windshear
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Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 2:52 pm

http://business.guardian.co.uk/story/0,,1890098,00.html

Quote:
Emirates, the leading launch customer for the Airbus A380 super jumbo, is demanding £150m in compensation for delays to the crisis-hit programme... Virgin Atlantic is claiming more than £20m in compensation for delays in its order of six A380s, while Australian carrier Qantas has announced it wants £40m.

http://online.wsj.com/google_login.h...586036.html%3Fmod%3Dgooglenews_wsj

Quote:
Jumbo Worries at Airbus: Virgin Atlantic will consider terminating orders for Airbus's superjumbo A380, following last week's news that deliveries will be delayed another year. Airbus could be forced into costly concessions to keep customers from rival aircraft maker Boeing

http://www.nytimes.com/2006/10/08/bu...s.html?_r=1&ref=europe&oref=slogin

Quote:
Airbus, which is struggling with delays and cost overruns in the production of its A380 superjumbo jet, was caught in the awkward position late Friday of having to deny media reports that its new chief executive has resigned... ources within the companies reported a major rift between Mr. Streiff and his managers at EADS, whose support for him is flagging. The friction may lead to Mr. Streiff’s resignation, which had not occurred as of late Saturday, the sources said.

This is growing increasingly bad, I know some referred this crisis to that of Boeing's '97 crisis, but this is going to take a lot of effort.

I am confident, that in time, we'll see a much more productive and well functioning Airbus, but only G-d knows what it will take Airbus to get there, and how long it will take.

Boaz.
"If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
 
Beaucaire
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:01 pm

I don't think we have to open yet another thread about the pains Airbus is going through!
Everybody here on a.net is fully aware that the shit has hit the fan for Airbus and EADS.I don't see any reason to open another line of negative news accumulation on this forum.Those who have expressed their opinion on how bad things have been managed in Toulouse and Amsterdam have done so -why incease the pain to turn the knive in the wound?
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mpdpilot
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:04 pm

just out of curiousity what is the "fresh hit" so far everything I have read has already been posted. I do think your right though, airbus will recover it is just a question of when.
One mile of highway gets you one mile, one mile of runway gets you anywhere.
 
PVG
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:14 pm

The difference between Airbus and Boeing is that Boeing made tough decisions, cleaned house, and stuck to their disciplined position of not investing in a new program until they had "game changer" type technology to offer the market, which has gotten them to where they stand today.

I don't sense that Airbus has the will to do what's going to be necessary. What I do see is that eventually the governments may just have to bail out the company as the job losses in both Germany and France are not politically palatable. So, they write off the crap and it goes in the governments' balance sheet. Otherwise, I just don't see the will to take their medicine here! Might be wrong, but that's my take.
 
windshear
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:19 pm

Quoting PVG (Reply 3):
I don't sense that Airbus has the will to do what's going to be necessary. What I do see is that eventually the governments may just have to bail out the company as the job losses in both Germany and France are not politically palatable. So, they write off the crap and it goes in the governments' balance sheet. Otherwise, I just don't see the will to take their medicine here! Might be wrong, but that's my take.

Yes I see your point, and perhaps you are right. I am thinking about the third article I quote, the one about the rift between Mr.Streiff and EADS.

I actually thought the new guys from Germany, would help get this baby on the right track. EADS might just not have the "will" that you also speak of.

Boaz.
"If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
 
OHLHD
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:33 pm

Emirates, the leading launch customer for the Airbus A380 super jumbo, is demanding £150m in compensation for delays to the crisis-hit programme.
Tim Clark, president of Dubai-based airline Emirates, which has ordered 45 A380s, made the claim in talks with Airbus management last week following the announcement of a third postponement of deliveries of the world's largest passenger jet. It is also understood that Sir Richard Branson's Virgin Atlantic is claiming more than £20m in compensation for delays in its order of six A380s, while Australian carrier Qantas has announced it wants £40m.


I want $ 100m too, for reading soooo many A380 threads recently!!!!  Big grin


So we get to see some real money figuers now.
 
