art
Posts: 2736
Joined: Tue Feb 08, 2005 11:46 am

What Is The Cost Of A Dead A350?

Wed Jul 19, 2006 3:11 pm

Quite a lot of time was spent designing, re-designing, re-re-designing, re-re-re-designing etc the now defunct A350.

I wonder how much that cost Airbus.

Airbus took orders for the A350 and it looks like the airlines that ordered it want to pay the same price for the A350XWB. The A350XWB list price is tens or millions of dollars higher than the A350 list price.

I wonder how much that will cost Airbus.

The delivery of the A350XWB will be later than agreed in at least some of the original contracts for the A350. I presume there are penalties in the contracts for late delivery.

I wonder how much that will cost Airbus.

Presumably some of the design work done on the A350 will reduce the design cost of the A350XWB. And some (or all) of any late delivery penalties will be covered by the increased discount airlines expect to be given (for example, Kingfisher).

Does anyone have any ideas?
 
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Stitch
Posts: 23883
Joined: Wed Jul 06, 2005 4:26 am

RE: What Is The Cost Of A Dead A350?

Wed Jul 19, 2006 3:21 pm

Speculation from Airbus operators is development costs will be around $10 billion. Since the former A350 didn't get much past the CATIA stage, actual development monies spent on it are probably relatively low (tens of millions, maybe a few hundred). It is unknown if Airbus will be paying compensation for the delay of EIS, or if receiving the new plane at the same price as the old will be considered sufficient. If Airbus secures all 100 previous orders, then that "loss" could measure in the billions, depending on how much Airbus would have charged more if the A350XWB had been originally offered.
 
mbj2000
Posts: 295
Joined: Thu Dec 15, 2005 5:15 am

RE: What Is The Cost Of A Dead A350?

Wed Jul 19, 2006 6:16 pm

I'm not sure about that, wheren't the wings already in construction?

Quoting Stitch (Reply 1):
Speculation from Airbus operators is development costs will be around $10 billion. Since the former A350 didn't get much past the CATIA stage,
Like most of life's problems, this one can be solved with bending -- Bender Unit 22
 
RichardPrice
Posts: 4474
Joined: Sat Apr 23, 2005 5:12 am

RE: What Is The Cost Of A Dead A350?

Wed Jul 19, 2006 6:27 pm

Quoting MBJ2000 (Reply 2):
I'm not sure about that, wheren't the wings already in construction?

The aircraft wasnt due for EIS for 4 to 5 years, why would the wings be already in production?

Quoting Art (Thread starter):
Quite a lot of time was spent designing, re-designing, re-re-designing, re-re-re-designing etc the now defunct A350.

I wonder how much that cost Airbus.

Not as much as you think, essentially at this stage all they are paying for is designers and engineers time, wind tunnel testing and computer time - based on knowledge from other projects of this stage I would be hesitant to suggest a number any larger than $500mill and expect it to be as much as $150mill less than that.

Quoting Art (Thread starter):
Airbus took orders for the A350 and it looks like the airlines that ordered it want to pay the same price for the A350XWB. The A350XWB list price is tens or millions of dollars higher than the A350 list price.

I wonder how much that will cost Airbus.

I doubt that the price difference is any greater than the discounts given normally by Airbus and Boeing, its certainly something that can be absorbed.

Quoting Art (Thread starter):
The delivery of the A350XWB will be later than agreed in at least some of the original contracts for the A350. I presume there are penalties in the contracts for late delivery.

I wonder how much that will cost Airbus.

Im betting that those contracts will also contain clauses allowing for Airbus to change the EIS dates up until the design is frozen, with minimal or no penalty but with the option for the customer to cancel.

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