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Tugger
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Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:22 am

This is from a Bloomberg news release! looks like its "Game On!"

Airbus to Spend $10 Bln on New Plane as Orders Sag, People Say -
Bloomberg - http://bloomberg.com/apps/news?pid=10000006&sid=a4vuThfwyLOQ

May 10 (Bloomberg) -- Airbus SAS, the world's largest aircraft maker, plans to spend about 8 billion euros ($10 billion) to develop a new 300-seat plane after ...

It will be interesting to see how everyone reacts to the biggest non-secret due to be revealed at the Farnborough Air Show. Also what Airbus says between now and then.

Tug
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PolymerPlane
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:29 am

It is going to be 2012. I am wondering how they are going to deal with current order, and the potential customers swing to Boeing because of the timeline.

No mention on the design change though. It will be very interesting.

First it was A330, then A330 slap new engines, then it was A350, and finally a complete new redesign. WOW B787 really pushes airbus around

[Edited 2006-05-10 19:31:15]
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:38 am

It looks like Boeing's "last Minute" change from the Sonic Cruiser to the 787 was right on. Probably had something to do with all those in depth and repeated meetings with customers when they were trying to sell the SC and kept getting told "No, we would prefer...".

Good thing Boeing actually listened.

And another question now is what will the new plane cost? I don't see how it can be cheaper. Cheaper to operate yes, but purchase cost?

Tug
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nijltje
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:38 am

I just love the competition.
 
DAYflyer
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:41 am

Airbus will seek government loans to cover 33 percent of the development cost of the new plane, said two people familiar with the proposal. The application might exacerbate a dispute between the U.S. and Europe over aircraft subsidies. The World Trade Organization has been asked to examine complaints by both the U.S. and the European Union against one another on the issue.

Its easy to it all over and over and over again when you get 1/3rd of the cost for free. At $8 Billion, that is a total of $2.64 Billion in "loans" from the EU.
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:45 am

An interesting thing will be how the WTO actions currently going on will affect the new A350 in the end. The case(s) will drag on for years (and years........ and years) but should be resolved before the new planes EIS.

Tug
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airbazar
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 2:58 am

Quoting DAYflyer (Reply 4):
Its easy to it all over and over and over again when you get 1/3rd of the cost for free. At $8 Billion, that is a total of $2.64 Billion in "loans" from the EU.

I'm not sure what language you speak, but in my language, loan and gift are two different things. I'm willing to guess that even you have used a loan to buy your car and I doubt you go around saying you got your car for free  Smile
 
RichardPrice
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:02 am

Quoting DAYflyer (Reply 4):
Its easy to it all over and over and over again when you get 1/3rd of the cost for free.

How many times is this crap going to be repeated? Launch Aid gains interest at varying percentages, has repayment deadlines for milestone completions and based on historical UK loans, probably perpetual royalties attached as well, it is not 'free'.

However, unless Airbus continue to keep the new design under the A350 moniker, its unlikely Airbus will seek aid. Legally they can seek aid for the A350 programme under the 1992 agreement because the programme was started before the US withdrew from the agreement.

Im only making this post to try and clear up misconceptions put forward by someone else, please lets not make this thread into an aid war.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:09 am

Quoting Nijltje (Reply 3):
I just love the competition.

This sums it up nicely. With a two way competition for airliner sales, both A and B are kept honest. Neither can afford to get arogant and tell the customer what they want. Instead... they will listen. Today its about $70/bbl oil, lie flat seats, IFE, cargo, and reduced costs of ownership.  spin 

I'll state again that I believe that expensive oil is going to force an acceleration of aircraft develpment and reduce the median airframe life due to the need to jump to the newest equipment. High fuel burn translates into reduced payload, increased MX expenses, and (of course) high fuel bills.

Now don't write Airbus off. The A330 (via the A332) was late to the trans-Pacific market (vs. the 763ER), but look how well it did in the end. (Yes, smaller sales, but still excellent sales.) One SQ or EK sized order will put the A350 (A370?) back on the map.

But then again, IIRC 2010 is when the 2nd 787 line gets going. By 2012, both 787 lines will be humming. That makes Boeing a tough nut to crack. Let me explain a bit further. Due to 787 sales, the engineering will have already been amortized or be so low per airframe to no longer impact the sales price. I also fully expect that by 2012 Boeing will launch another carbon fiber airframe. It could be the 737RS and perhaps *another* 787 (I expect a HGW 789, but let us see how the market develops. Six years is an eternity in aerospace engineering.)

Personally, I think Airbus should focus on the A320NG as soon as possible. Do two versions. A low MTOW version with ~3,200nm range and a ~4,500nm range version. But that's my opinion.