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mariner
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:39 pm

Quoting OHLHD (Reply 5):
I want $ 100m too, for reading soooo many A380 threads recently!

You've actually read them all? Wow, you deserve $100 million.

But I think Emirates has more chance of getting the loot - a pretty reasonable amount, given the circumstances.

 Smile

mariner
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PVG
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:41 pm

Quoting Windshear (Reply 4):
I actually thought the new guys from Germany, would help get this baby on the right track. EADS might just not have the "will" that you also speak of.

Still don't understand why you would bring in an outsider and then expect him to run the company the same way that the guys you just fired were? My guess is the whole corporate structure of this company has been living in LALA land for the past few years and they were really believing the press releases issued by their own PR dept.! The guys who got fired were essentially scapegoats, the problems here run much deeper than those 2 guys!
 
SInGAPORE_AIR
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 3:56 pm

Quoting Windshear (Thread starter):
while Australian carrier Qantas has announced it wants £40m.

I am surprised that The Guardian was so careless. The Australian carrier actually announced that it wants around half of what it got last time, which is around A$52 million / £20.6 million / US$ 38.6 million.
Anyone can fly, only the best Soar.
 
manni
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 4:13 pm

Quoting Singapore_Air (Reply 8):
The Australian carrier actually announced that it wants around half of what it got last time, which is around A$52 million / £20.6 million / US$ 38.6 million.

Indeed here's a link and a piece of the article.

http://www.thewest.com.au/default.aspx?MenuID=33&ContentID=8723

Qantas chief financial officer Peter Gregg said yesterday the company was in negotiations with Airbus over compensation for the late delivery of its second lot of six A380s.

Qantas reported $104 million in compensation for delays of the first six aircraft in its profit to June 30. Mr Gregg said further claims would be made.

"There’s more to come but not the same sort of number seen in the past. It will be less than half that sum,” he said.

Discussions between Qantas and Airbus were focusing on trade-offs rather than direct cash payments, he said. The trade-offs are likely to include discounts on the price of aircraft or access to more A380s if Qantas decides to increase its order.

Deutsche Bank analyst Jason Bloom said the delay was unlikely to badly affect Qantas and compensation levels of about $50 million might cover any damage.
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Charliejag1
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 4:17 pm

Quoting Beaucaire (Reply 1):
I don't think we have to open yet another thread about the pains Airbus is going through!

I don't see a problem . . .
 
SInGAPORE_AIR
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 4:18 pm

Quoting Charliejag1 (Reply 10):
I don't see a problem . . .

Me neither.

Thanks Manni for the article. I was too lazy to find one.
Anyone can fly, only the best Soar.
 
OHLHD
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 4:19 pm

Quoting Mariner (Reply 6):
You've actually read them all? Wow, you deserve $100 million.

I have to admit that I did not. I am not a FREAK!!!!! Big grin
 
Leskova
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 7:13 pm

Quoting Windshear (Reply 4):
I actually thought the new guys from Germany

What 'new guys from Germany'? Thomas Enders has been with the company for quite a while - and neither one of the 'new guys', namely Louis Gallois and Christian Streiff, are German...
Smile - it confuses people!
 
art
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 7:34 pm

Quoting Mariner (Reply 6):
Quoting OHLHD (Reply 5):
I want $ 100m too, for reading soooo many A380 threads recently!

You've actually read them all? Wow, you deserve $100 million.

I must have read half of them. I hope I qualify for my $50 million. Does a.net have enough to pay me or will they have to seek government assistance to get themselves out of this tight corner? Smile
 
windshear
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 8:44 pm

Quoting PVG (Reply 7):
Still don't understand why you would bring in an outsider and then expect him to run the company the same way that the guys you just fired were?

Me neither, and thinking about Foregeard's former (arrogant) PR strategies, I guess the lala land theory is not so far fetched after all.

Quoting Leskova (Reply 13):
Christian Streiff,

Sorry thought Streiff was German, my bad, but where is he from then?

