 787 will be a better plane, in some respects but not all. IMO, Airbus is betting on price first and product second.

Airbus will most likely spend less on A350 R&D than Boeing's 787.

Airbus needs to sell less than Boeing to break even and it can afford selling a great plane at a very competitive price. Boeing has to repay back debt so it need to sell more.

This is the route that Airbus chose. Time will tell whether this will be a good business plan or not...

In conclusion, IMO Airbus is betting the farm on this strategy and I don't think it was a good idea. We now know the powerful combonination of the 787/777. Airbus can't match this... I have said this before and will say it again... they need a new x-section, a new plane that will be a true competitor and replacement to the A330/340. For now, Airbus will play second but first on price. let's see if airlines like that or not....
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airbazar
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 11:41 am

Quoting NAV20 (Reply 2):
don't think the problem was under-estimating the 787, Art. It was under-estimating the potential of ETOPS, and continuing to concentrate resources on the A380.

You mean, A340? The A380 and A350 are not and should not be mutually exclusive. Even Boeing is developing an A380 competitor model in the 748.

In my opinion they should have stopped spending any resources on the A340 a long time a go and reallocated those resources on a better A350. I'm still amazed that to this day, they are still wasting resources on the A340.
 
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 12:14 pm

Quoting Airbazar (Reply 32):
You mean, A340? The A380 and A350 are not and should not be mutually exclusive.

On all the evidence, Airbazar, the A380 has absorbed virtually the whole of Airbus' design/development resources since 2,000. Just as important, it seems to have utterly dominated management thinking over that period.

One of the rules of any business is that you can never stand still, 'rest on your laurels. Even if you have a clear lead (as Airbus did five years ago) you have to plan new ventures to keep that lead. You should always be thinking of the NEXT project as well as the one on hand.

Airbus management failed to plan for a replacement for the A300; they failed to see the trend towards widebody longhaul twins; they failed to realise how important operating costs, particularly fuel costs, were becoming for airlines; they left a yawning gap in their model range (300-500 seats) wide open for their competitor to exploit; and, even though they were the first to use composites on a big scale, they didn't see the weight-saving potential of that developing technology either.

And they don't seem to learned much from recent events. Even now, they apparently intend to leave their entire midsize range dependent on a 30-year-old 8-across aluminium fuselage design, that STILL won't carry more than 300. That HAS to be a mistake.
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khobar
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 12:22 pm

Quoting CWFan (Reply 28):
Also, if the 350 is so inferior, why is Airbus selling so many of them? Sure, they're getting beat 2:1, but they're still selling hundreds of planes. 33 to 38% of the market isn't too bad.

Firstly, I don't think it's accurate for anyone to imply that the A350 is grossly inferior to the 787. That's not what you were doing, I know, but you seem to be under the impression that others have.

There are a number of reasons why airlines would purchase the A350 over the 787. The 787 will likely be a very good aircraft - sales would seem to indicate the level of faith in it is high - but I don't know that it is the best aircraft in its class in all situations. EK wants an aircraft larger than the original 787-9 to the extent that even the -10 version isn't enough for an immediate order from them. Undoubtably there are other missions for which the A350 might be better suited.

Also, Airbus can offer brand new and very capable A330's as stop-gap measures both to airlines that already fly them and those that don't. That is an incredibly attractive incentive Airbus is able to offer, as the A330 is a very, very good aircraft. Boeing can offer their 767 which has its strengths, too, but the fact remains that airlines do make money from carrying cargo, and the A330 is more able to meet this need w/pax than the 767. There's also the commonality issue that, despite what some may claim, does come into effect at least to some degree. If you already fly Airbus then it's easier to stick with Airbus.

And there are other factors which we can only speculate. For example, much is said about the superiority of the 777 over the A340 to the extent that one has to ask who in their right mind would buy a new A340. Yet very sane people still do - maybe not in quite the quantities as the 777 but there are sales there nonetheless. The same is true for the 767 - there are still some sales for that plane too.
 