This will be interesting!  bigthumbsup 

Lightsaber
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:21 am

I must admit that was not my intent

Quoting RichardPrice (Reply 7):
please lets not make this thread into an aid war.

I must admit that was not my intent but I did realize it would come up (of course). The thing I wish people would get through their thick heads is that WE don't have to solve it. The respective agencies pursuing it will. Each side has it's case and it is being presented to an impartial third party (which we definitely are not) who will review and decide on it. I wish we could discuss things calmly and politely and not get.... well..... mean. I can present some points too but I know I will get attacked and begin a battle discussion.

The main thing is that I finally saw what I believe to be credible information, not just rumors and hearsay, that Airbus is moving forward and changing the A350.

Tug
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Ken777
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:22 am

$10 Billion? Isn't the 787 costing $8 Billion? If this is true then the first question I would as is why would the new plane cost 25% more than the 787 to develop? It might be that the are folding the money already spent on the 350 program into the total cost of the program.

Overall it might be a good move for Airbus as long as they can react strongly to any release of Y1. It certainly going to be interesting to see what they come up with and how the airlines respond.
 
PolymerPlane
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:24 am

Quoting RichardPrice (Reply 7):
How many times is this crap going to be repeated? Launch Aid gains interest at varying percentages, has repayment deadlines for milestone completions and based on historical UK loans, probably perpetual royalties attached as well, it is not 'free'.

Yes, but isn't the loan only repayable if Airbus has actually profit from A350?. So it actually reduces the project risk, thus making it easier to attract investor, since their investment expected value is much higher than if it were without launch aid.

Now Airbus is the leader in airplane manufacturing, I do not think launch aid is appropriate anymore. Wasn't the main purpose of launch aid to level the playing field between newly emerged Airbus with well established Boeing, since Boeing will never get a launch aid from US Government?

Cheers,
PP
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slz396
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:29 am

Quoting Tugger (Reply 9):
The main thing is that I finally saw what I believe to be credible information, not just rumors and hearsay, that Airbus is moving forward and changing the A350.

May I suggest that based on this piece of credible information and until Airbus officially announces the name of their new widebody plane, most probably at Farnborough, we refer to it as the A3X0?

I don't think the name has already been used in the past, contrary to 'A3XX' for what became the A380 and 'A30X' for the A300 successor and that way, we can avoid having misunderstandings about what A350 people are talking about. Over the past few days I've seen it already several times an interesting discussion because totally pointless because people simply weren't talking about the same plane!

I thus propose:
A350 for the current version, which looks to be shelved.
A3X0 for the upcoming all new plane.

What do you all think?
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:30 am

Quoting PolymerPlane (Reply 11):
Yes, but isn't the loan only repayable if Airbus has actually profit from A350?. So it actually reduces the project risk, thus making it easier to attract investor, since their investment expected value is much higher than if it were without launch aid.

No, its a myth perpetuated on forums but there has never EVER been any evidence put forward to support the claim. Its unsubstantiated, basically all the evidence (maximum repayment period of 17 years, minimum percentage of repayment over the certain first X number of aircraft) shows that the aid is repayable regardless of how the project does financially.

Quoting Tugger (Reply 9):
he thing I wish people would get through their thick heads is that WE don't have to solve it.

I agree, this is not something for us to solve and no good can ever come from persuing a discussion on the matter.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:40 am

Quoting Lightsaber (Reply 8):
Personally, I think Airbus should focus on the A320NG as soon as possible. Do two versions. A low MTOW version with ~3,200nm range and a ~4,500nm range version. But that's my opinion.



Quoting Ken777 (Reply 10):
Overall it might be a good move for Airbus as long as they can react strongly to any release of Y1. It certainly going to be interesting to see what they come up with and how the airlines respond.

I personally think this is a dangerous move for Airbus, that they were suckered into it by several very astute customers. That they would have made a fine return on their investment and be ready for the next battle. But they definitely know better that I do and I know that they examined this to death.

I guess the thing to remember is that even though they will now be possibly several years behind Boeing in the releases of each class of "new" aircraft, that was the case when they began and it served them quite well. They were able to hear what the complaints were on the Boeing class variant and respond with a slight better variant (yes, each market/customer has its own definition of what is "better" but you get my point). We'll see!

God I LOVE competition!

Tug
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wjcandee
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:44 am

Quoting Slz396 (Reply 12):
May I suggest that based on this piece of credible information and until Airbus officially announces the name of their new widebody plane, most probably at Farnborough, we refer to it as the A3X0?