Boaz.
"If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
 
Leskova
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 8:57 pm

Quoting Windshear (Reply 15):
Sorry thought Streiff was German, my bad, but where is he from then?

He's French.

http://www.airbus.com/en/corporate/people/christian_streiff.html
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MD80Nut
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Sun Oct 08, 2006 11:59 pm

I haven't participated in the "Airbus A380 Problems" threads much because the whole subject is so unpleasant. As an aviation enthusiast and fan of all airplane builders, it pains me to see a great commercial jet manufacturer like Airbus in such dire straits. I want to see the A380 flying around and maybe fly in one someday. The problems with the A380 are bad enough, but to see Airbus's management in such disarray at such a critical time when they need to project a sense of purpose and a plan to get the Whale Jet back on track makes it worst.

I have confidence Airbus will make it through and eventually be stronger for it, but they really need to get their team working together to solve the problems NOW. If Mr. Streiff resigns as a result of friction with management, it would send the worst possible signal at the worst possible time about the management situation. I would suspect we'd then see these airlines really rethink the wisdom of sticking with the A380 for their future plans regardless of how sweet a deal Airbus offers.

By the way, I understand how some people may be tired of reading A380 threads. But this is one of the biggest stories in years in commercial aviation and it's still unfolding with an uncertain outcome. There's is a lot to talk about!

Cheers, Ralph
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Stitch
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 12:09 am

Well this is new information about compensation, which I find helpful because we've seen figures from $100 to $100 million additional discounts per airframe bandied about.

So it looks like that even though "contractual damage caps" have been reached for many of the A380 customers, additional damages are being requested, but those requests are not in the scores of millions per frame.
 
ncelhr
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 2:29 am

Quoting PVG (Reply 3):
The difference between Airbus and Boeing is that Boeing made tough decisions, cleaned house, and stuck to their disciplined position of not investing in a new program until they had "game changer" type technology to offer the market, which has gotten them to where they stand today.

I don't sense that Airbus has the will to do what's going to be necessary. What I do see is that eventually the governments may just have to bail out the company as the job losses in both Germany and France are not politically palatable. So, they write off the crap and it goes in the governments' balance sheet. Otherwise, I just don't see the will to take their medicine here! Might be wrong, but that's my take.

You are absolutely correct on this. And consider this further: perhaps this whole crisis is actually *needed* to re-structure the company. There is a lot of resistance from those currently in place at various posts (both in the company but also politically around the company) to change, but it is required.

It is generally agreed that a lot of things have to change w.r.t. the company's structure - even going as deeply as flying fuselages and shipping huge parts etc. around. The loss made on logistics is huge! Of course, the path taken was not chosen out of efficiency but out of political manoeuvers and historical events. Who are we trying to kid that it costs nothing to transport huge bits of aircraft through villages in the French countryside?

So in order to streamline such a company you really need a major major problem for everybody to agree to do something. A real sense of urgency, a sense of "do it or lose everything", a sense of emergency needs to be created. And this might well be what is happening. Don't be shocked if this could lead to Airbus being close to complete collapse. The whole process, from manufacturing to decision making to management, has to be re-designed because there are deep deep problems inherent to the company which will only get worse and worse once full production of the A380 and other planes will go ahead. Airbus is about to embark on full scale manufacturing of the largest aicraft they have ever produced. They are about to embark on manufacturing the A400 for military contracts. They are about to embark on another huge huge programme for the A350 (or whatever they'll call it) and they need to have a structure that is competitive with Boeing's structure before they grow and before it goes out of control on them. What's a few millions lost now in compensation when it might cost billions later to put things right.

Many mistakes have crept into the structure as a product of political evolution as well as penny-pinching and over-growth in other areas, with bad communication between departments etc. It is now time to put the cards on the table and clear all this mess up before even having to pretend being able to ship out A380s. If at all, the project has shown which seams would break in the organisational structure and now it's time to work on them and come up with Airbus Mk2. Only then will Airbus have a chance to compete with Boeing's latest product offering and only then will the next commercial battle be played on an even field.