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RE: How Much Has Underestimating The 787 Cost Airb

Mon Mar 27, 2006 12:24 pm

Quoting BoeingBus (Reply 31):
Airbus is betting on price first and product second.

A350 is more expensive than 787 at least at list, no?
 
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 12:25 pm

Quoting BoeingBus (Reply 31):
In conclusion, IMO Airbus is betting the farm on this strategy and I don't think it was a good idea. We now know the powerful combination of the 787/777. Airbus can't match this... I have said this before and will say it again... they need a new x-section, a new plane that will be a true competitor and replacement to the A330/340. For now, Airbus will play second but first on price. let's see if airlines like that or not....

Couldn't be better said! I really look at the last couple of years and see Boeing just stealing the momentum away from AirBus that they worked so hard to attain during the 1990s with the A330/A340. The A330 was clearly superior to what Boeing offered with the 767-300/400, but later variants of the 777 just ate it and the A340 out of they sky, especially with fuel costs associated with the A340. I just don't think the A350 can recapture what they've lost.
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 12:37 pm

Quoting NAV20 (Reply 33):
And they don't seem to learned much from recent events. Even now, they apparently intend to leave their entire midsize range dependent on a 30-year-old 8-across aluminium fuselage design, that STILL won't carry more than 300. That HAS to be a mistake.

That's a non sequitor. There is nothing inherently wrong with an 8 abreast design. It's the smallest cross-section that allows for side-by-side LD3s. Also, newer isn't necessarily better, though in technology it usually is. While I certainly wouldn't start a new clean-sheet design for an aluminium airliner today, a derivative can make sense e.g. the new JumboJet. If Airbus could have produced an A350 for about the same development cost of the new JumboJet (they briefly tried), then it would have been a great deal for Airbus. However, that wasn't what airlines wanted, not because the proposed A350 was bad, but because the B787 was better. And why should a midsize range seat more than about 300? 350 to 500 seats is probably the right range for the largest airliners.
 
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RE: How Much Has Underestimating The 787 Cost Airb

Mon Mar 27, 2006 12:40 pm

Quoting Khobar (Reply 34):
Undoubtably there are other missions for which the A350 might be better suited.

First of all, welcome to A.net. Smile

well..for EK, its only the A359 versus the potential B787-10...for which EK's Clark has mentioned....

" The A350-900 is a brilliant machine if it does what Airbus says it will, and we've told them that misses [on performance or delivery promises] will be unacceptable.

Boeing is studying a double stretch of the 787, the -10X, primarily for Emirates needs, which Clark says is likely to be superior to the A350-900. "

Flight International:29/11/05

Quoting Khobar (Reply 34):
Also, Airbus can offer brand new and very capable A330's as stop-gap measures both to airlines that already fly them and those that don't. That is an incredibly attractive incentive Airbus is able to offer, as the A330 is a very, very good aircraft.

Sounds great in theory Khobar, but that concept didn't sell at least with QF and we'll see what happens with SQ, as SQ is also looking for "interim lift"..
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 12:45 pm

Quoting BoeingBus (Reply 31):
I have said this before and will say it again... they need a new x-section



Quoting NAV20 (Reply 33):
they apparently intend to leave their entire midsize range dependent on a 30-year-old 8-across aluminium fuselage design

Just what is so wrong with a 2-4-2 cross section?
 
khobar
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RE: How Much Has Underestimating The 787 Cost Airb

Mon Mar 27, 2006 1:16 pm

Quoting SLCUT2777 (Reply 36):
Couldn't be better said! I really look at the last couple of years and see Boeing just stealing the momentum away from AirBus that they worked so hard to attain during the 1990s with the A330/A340. The A330 was clearly superior to what Boeing offered with the 767-300/400, but later variants of the 777 just ate it and the A340 out of they sky, especially with fuel costs associated with the A340. I just don't think the A350 can recapture what they've lost.