Maybe it should be the A3E0??
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:45 am

Quoting RichardPrice (Reply 13):
No, its a myth perpetuated on forums but there has never EVER been any evidence put forward to support the claim. Its unsubstantiated, basically all the evidence (maximum repayment period of 17 years, minimum percentage of repayment over the certain first X number of aircraft) shows that the aid is repayable regardless of how the project does financially.

No, it is not only a myth in this forum. A Google search on launch aid results in several article regarding this matter. To quote one article from US trade representative:

Quote:
If the sales of a particular model are less than expected, Airbus does not have to repay the remainder of the financing.

http://www.ustr.gov/Document_Library...Step_in_Airbus_WTO_Litigation.html

Remember we are not talking about what has happened in the past to these loans, but it is about future analysis of the investor and risk assessment of the project.

Cheers,
PP
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ikramerica
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:47 am

Quoting Tugger (Reply 2):
Good thing Boeing actually listened.

Seems like Airbus didn't, and now is paying the price.

Their initial reaction said it all. A330 is good enough, maybe new engines. But A330 was not selling like hotcakes (just a good product with solid sales) and lacked range and features. Boeing spent years working with major customers figuring out what they wanted, and then offered it to them, while Airbus was acting like the Boeing of 10 years ago...

The worm has turned.
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 3:52 am

I wouldn't mind seeing a direct twin-engined 777 competitor from Airbus, as long as it looks nothing like the A300/A310/A330/A340. IMO the A350 looks like an A330 and its hard for me to get excited over it when it just looks like something of the same except radically updated on the inside. If the A370 were to look different I would be thrilled.
NWA   N O R T H W E S T A I R L I N E S
 
RichardPrice
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:00 am

Quoting PolymerPlane (Reply 16):
http://www.ustr.gov/Document_Library...Step_in_Airbus_WTO_Litigation.html

Remember we are not talking about what has happened in the past to these loans, but it is about future analysis of the investor and risk assessment of the project.

Thankyou, thats the first official mention Ive seen of that, and I still believe it to be false.

After the last A.net thread on this, I went to the trouble of paying £29.99 + VAT for the British Department of Trade and Industry to send me a photocopy of the UKs RLI agreements for the A380 project, and nowhere in there does it have a programme performance clause allowing Airbus to stop repayment if the sales are poor.

Its known that the A300 and A310 launch aid repayment was payable per aircraft delivered, with balance payable on the programmes closure (its been mentioned in several threads on here), but little else is known about the programmes before the 1992 agreement was finalised.

The 1992 agreement certainly did not have such a clause in it, although I am waiting on a copy of that to arrive, along with the 1982 Civil Aviation Act which the A320 and A330/340 loans were made to Airbus.

Remember that Boeing is welcome to apply for the same RLI as Airbus, it is not unilateral.
 
CX747
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:04 am

Competition is great when the competitors compete on a level playing field. 30+ years of government support to get one of the competitors "equal" to the other is not competition. It's called I want what you have.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
deltadc9
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:04 am

Quoting Airbazar (Reply 6):
I'm not sure what language you speak, but in my language, loan and gift are two different things. I'm willing to guess that even you have used a loan to buy your car and I doubt you go around saying you got your car for free

Not a good analogy IMHO.

It would be no different that going to a bank for a small business loan without collateral, if you fail they don't get paid. Quite a competitive advantage (while you are in business) due to the fact that your credit rating as a business is based in risk factors, and these kind of deals reduce your risk.

Quoting RichardPrice (Reply 7):
How many times is this crap going to be repeated? Launch Aid gains interest at varying percentages, has repayment deadlines for milestone completions and based on historical UK loans, probably perpetual royalties attached as well, it is not 'free'.

Source please?

Quoting PolymerPlane (Reply 11):
Yes, but isn't the loan only repayable if Airbus has actually profit from A350?. So it actually reduces the project risk, thus making it easier to attract investor, since their investment expected value is much higher than if it were without launch aid.

Exactly.

Now Airbus is the leader in airplane manufacturing, I do not think launch aid is appropriate anymore. Wasn't the main purpose of launch aid to level the playing field between newly emerged Airbus with well established Boeing, since Boeing will never get a launch aid from US Government?

People want to forget that, shhhhh!  whistleblower 
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zvezda
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:11 am

Quoting DAYflyer (Reply 4):
Its easy to it all over and over and over again when you get 1/3rd of the cost for free. At $8 Billion, that is a total of $2.64 Billion in "loans" from the EU.

That's not how it works. You make it sound like european governments put a gun to the taxpayer's head and say "Open your wallet and give the money to Airbus. You won't ever see it again." What really happens with "launch aid" is the european governments put a gun to the head of the taxpayer and say "Open your wallet and give the money to Airbus. It will be repaid with interest (below market rates) but only if Airbus sells their planes. Oh, and they pay it back to us, not to you, so you won't ever see it again."
 