A revolution is what is needed at Airbus and this is hopefully what is happening.
 
RIXrat
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 2:32 am

Strange that there has been silence from AF and LH regarding compensation claims because of the delays in the delivery of the A380. Not much from SQ either who dropped a bundle with all their ads and billboards saying they would be the first to fly the plane in 2006.
 
GoAibusGo
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 4:52 am

*My first post in an A380 thread*

These airlines that claim compansation, should they then stick with their order or can they cancel their order later aswell? If not we can see who stays with their orginal order and who may cancel!

Thanks very much.

[Edited 2006-10-08 21:53:59]
 
Lumberton
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 5:01 am

Quoting GoAibusGo (Reply 21):
These airlines that claim compansation, should they then stick with their order or can they cancel their order later aswell? If not we can see who stays with their orginal order and may cancel!

The answer is most likely "it depends". It depends on the language of the sales agreement. I am reading where Airbus is at the limit of their obligation to pay compensation on the delays to some of the customers (sorry no link). However, Airbus could go ahead and agree to pay anyway just to keep them happy. If they opted not to pay anymore, then the customers could either accept the delay, file a claim in a court, or cancel--in whole or in part.

IMO, none of this is making the customer's who ordered these aircraft look like sage and wise businessmen (or businesswomen, as the case may be!). It isn't a good idea to embarass one's customers. Not ever....
"When all is said and done, more will be said than done".
 
bringiton
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 5:02 am

Emirates Says Report of A380 Compensation Is `Bunkum' -

http://www.bloomberg.com/apps/news?p...100&sid=ahqNqslLtV6o&refer=germany
 
BoomBoom
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 5:14 am

So will Germany and France be willing to put up launch aid for future Airbus projects if it doesn't result in jobs for their citizens?
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Stitch
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 5:16 am

It may indeed be "bunkum" or it could be true, and EK just doesn't want other A380 customers to know what they're asking for (or getting) so as to maintain a competitive advantage...

Quoting GoAibusGo (Reply 21):
These airlines that claim compensation, should they then stick with their order or can they cancel their order later as well?

We don't know. Supposedly, some customers (like ILFC) can walk away. However, that none of them have doesn't mean none of them can, just that none of them currently don't feel such an action is justifiable.
 
bringiton
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 5:17 am

Probably not(atleast to the same extent) but the point of the entire exercize is for airbus to be less reliant on the launch aid and deal with the indirect breaks that it gets ( and will get for sure) where-ever it sets up shop and be more effeceint and a leaner company
 
thebry
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 6:33 am

Quoting MD80Nut (Reply 17):
By the way, I understand how some people may be tired of reading A380 threads. But this is one of the biggest stories in years in commercial aviation and it's still unfolding with an uncertain outcome. There's is a lot to talk about!

 checkmark 
 
PVG
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 8:30 am

Quoting Ncelhr (Reply 19):
Who are we trying to kid that it costs nothing to transport huge bits of aircraft through villages in the French countryside?

So, how is it that the general consensus until about 18 months ago was that Airbus's manufacturing methods were more efficient and lower cost than Boeing's allowing them to sell aircraft at lower prices (extremely competitive prices let's say) and still book a substantial profit?
 
aztec01
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 9:49 am

Is it possible the reason AF and LH have been essentially silent is that they had already been informed of the delay and worked out a separate agreement prior to the general announcement? Kind of an 'insider' trading type thing?
 
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N328KF
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 11:01 am

Quoting Aztec01 (Reply 29):
Is it possible the reason AF and LH have been essentially silent is that they had already been informed of the delay and worked out a separate agreement prior to the general announcement? Kind of an 'insider' trading type thing?