Be careful with making comments like that in as much as you have to remember how things can change very quickly. For example, Airbus completed what appears to be a successful A380 evacuation test @853pax+20 crew, so unless there really is something inherently flawed in that aircraft, expect a number of new orders for the type. Also keep in mind that if Airbus does as they have talked about in subsidizing airlines to match A340 costs to 777 and that those subsidies will be tagged to the cost of fuel and if Airbus offers other incentives such as maintenance contracts, etc for the A340, the advantage of buying a 777 may be completely eroded. Sure it might cost Airbus some money but I'm sure it would be absorbed one way or another - otherwise Airbus wouldn't be able to make such offers.

And let's not forget that the 787/777 combination's power can easily be destroyed if the 787 falls even a hair short of expectations. It's an all new design attempting to take the industry in an all new direction, and there are plenty of anti-Boeing types, both professional and amateur alike, praying for it to fail. Just one screwup may affect the perception of the 787 as much as we've seen otherwise simple screw-ups affect the perception of the A380.
 
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:36 pm

Quoting Jacobin777 (Reply 38):
Sounds great in theory Khobar, but that concept didn't sell at least with QF and we'll see what happens with SQ, as SQ is also looking for "interim lift"..

And it really doesn't matter at all to a carrier like QF or someone else who already flies 330s. They can buy the 787 and still add some A330s short term. Airbus isn't going to not sell them just because you turned down the 350.

the 330/350 combo offer really only appeals to "switcher" airlines, who are going Airbus for the first time. They can add 330s now, and bring in 350s later with the same seating plan and not have to worry about retraining.

Boeing customers who decide on the 787 would likely look for intermediate lift elsewhere, through the leasing market, similar to what CO is looking to do. If the 787 is a superior product, an airline isn't going to choose the long term inferior product for 3 years of short term lift using a marginally better aircraft than what you can lease. If the 787 and 350 are truly equal, they might do so.

I don't know the answer to what each airline will do, but QF, for example, chose the 787 despite the 330s they have and are still getting, and will use those 330s as interim solutions at QF and JQ anyway.

Quoting WingedMigrator (Reply 39):
Just what is so wrong with a 2-4-2 cross section?

boeing seemed to think it was good enough to base the 787 on. But the difference is that the current 2-4-2 Airbus uses is crammed into a smaller fuselage with a higher floor to fit cargo in the hold. The 787 has a lower floor and a usable crown space in an ovoid fuselage made efficiently possible by the new production methods. This means better interior space in the cabin, crew rests above the cabin, storage for carts, etc., above the cabin, systems above the cabin, which Airbus can't offer. The 350 tries to compensate somewhat by cramming a pilot rest under the cockpit, but that still leaves crew rest that must either be in usable cargo space in the hold, or usable passenger space on the main deck.

The side effect of the production technique of the 787 was that thinner sidewalls lead to the ability to seat 9Y, but that was a bit of an afterthought. But it's why I say that 3" more might have been worth it, as it wouldn't be an afterthought, 9Y would offer 17.5" seats instead of 17.2" and since most carriers seem to be interested in 9Y, that extra 3" might sway MORE customers to choose the 787 since they can provide a comfortable enough Y. Right now, there are likely some customer still in doubt: "should we offer 9Y that might be seen as tight and hurt us on word of mouth, or 8Y that will be seen as luxurious but may lose out on yields if people don't actually care as much as we think they might."
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 1:44 pm

The economics of the 'A330 as a stopgap' idea must look pretty bad, too. Airbus would have to commit to buying them back once the A350s were delivered. That begs the question of what they'd do with all those 'used' A330s afterwards.
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zvezda
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 2:14 pm

Quoting Khobar (Reply 40):
Airbus completed what appears to be a successful A380 evacuation test @853pax+20 crew, so unless there really is something inherently flawed in that aircraft, expect a number of new orders for the type.