RichardPrice
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:12 am

Quoting DeltaDC9 (Reply 21):
Source please?

Certainly.

Quote:

On the one hand, the agreement puts a ceiling on the amount of direct government support (33% of the total development costs) for new aircraft programmes. It establishes that such support (granted in the form of launch investments, which are repayable royalty-based loans) will be repaid at an interest rate no less than the government cost of borrowing and within no more than 17 years. Basically, this discipline applies to the form of government support mainly in use in Europe.

On the other hand, the agreement establishes that indirect support ( e.g. benefits provided for aeronautical applications of NASA or military programmes) should be limited to a 3% of the nation's LCA industry turnover. This discipline is primarily targeted at the support system in use in the US. In contrast to the European system of repayable launch investment there is no requirement for indirect support to be reimbursed and the generous ceiling of 3% is calculated on the larger basis of the turnover of the LCA industry and applies per individual year.




Quote:

Airbus pays royalties to governments over the entire life of the aircraft programs. Interest and principal is repaid on deliveries, even before the programs break-even and irrespective of the sale price

EU – US Agreement on Large Civil Aircraft 1992: key facts and figures

Quote:

— Restriction of launch aid to 33 percent of total development cost, with 25 percent to be repaid at the cost of government borrowing and the remaining eight percent to be repaid at the cost of government borrowing plus one percent;

— A maximum reimbursement period of 17 years, and 20 percent of the repayments to be made over the first 40 percent of aircraft deliveries (and 70 percent over the first 85 percent);

— An overall limit per annum on indirect support equivalent to three percent of the civil aircraft industry's annual commercial turnover in the country concerned and four percent of the annual commercial turnover of any one firm; and

— Controls on general purpose loans and sales inducements.[174]

House of Commons Trade and Industry Fifteenth Report


Ahha, no need to wait for the 1992 agreement to be delivered, here it is -

http://europa.eu.int/eur-lex/lex/Lex...o?uri=CELEX:21992A1017(01):EN:HTML

[Edited 2006-05-10 21:21:35]
 
slz396
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:15 am

Some interesting stuff from the Bloomberg article:


As Airbus failed to reach its target of 200 A350 orders last December, the planemaker began exploring possibilities for an all-new plane, the people said.
EADS, the parent of Airbus, gave initial approval in mid-April and will make a firm decision this month, said the people, who declined to be identified until a decision is announced.


This means all the negative comments towards the A350 from several airlines and ILFC were indeed meant to persuade Airbus to go ahead with their plan of an all new plane, totally unknown to us at A.net, rather than to simply bash the manufacturer for their arrogance, their inability and what else...

Knowing John Leahy has been pushing for an all new plane to simultaneously deal with the 787 and the A340 problem, it is a safe bet to say the reason we haven't heard much from him over the last few months to defend the 'old' A350 was precisely because he was hoping for this outcome!


From the beginning of the 787 program we fully anticipated that they would have a viable competitor,'' said Mike Bair, chief of Boeing's 787 program. I can't wait to see what they come up with.''

I think it would have been foolish of Boeing NOT to have expected some sort of strong reaction from Airbus, but I think from the words "viable competitor" it shows they were expecting a true 787 competitor along the profile lines of the last version of the A350, NOT a plane which is set to wipe away the entire 777 product range instead.

I wonder if they'd anticipated this kind of reaction were it looks as if it will come now?


"It'll be expensive and they'll have to admit they made mistakes,'' said Richard Aboulafia, but Airbus is finally targeting exactly the right spot in the market.''

I think so too.

It looks like they've decided to do what some have said they should do all along: Let Boeing take the low end of the wide body market which Airbus now holds with their A332 at the price of loosing the more lucrative high end held with the Boeing 773ER, thus simply changing the dominant positions in the market as it were while at the same time 'resolve' the A340NG problem.


The new plane would also be called A350 and airlines that ordered the earlier model will be able to switch to the new version. Airbus will offer the new plane in three models: the A350-800, which will seat around 250 passengers, the A350-900, seating around 300, and he A350-1000, that will carry 350. The third version might help Airbus "leapfrog'' Boeing's widebody family by providing sufficient capacity and range to compete with the 777-300ER, Aboulafia said.

Looks like Boeing will have to either start on the Y3 really soon, ten years sooner than originally planned and thus face some painful decisions on their 747-8 too, or simply go for the 787-10 (and -11 if possible) with the disadvantage of offering a much narrower and less comfortable plane and we all remamber Mr. baseler explain just how important it is to have the widest cabin (ironically 'on long haul planes only').