Well, Lufthansa has no formal government ties. Air France KLM does, but it's a minority stake. But I don't see much advantage to either by doing this.
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
hamster
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 11:59 am

The planes are already flying lets not forget that. There are some technical snafu's but that comes with the territory in any dream. Large corporations can always get screwed up but throw in national interests and you have a recipe for disaster. I think it will be cool when this bird gets off the ground for good.
 
mig21umd
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 12:30 pm

Quoting MD80Nut (Reply 17):
As an aviation enthusiast and fan of all airplane builders, it pains me to see a great commercial jet manufacturer like Airbus in such dire straits. I want to see the A380 flying around and maybe fly in one someday.

I would rather see more 727s or DC10s flying around and really hope I still might get the chance to fly in one of these aircraft one day.

This is where I am different. I appreciate most Airbus products but I just don’t get the hype around the A380. For me it is Ugly and as a passenger I feel it will cause as much headaches as it is now for Airbus and the airlines that have her on order.

My two cents and first A380 post  Smile
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aerlingusa330
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 12:37 pm

I wouldn't be surprised if the 787 is in full production by the time the A380 flies its delivery flight.
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richie87
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 1:28 pm

These problems with the new A380 in production and delivery difficulties should not be a HUGE SURPRISE to anybody, really. If the company engaged in that lamentable practice of having "overpromised and underdelivered", which is a great plague of industrialized markets, well... you'd think they would have known better. I lost track of how many GB pounds, Euro's, US and Aussie dollars all these carriers who ordered the thing have demanded.
That's a major chunk of coin in any currency.

I think the person from China ( PVG ? ) had a pretty good point or two. In the interim... I suppose a few European governments are going to bail the operation out... I'm more sure of that than anything else.
 
aztec01
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 2:15 pm

Quote:
Well, Lufthansa has no formal government ties. Air France KLM does, but it's a minority stake. But I don't see much advantage to either by doing this.

Thanks for responding, here's my thought...

I won't pretend to understand the complexity and intricacies of this whole A380 mess, but Airbus seems to have a huge credibility problem on top of everything else. If the flag carriers for the two major countries involved got cold feet it might be the final harpoon in the Whale. Given the stakes for the two countries involved perhaps a quiet deal to placate those two airlines in particular was worked out, thereby salvaging some bi-national prestige, while keeping the terms hidden from other disgruntled buyers. Just a guess as to why LH and AF have kept mum thus far.



We don't hear too much about the 380 over here, except on A.net. I'm inclined to believe that most people, when you say "A380", think you mean a "360" doughnut plus change in the WalMart parking lot at 2 AM
 
jasond
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 2:27 pm

This may sound 'a bit out there' but I was curious about what happens if airlines do cancel their orders. Does this mean that (aside from obviously losing the immediate business) that Airbus do not pay penalties in this scenario. Looking at the figures quoted in the original post it is upwards of 210 Million pounds for those three airlines, money that Airbus otherwise could use to knuckle down and sort out the problems. Airlines may cancel but still have to find alternate capacity. It's a high risk strategy but could Airbus deliver the product before the alternatives are available?
 
Leskova
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 3:29 pm

Quoting Aztec01 (Reply 35):
I won't pretend to understand the complexity and intricacies of this whole A380 mess, but Airbus seems to have a huge credibility problem on top of everything else.

That problem is much more apparent on a.net than within airlines... though certainly the strange tactic of hiding the A380's delays and then presenting them piece-by-piece certainly hasn't helped Airbus...

Quoting Aztec01 (Reply 35):
If the flag carriers for the two major countries involved got cold feet it might be the final harpoon in the Whale.

It would be a blow, no doubt, but whether it would be the "final harpoon" is something I don't see as nearly as certain.

Quoting Aztec01 (Reply 35):
Given the stakes for the two countries involved perhaps a quiet deal to placate those two airlines in particular was worked out, thereby salvaging some bi-national prestige, while keeping the terms hidden from other disgruntled buyers. Just a guess as to why LH and AF have kept mum thus far.

I keep reading things like this, and I keep thinking "there really is a fundamendal difference between Europe and the US"...