You think airlines will suddenly start ordering WhaleJets just because it passed its evac test?!?!? Airlines will be deciding whether to buy WhaleJets based on a comparison with the new -8 JumboJet. They will be looking at CASM, purchase price, risk, etc.

Quoting Khobar (Reply 40):
And let's not forget that the 787/777 combination's power can easily be destroyed if the 787 falls even a hair short of expectations.

Hyperbole.

Quoting Khobar (Reply 40):
Just one screwup may affect the perception of the 787 as much as we've seen otherwise simple screw-ups affect the perception of the A380.

A two month delivery delay followed by a six month delivery delay, plus weight issues, wake turbulence issues, wing strength issues, etc. is not "a hair short of expectations."

Quoting Ikramerica (Reply 41):
storage for carts, etc., above the cabin

I've never heard any talk of galley cart storage above the cabin in a B787. Source?

Quoting Ikramerica (Reply 41):
The side effect of the production technique of the 787 was that thinner sidewalls lead to the ability to seat 9Y, but that was a bit of an afterthought.

9 abreast seating in the B787 was not an afterthought. From the moment Boeing settled on the B787's cross section, it was clear that charter airlines would fit 9 abreast seating. The surprise was how many scheduled carriers would also fit 9 abreast seating.
 
atmx2000
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 2:16 pm

Quoting Ikramerica (Reply 41):
The side effect of the production technique of the 787 was that thinner sidewalls lead to the ability to seat 9Y,

I don't think it was a side effect. I don't think the walls have yielded much more than a couple of inches of the 12" advantage the 787 has over the A330. Anyway, airlines like Air India indicated early last year that 9 abreast was a reason for choosing the 787, well before the recent realization that less insulation would be needed allowing cabin walls to be made thinner.

Quoting Ikramerica (Reply 41):
But it's why I say that 3" more might have been worth it, as it wouldn't be an afterthought, 9Y would offer 17.5" seats instead of 17.2" and since most carriers seem to be interested in 9Y, that extra 3" might sway MORE customers to choose the 787 since they can provide a comfortable enough Y.

It really depends on the aisle width they choose. They could shoot for 17.5" aisles and seats, or they can go for 18.5" aisles and 17.2" seats.
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JayinKitsap
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 3:24 pm

Quoting FlyDreamliner (Reply 14):
Where has the Airbus who brought us A300 and A320 gone? The brilliant and innovative Airbus. Now all we have is conservative, sluggish, indecisive Airbus. Old Airbus would have beat Boeing to the punch on 787, gone one further, developed new technologies. New Airbus changes their mind 7 times, and still tries to pawn off an updated A330 on us

Excellent post, Airbus has found that the sleeping giant finally woke up and the tables have turned. A decade ago the Phil C era at Boeing was worried about financial deals and perks. Other than the 777 launch which began well before the merger with McD, Boeing was very conservative, sluggish, and indecisive.

In the last few years Boeing has the following models/sub models in the works: 787-3, 8, 9, (10); 777LR, 777F; 747-8I & F; 737-900ER, and 737-700ER. That is far more than before. They have also changed their manufacturing system and have a new sales approach that appears to be working.

Boeing let the 767 get middle aged and didn't respond in a timely manner to the 330, giving a huge piece of the market to Airbus. Now they have started the campaign to regain old ground with the 787 as their lead product.

The composite fuse on the 787, once it settles into long term production has the potential to have relatively low unit production costs when compared to the labor and scrap involved in the old method.

The 787 poses a difficult challenge for Airbus to better.
 
PlaneHunter
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 3:47 pm

Quoting NAV20 (Reply 42):
The economics of the 'A330 as a stopgap' idea must look pretty bad, too. Airbus would have to commit to buying them back once the A350s were delivered. That begs the question of what they'd do with all those 'used' A330s afterwards.