An announcement on the new plane and its customers may come at the Farnborough International Air Show, which opens July 17.

From this it seems like Airbus have secured a launch customer (if you can speak of that when the plane is still called 'A350') for the all-new bigger version. Could this explain why SQ has again not ordered the 787 yesterday for instance?
Incedently the A350-1000 also 'solves' the problem Emirates had with the inferior A340-600s on firm order, so it would be a good move from Airbus to let them convert their order since I think this would makes the chance to see any 787 at Emirates pritty slim! How many were they thinking off: 100? I am beginning to understand the business case for the decision to spend a 4 billion euro more!

Interesting times indeed!

[Edited 2006-05-10 21:30:38]
 
CX747
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:16 am

The vast majority of loans made to Airbus have been made at lower than market rates. PROOF of actually paying off all of their loans with interests has never been given. Airbus makes great aircraft that are equal competitors to Boeing's stable. Unfortunately though, this is not competition. As an earlier poster stated, "I thought launch aid was given to Airbus so that they could reach an equal market share?" Competition was Boeing vs McDonnell Douglas vs Lockheed.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
deltadc9
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:21 am

Quoting RichardPrice (Reply 23):
Certainly.

Thanks, I think providing sources on issues such as these prevent a lot of wasted time. Assuming you are not omitting facts to the contrary, how did a myth the proportion of this one get started with zero basis in fact? Almost always there is some truth to a myth. I myself have read articles that said the exact opposite, that 100% repayment may never happen if the project does not break even.

I think the fact remains that that the terms are quite favorable and it does reduce Airbus risk and provide a competitive advantage (unfair advantage is another argument).
Dont take life too seriously because you will never get out of it alive - Bugs Bunny
 
RichardPrice
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:32 am

Quoting DeltaDC9 (Reply 26):
Thanks, I think providing sources on issues such as these prevent a lot of wasted time. Assuming you are not omitting facts to the contrary, how did a myth the proportion of this one get started with zero basis in fact? Almost always there is some truth to a myth. I myself have read articles that said the exact opposite, that 100% repayment may never happen if the project does not break even.

I think the US in this regard may be possibly pointing to clauses in the A320 programmes RLI, the details of which I have never seen and the terms of which have, as far as I know, never been made public. I have however read the 1982 Civil Aviation Act, under the terms of which the A320 RLI was issued, but that also has no 'non repayment' clause. The UK Parliament records on the website only go back as far as the early 1990s, so I cant point to a address for that. Once I have it, I shall scan it and put it up somewhere.

Unfortunately for the US delegation, the A320s RLI was issued in the 1980s, well before the WTO Subsidies Agreement came into force in 1995 and the WTO cannot rule on subsidies received prior to its agreement coming into force. This aid is also not governed by the 1992 LCA agreement.

In the 1992 LCA agreement, there is no clause for obligatory nonpayment on programme failure. There is a clause stating that both parties have to be made aware upon nonpayment or changes of payment terms or amounts, but thats it.
 
Ken777
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:33 am

Quoting Slz396 (Reply 24):
Looks like Boeing will have to either start on the Y3 really soon, ten years sooner than originally planned and thus face some painful decisions on their 747-8 too

Interesting thought. I don't, however, think that Boeing is in that bad a position, regardless of what Airbus does with the new plane.

First, the 787 is moving right along and has a nice bundle of orders so I think that one is on the right track.

Secondly, Boeing is in a good position to wait and see what Airbus commits to on the new plane (and the orders it generates) before deciding on Y1 or Y3. A move on Y3 would directly counteract Airbus with the 3X0, while a move on Y1 would force Airbus to have two very major clean sheet programs going without government aid (which I don't think they will get).

I understand the issues related to Y1 engines, but believe that the single aisle market is strong enough, and the recent increases in fuel prices high enough, for new engines to now be a high priority for their makers. Any engine maker not putting a high priority on meeting the needs of this market is going to miss out on a lot of opportunities.

Personally, I love the competition and hope that Boeing makes a counter move over the next 12 - 18 months that will stir the pot yet again.
 
DAYflyer
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:36 am

I just read that Airbus is denying that a decision to re-do the A-350 has not yet been taken.
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Tugger
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:42 am

Quoting Ken777 (Reply 28):
Personally, I love the competition and hope that Boeing makes a counter move over the next 12 - 18 months that will stir the pot yet again.

I think that Boeing should wait until AFTER the 3X0's design freeze to stir their pot publicly. Of course that wouldn't stop me from publicly stirring a few stories to confuse the waters and make the competition dance a bit.