It's not uncommon at all for companies involved in big industrial projects to, even when dates and/or technical targets are not met, still not hold a big press conference and start complaining about the manufacturer: first of all, the general consensus in cases such as this is usually that the manufacturer already has enough egg on their faces because of the obvious drilling they're getting in the press because of the publicly-known missed dates (and Airbus isn't exactly being spared there lately - and added to that, in this case, is the fact that the technical problems have become known anyhow), which is why the preferred practice here is simply this: negotiate with them, get the best deal out of it that you can, let them get back to their work and don't make it any harder than necessary by adding yet another layer onto the already too-thick 'blanket' of media trouble.

In the projects that I know, either from direct participation or from second-hand-knowledge from someone directly involved in them, I know that it is, indeed, absolute standard practice to release positive press releases while "giving 'em hell" at the negotiating table - with the positive press release being more a sign of "the negotiations are going well" or "we got what we wanted" than "we're happy about everything that's happening".

It might be an overdramatization or oversimplification, but if I read an explicitly negative press-release from LH (and perhaps from AF as well, but I've not dealt with French companies yet, so I'm not sure that this behaviour I see in Germany is also common there) about the A380, then I'd be almost positive to see them cancelling it as well; anything below that will, in my view, not create a negative release about it.

What you will see - or already have seen - is a bit of the 'mixed-messages' scenario: Nico Buchholz (LH Fleet Manager) saying that LH will not order further A380s (which is already quite a big slap in the face), combined with Wolfgang Mayrhuber's comment that LH will most likely add further A380s.

To some, it'll seem as if LH doesn't know what it's doing - to me it looks more like the negotiations had hit a bit of a rough spot there at one point.

Just my humble perspective...  Wink ... and I could, of course, be completely off with it...
Smile - it confuses people!
 
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Stitch
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RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 10:41 pm

Quoting Jasond (Reply 36):
This may sound 'a bit out there' but I was curious about what happens if airlines do cancel their orders. Does this mean that...Airbus do not pay penalties in this scenario.

Depends on the contract. Evidently some of the contracts have very liberal cancellation clauses. Some may have less liberal ones and others may have punitive ones.

Quote:
Airlines may cancel but still have to find alternate capacity. It's a high risk strategy but could Airbus deliver the product before the alternatives are available?

It depends on how much capacity they need and when they need it. The 773ER is available from 2008 (?) onwards. The A346 is available now. The 748I will be available from 2009-2010 forward. All three may be viable options for some or all current A380 customers in at least some form.
 
Lumberton
Posts: 4176
Joined: Fri Jul 29, 2005 7:34 am

RE: Airbus Faces Fresh Hit Over Super-jumbo

Mon Oct 09, 2006 10:49 pm

Quoting Jasond (Reply 36):
what happens if airlines do cancel their orders.

They will be left with gaping holes in their business plans. IMO, they committed to the A380; there is no alternative given the 748 EIS and the 777 backlog. I'm not sure the A346 would work for them either. IMO, the likes of SQ, EK, and QF are wedded to the decisions they made when they ordered the A380; if it was a good idea then, it's a good idea now.
"When all is said and done, more will be said than done".
 
starrion
Posts: 974
Joined: Sat Jul 19, 2003 1:19 pm

RE: Airbus Faces Fresh Hit Over Super-jumbo

Tue Oct 10, 2006 12:26 am

Quoting PVG (Reply 28):
So, how is it that the general consensus until about 18 months ago was that Airbus's manufacturing methods were more efficient and lower cost than Boeing's allowing them to sell aircraft at lower prices (extremely competitive prices let's say) and still book a substantial profit?

They're talking about different processes. The main Airbus plants manufacturing the A320 and the A330/340 -are- very efficient. If you disregard the expense of the added fuel costs, having the A330/340 share the same wing allows for one assembly plant, which saves manufacturing costs. The plant that is cranking out the A32x family is doing great. Their efficiency and (at the time) strong value of the Dollar, allowed Airbus to sell A32x frames lower than Boeing and still make a chunk of change.