Placing with other carriers, of course. Did you also wonder what would happen to all those B737 classics after the B737NG's introduction?


PH
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khobar
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 4:48 pm

Quoting Zvezda (Reply 43):
You think airlines will suddenly start ordering WhaleJets just because it passed its evac test?!?!? Airlines will be deciding whether to buy WhaleJets based on a comparison with the new -8 JumboJet. They will be looking at CASM, purchase price, risk, etc.

Yes, I do. CASM, purchase price, risk, etc. are not entirely unknown at this time if Airbus is being up front with the airlines, and I'm talking about airlines who would be looking at the A380 specifically.

Quoting Zvezda (Reply 43):
A two month delivery delay followed by a six month delivery delay, plus weight issues, wake turbulence issues, wing strength issues, etc. is not "a hair short of expectations."

These issues are not threatening the program. Yes there is a wake turbulence issue, the LIDAR revealed that without question, and yes there is a weight issue as Airbus has already stated, but these issues are affecting perceptions more than anything else, just as I said. The proof is the fact that while some airlines have made somewhat negative public statements regarding the A380, not one has cancelled. That, I think, speaks volumes.

Quoting Zvezda (Reply 43):
Quoting Khobar (Reply 40):
And let's not forget that the 787/777 combination's power can easily be destroyed if the 787 falls even a hair short of expectations.

Hyperbole.


I don't believe so. If the 787 were a "regular" aircraft wearing lipstick I'd agree, but it isn't. It's an all-new design vying to set the direction for the future of aircraft manufacture - much much more is at stake with this aircraft. Of course Boeing has a track record, but no track record with a civilian composite aircraft. If everything works out then Boeing is going to change the way things are done, and by the rumblings from Airbus re: composite fuselage for the A320 replacement, it sounds like they have the right play. But Airbus has already been trying to sow seeds of doubt, and if one thing, and if Boeing fumbles the ball anywhere along the way, Airbus is going to tell the industry "see, we were right." Being right can be far more damaging than being best.
 
sparkingwave
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RE: How Much Has Underestimating The 787 Cost Airbus?

Mon Mar 27, 2006 8:26 pm

Quoting Khobar (Reply 47):
The proof is the fact that while some airlines have made somewhat negative public statements regarding the A380, not one has cancelled. That, I think, speaks volumes.

No cancellations, but no significant new orders in 2005, and the order book still remains at less than 200. This also speaks volumes.

If the price of oil goes up again as we've seen in 2005, then the A330 and A340 (all versions) will be threatened.

I think it's amusing to read your what-if case of Boeing "fumbling" the ball on the 787, but you take for granted that Boeing, a company almost a century old, has more experience than Airbus in creating pioneering airplanes. They're also more experienced at taking calculated risks (707, 737, 747), and achieving success.

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DAYflyer
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RE: How Much Has Underestimating The 787 Cost Airbus?

Tue Mar 28, 2006 12:16 am

Quoting AirA380 (Reply 6):
Ultimately a330 and a343/342 will be replaced with a359/a358...and there would no need keep line of a330/a343...hence a345 & a346 won't be able to keep a340 line viable in economic terms so, it has to close. Having said that airbus is also thinking of extending a350 to compete with future 787-10 and 772.

A340E just won't happen!!!

A realistic assesment from where I sit.

Quoting BoeingBus (Reply 31):
Engineers at Airbus can figure out the 787 w/o having to read A.Net member's critiques. I think Airbus knows the 787 will be a better plane, in some respects but not all. IMO, Airbus is betting on price first and product second.

Airbus will most likely spend less on A350 R&D than Boeing's 787.

The same mistake that General Motors made with Toyota...price vs qaulity...qaulity won out.

Quoting CWFan (Reply 28):
but they're still selling hundreds of planes. 33 to 38% of the market isn't too bad.

No, last year they sold like 15 A-340 compared to 115 777's, or something like that. Thats about 10% market share, which is wholly abysmal.
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