THAT's what I would do.

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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:47 am

This may be slightly off topic and I have asked a similar question before, please don't give me a hard time for this question as I really struggle to see what the problem is.

Why does the WTO have any power to impose restrictions on Uk goverment grants(launch aid) paid to airbus to preserve Uk jobs? Surely this is an issue for the UK goverment to decide weather this is a good way to spend my tax money. I belive they have supported other industries with money in the past and do not believe it is any others countries business what the Uk goverment does with my tax money. This is just my opinion and I do not wish to annoy anyone by asking the question. Any other country is free to support any industry it wishes as it is their decision and nothing to do with the UK.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:48 am

Quoting DAYflyer (Reply 29):
Airbus is denying that a decision to re-do the A-350 has not yet been taken.

Like I said this was the first, what I BELIEVE to be, credible article that I had seen. Bloomberg is stating that they are getting this from people inside Airbus.

Now that could be John Leahy orchestrating his own "stirring" to continue to push Airbus management to a new 3XO. Now THAT would be a brilliant power play from within to get what he wants.

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slz396
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:48 am

Quoting Ken777 (Reply 28):
Boeing is in a good position to wait and see what Airbus commits to on the new plane (and the orders it generates) before deciding on Y1 or Y3.

Obviously Boeing shall now play exactly the same game Airbus did over the last 2 years: first play down the problem on hands, see how the market responds to it, try to counter it as cheaply as possible (because as you say, there is still that Y1 project which need to be started right after the 787) and only in last instance, decide for the full counter offensive.

It'll be very amusing to see how those who have bashed Airbus on their A350 over the past few years, face near IDENTICAL comments when they hold up their 'old' 773ER or 'narrower' 787-10.

Quoting Ken777 (Reply 28):
A move on Y3 would directly counteract Airbus with the 3X0, while a move on Y1 would force Airbus to have two very major clean sheet programs going without government aid (which I don't think they will get).

Unless you think Boeing can do 2 all new designs as once, a move from Boeing on Y3 keeps the A320 bringing in tons of money for at least a decade more to come: I think this is not a bad outlook for airbus, as many say it is precisely this plane which keeps the entire company afloat when expenditure is high (A380) and some product sales are dissapointing (A340)
Alternatively, a move on Y1 means Boeing gives away its biggest money maker, the 773ER, so again: that looks like a nice outlook for Airbus.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:51 am

Quoting Leelaw (Reply 31):
OMG, has the the lion laid-down with the lamb, a fervent Airbus supporter is agreeing with the "Great Satan" Aboulafia?

Excuse me?

When did I became a fervent Airbus supporter?

Being interested in what Airbus does, is completely different from being a supporter of what they do!

If you'd have said 'Aboulafia sceptic' I'd fully agree with you, but it is a given fact sometimes even the most twisted people make a valid point!

[Edited 2006-05-10 21:54:18]
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:54 am

Quoting Ncfc99 (Reply 32):
Why does the WTO have any power to impose restrictions on Uk goverment grants(launch aid) paid to airbus to preserve Uk jobs?

Because as a member of the WTO the UK is obligated to follow the WTO fair trade rules. If you want to me a member of the organization, you have to follow the rules. The WTO is not "imposing" anything. The UK has agreed to those rules as a condition of membership.
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:56 am

Quoting Slz396 (Reply 35):
but sometimes even the most twisted people make valid points!

Like many of the A.netters here!  Cool
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 4:57 am

Quoting Ncfc99 (Reply 32):
Why does the WTO have any power to impose restrictions on Uk goverment grants(launch aid) paid to airbus to preserve Uk jobs?

It's probably to do with the fact that the UK signed up to the WTO and have some kind of 'conract'/'agreement'?
But I don't know anything about it really, so I'd better keep  shhh 
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:07 am

Quoting Ncfc99 (Reply 32):
This may be slightly off topic and I have asked a similar question before, please don't give me a hard time for this question as I really struggle to see what the problem is.

Why does the WTO have any power to impose restrictions on Uk goverment grants(launch aid) paid to airbus to preserve Uk jobs? Surely this is an issue for the UK goverment to decide weather this is a good way to spend my tax money. I belive they have supported other industries with money in the past and do not believe it is any others countries business what the Uk goverment does with my tax money. This is just my opinion and I do not wish to annoy anyone by asking the question. Any other country is free to support any industry it wishes as it is their decision and nothing to do with the UK.

Well, first of all, you signed onto the treaty that established the WTO. That means theoretically that the weeto is the dispute resolution mechanism for trade hassles. To date there's been a lot more dispute than resolution, methinks.

