katekebo
Posts: 678
Joined: Sat Apr 14, 2001 12:02 am

Cost Of Airbus Delays

Mon May 15, 2006 11:34 pm

How much will the delays in delivery dates of the A380 and re-schedule of A350 EIS will really cost Airbus?

First, they delayed the entry in service of the passenger A380 with Singapore and Emirated by 6 months (supposedly because of the complexity of the sophisticated interiors).

Now FedEx will get their A380F 6 months later (damn FedEx with their sophisticated interiors).

Also, the re-design of the A350 will have an impact of the delivery dates of the A350s sold to-date. Quoting myself from another thread:

The A350s sold so far were probably offerred at substantial discount and/or favorable financial terms. I'm not implying that Airbus gave away these airplanes for free, but lower price was probably the only real advantage that Airbus could offer for the "old all new" A350 against the B787, which is (was) a superior airplane from the technical standpoint. Also, its pricing structure was based on an estimated $4b development cost - now that the development cost has doubled, it could mean that these 100 or so A350 were sold below their actual cost.

On top of the pricing issue, Airbus will have to compensate the airlines for delivering the airplanes later than originally committed.

Now, the "new all new" A350 is superior than the "old all new" one so it probably can be priced higher - however I don't think Airbus "popularity" with airlines would increase if they tell the customers who bought the A350 that they have to pay more for the airplane they already bought.

So while the "new all new" A350 is a move in the right direction to compete against the B787, the first 100 airplanes sold so far could actually represent a substantial financial loss to Airbus.
 
jonathan-l
Posts: 394
Joined: Thu Mar 28, 2002 4:20 am

RE: Cost Of Airbus Delays

Mon May 15, 2006 11:42 pm

Quoting Katekebo (Thread starter):
How much will the delays in delivery dates of the A380 and re-schedule of A350 EIS will really cost Airbus?

Several airline CFO and Airbus CFO may know the answer regarding the A380 delays and even if they read the forum, they wouldn't give you an answer. The rest will be baseless speculation.
Regarding the A350, it will be even more speculative.

[Edited 2006-05-15 17:13:54]
 
11Bravo
Posts: 1678
Joined: Tue Feb 15, 2005 8:54 am

RE: Cost Of Airbus Delays

Tue May 16, 2006 12:12 am

Quoting Katekebo (Thread starter):
So while the "new all new" A350 is a move in the right direction to compete against the B787, the first 100 airplanes sold so far could actually represent a substantial financial loss to Airbus.

That may be true, but I doubt we'll get any sort of definitive answer answer from Airbus on this.

I am assuming that Airbus has determined that the cost of continuing with the existing A350 program is outweighed by the benefit of cancellation and redesign. It's hard to imagine why they would take this course if that wasn't the case. They've lost some money thrashing around with the A350 program I'm sure, but they can make up for that by coming to the table with a genuinely competitive design. The real cost for them is the lost opportunity because they didn't do that two years ago. That, and some fairly serious damage to their reputation and credibility.
WhaleJets Rule!
 
DAYflyer
Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

RE: Cost Of Airbus Delays

Tue May 16, 2006 1:02 am

About 400 lost sales to Boeing to date for the A-350 at a profit of say $10 million per frame = $400,000,000 to date. No small potatos.
One Nation Under God
 
UKCO
Posts: 70
Joined: Fri May 12, 2006 10:15 am

RE: Cost Of Airbus Delays

Tue May 16, 2006 1:24 am

No-one will be able to give a definitive answer but I'm sure at least one person will definitively tell us how bad airbus strategy is.

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