As I recall from law school the idea was to first eliminate tariff barriers to trade and to then move on to eliminate non-tariff barriers to trade. These would be on the order of subsidies that distort trade. Fine example is the effort by the developing world to get the US and Europe to give up their agricultural subsidies that artifically depress ag commodity prices worldwide and make farmers in places that do not have subsidies uncompetitive.
F'rinstance. Our USDA pays money to farmers when the cost of commodity crops they produce declines below a certain predetermined level, through commodity loans. Then the grain goes into storage and is owned by the US. That makes it more difficult to grow corn and sell it in the rest of the world, because it is a global market in commodities.

Given our budget deficit here, one can see that stuff in the budget that costs money is on the block-which may explain why the USTR is so willing to put farm subsidies on the table. The French, on the other hand don't like the idea one bit as they see an agricultural sector as an inherent and inseparable part of la belle France, so to speak.
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:07 am

Quoting 11Bravo (Reply 36):
Because as a member of the WTO the UK is obligated to follow the WTO fair trade rules. If you want to me a member of the organization, you have to follow the rules. The WTO is not "imposing" anything. The UK has agreed to those rules as a condition of membership.



Quoting A319XFW (Reply 39):
probably to do with the fact that the UK signed up to the WTO and have some kind of 'conract'/'agreement'?
But I don't know anything about it really, so I'd better keep

Thanks for the replies. That does make sense. Do you happen to know what the fair trade rules are that apply to the airline manufacturing industry? Are these rules for this industry only or all industrys? I believe the UK goverment has helped the car manufacturing industry at the expense of other countries manufacturers. Would the WTO have to decide on this issue too?
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:08 am

Quoting PolymerPlane (Reply 1):
First it was A330, then A330 slap new engines, then it was A350, and finally a complete new redesign. WOW B787 really pushes airbus around

In just what sense did the 787 "push" Airbus into the A330? The A330 was launched in the 1980s! Arguably, it was the A330(-200) that "pushed" Boeing into the 787.

Quoting CX747 (Reply 20):
Competition is great when the competitors compete on a level playing field. 30+ years of government support to get one of the competitors "equal" to the other is not competition.

Please explain how Europe was ever going to break into a market dominated by two/three American manufacturers who enjoyed exclusive access to contracts for the likes of the C-141, C-5, KC-135, KC-10, not to mention vast defence budgets.

And then please explain how European loans to Airbus are uniquely evil compared to Japanese (MITI) advantages handed to manufacturers of TVs, motorcycles, cameras, cars, etc.

The reality is that the Adam Smith free market has never really existed anywhere - including the USA - and that governments of all colours have always done whatever they wished to do to protect domestic jobs, industries, companies, and technologies.

For example, since when did NASA freely share its knowledge with Swedish, Korean or Chinese companies?

Why did Congress vote some years back to throw money at Boeing for a couple of hundred 767 tankers? Was it a coincidence that Boeing were going through a rough time selling their civil aeroplanes? On just which side of the Atlantic was the term "Pork Barrel" invented?

The idea that saintly Boeing plays "fair" while the dastardly Europeans prop up their inevitably inferior companies with unfair breaks is a tired myth. Drop it.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:09 am

Quoting Ncfc99 (Reply 32):
Surely this is an issue for the UK goverment to decide weather this is a good way to spend my tax money.

No, it's your money. You should decide how to spend it. The idea that government bureaucrats better know how to spend your money than you do is absurd. If you want to freely lend money to Airbus under mutually agreeable terms, that's fine. If you don't want to lend money to Airbus or you don't like the terms, you should be free to take your money elsewhere.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:13 am

Quoting Zvezda (Reply 43):
No, it's your money. You should decide how to spend it. The idea that government bureaucrats better know how to spend your money than you do is absurd. If you want to freely lend money to Airbus under mutually agreeable terms, that's fine. If you don't want to lend money to Airbus or you don't like the terms, you should be free to take your money elsewhere.

But one could apply this reasoning to other government expenditure like defence, street building etc.
But I think we're digressing a bit here from the topic of the new aircraft?
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:21 am

Quoting RichardPrice (Reply 23):
— An overall limit per annum on indirect support equivalent to three percent of the civil aircraft industry's annual commercial turnover in the country concerned and four percent of the annual commercial turnover of any one firm; and

— Controls on general purpose loans and sales inducements.[174]

House of Commons Trade and Industry Fifteenth Report


Ahha, no need to wait for the 1992 agreement to be delivered, here it is -

http://europa.eu.int/eur-lex/lex/Lex...o?uri=CELEX:21992A1017(01):EN:HTML

Ah, Yes, I do love to read the ACTUAL document and see what it says. Talk about loopholes big enough to drive the Queen Mary II through:


    4.3. Royalty payments per aircraft shall be calculated at the time of commitment of the development support to be repaid on the following basis:

    (a) 20 % of aggregate payments calculated in accordance with Article 4.2 is payable on the basis of the delivery of a number of aircraft corresponding to 40 % of forecast deliveries;

    (b) 70 % of aggregate payments calculated in accordance with Article 4.2 is payable on the basis of the delivery of a number of aircraft corresponding to 85 % of forecast deliveries.

"Let's see, the forecast for the A380 is 2,500 planes, we sold 159, or so that is 6.36% of forecast. That means we got another 1000-159 or 841 planes to sell AND DELIVER before the first 20% is due." Right!

Talk about sweetheart contracts -- what the #### does "forecast deliveries" mean? Man I would love to have this contract for my "loans". And I could be out of business in 17 years before the first penny is due.
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:25 am

Quoting Zvezda (Reply 43):
No, it's your money. You should decide how to spend it. The idea that government bureaucrats better know how to spend your money than you do is absurd. If you want to freely lend money to Airbus under mutually agreeable terms, that's fine. If you don't want to lend money to Airbus or you don't like the terms, you should be free to take your money elsewhere.



Quoting A319XFW (Reply 44):
But one could apply this reasoning to other government expenditure like defence, street building etc.

I trust my goverment to know the best way to run the country,(maybe trust is the wrong word), and spend my tax £'s as they see fit.

Quoting A319XFW (Reply 44):
But I think we're digressing a bit here from the topic of the new aircraft?

We probably are, I hope that Airbus can build some planes that give the 777 & 787 a run for their money as I to like the compertition.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:37 am

Quoting PM (Reply 42):
Please explain how Europe was ever going to break into a market dominated by two/three American manufacturers who enjoyed exclusive access to contracts for the likes of the C-141, C-5, KC-135, KC-10, not to mention vast defence budgets.

If the subsidies go through Airbus will in most likelyhood not be able to attain the all or some of the USAF tanker contract worth $20 billion.

Quoting PM (Reply 42):
For example, since when did NASA freely share its knowledge with Swedish, Korean or Chinese companies?

I guess that you haven't heard that Airbus is looking to work with NASA.
 
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:40 am

Quoting 11Bravo (Reply 36):
Because as a member of the WTO the UK is obligated to follow the WTO fair trade rules.

As is the US, but it choses to ignore WTO rulings that go against it (Canadian lumber is a case in point).

Quoting Poitin (Reply 45):
Talk about loopholes big enough to drive the Queen Mary II through:

Regardless, the US agreed to this and until they unilaterally withdrew, the same deal was available to Boeing.
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deltadc9
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:49 am

Quoting Poitin (Reply 45):
"Let's see, the forecast for the A380 is 2,500 planes, we sold 159, or so that is 6.36% of forecast. That means we got another 1000-159 or 841 planes to sell AND DELIVER before the first 20% is due." Right!

If this is true, then I see what the hub bub is all about.

Quoting PM (Reply 42):
On just which side of the Atlantic was the term "Pork Barrel" invented?

First of all, use the term pork barrel correctly please. Pork barrel politics refers to adding on unrelated line items to a bill at the last minute or at the point when the bill is sure to pass.

The tanker deal was nothing of the sort, it was simply the #2 defense contractor getting a bone while the #1 defense contractor is up to their ears in contracts.

Quoting PM (Reply 42):
For example, since when did NASA freely share its knowledge with Swedish, Korean or Chinese companies?

NASA research on commercial aviation is public domain. They have no interest in not sharing data that has no military application.

Here is just a brief overview of shared research:

http://oea.larc.nasa.gov/PAIS/Concept2Reality
Dont take life too seriously because you will never get out of it alive - Bugs Bunny
 
deltadc9
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:51 am

Quoting Scbriml (Reply 48):
the same deal was available to Boeing.

Source? There is no federal lauch aid available to any manufacturer as far as I know.
Dont take life too seriously because you will never get out of it alive - Bugs Bunny
 
11Bravo
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RE: Airbus To Spend $10 Bln On New Plane

Thu May 11, 2006 5:56 am

Quoting Scbriml (Reply 48):
As is the US, but it choses to ignore WTO rulings that go against it (Canadian lumber is a case in point).

You're absolutely correct, and at some point I expect there will be an accounting for that, but maybe it would be more appropriate to discuss Canadian lumber in the non-av forum. BTW, do you ever make posts that consist of something other than your obvious and seemingly endless disdain for the United States?
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