Boeing's dominance started when the dollar fell and oil prices rose. 737's and 777's became cheaper to overseas customers, and the cost of oil badly eroded the attractiveness of the A340. Add to that the cutting edge technology of the 787 and Boeing is posting four-digit aircraft sales.

I can't see how anyone would call the A380 line efficient. The other Airbus plants haven't changed though.
Knowledge Replaces Fear
 
AirSpare
Posts: 570
Joined: Fri Jun 30, 2006 1:13 am

RE: Airbus Faces Fresh Hit Over Super-jumbo

Tue Oct 10, 2006 12:39 am

Quoting Lumberton (Reply 39):
They will be left with gaping holes in their business plans. IMO, they committed to the A380; there is no alternative given the 748 EIS and the 777 backlog. I'm not sure the A346 would work for them either. IMO, the likes of SQ, EK, and QF are wedded to the decisions they made when they ordered the A380; if it was a good idea then, it's a good idea now.

Bad analogy, "wedded", my last wedding was a good idea then, with 20-20 vision looking back, it was a disaster. It was cheaper to dump her then to keep her. This may be the case for the A380.

There are no bright spots on the EADS horizon.
Get someone else for your hero worship fetish
 
Lumberton
Posts: 4176
Joined: Fri Jul 29, 2005 7:34 am

RE: Airbus Faces Fresh Hit Over Super-jumbo

Tue Oct 10, 2006 12:48 am

Quoting AirSpare (Reply 41):
Bad analogy, "wedded", my last wedding was a good idea then, with 20-20 vision looking back, it was a disaster. It was cheaper to dump her then to keep her. This may be the case for the A380.

 rotfl   rotfl   rotfl   rotfl   rotfl 
Perhaps I should have said "stuck with"?
"When all is said and done, more will be said than done".
 
Ken777
Posts: 9101
Joined: Thu Mar 11, 2004 5:39 am

RE: Airbus Faces Fresh Hit Over Super-jumbo

Tue Oct 10, 2006 1:25 am

Quoting RIXrat (Reply 20):
Strange that there has been silence from AF and LH regarding compensation claims because of the delays in the delivery of the A380. Not much from SQ either who dropped a bundle with all their ads and billboards saying they would be the first to fly the plane in 2006.

I wouldn't be surprised if AF and LH have agreements in place that they get compensation equal to the highest paid to any other 380 customer, eliminating the need to go to the table angry. Both probably believe that they will eventually get a good plane that will perform as expected.

While Airbus may have hit the maximum contractual compensation for the delays they can always address it in other ways. While extra discounts on additional planes would be their preferred approach some airlines wouldn't be too happy with that right now. Better to look at extending the warranty period on the 380s plus throw in discounts for parts over an additional 5 - 10 years. It addresses the situation just as effectively for the airlines and adds value to keeping the 380 orders in place.

While the 748i EIS doesn't appear to be that appealing at first glance it may look better to the airlines than to us. If airlines can get the 748i in 2009 - 2010 then airlines might consider it a better opportunity that hoping that Airbus is able to stick with their current schedule of delayed 380s. One more delay with the 380 program for the 2009 - 2010 time frame and the 748i will be close to being equal to the 380 for deliveries, with the potential of being able to beat Airbus on delivering new orders.

Actually I have a feeling that Boeing is NOW in the position to offer better delivery dates for 748i orders than Airbus is on the 380. What a change from a year or 2 ago!
 
ncelhr
Posts: 252
Joined: Tue Jul 04, 2006 10:53 pm

RE: Airbus Faces Fresh Hit Over Super-jumbo

Tue Oct 10, 2006 7:12 am

Quoting PVG (Reply 28):
So, how is it that the general consensus until about 18 months ago was that Airbus's manufacturing methods were more efficient and lower cost than Boeing's allowing them to sell aircraft at lower prices (extremely competitive prices let's say) and still book a substantial profit?

Not across all models. Single aisle aircraft: yes. A330/340 more or less, but A380 is an absolute disaster.

A single assembly line runs super smoothly. As soon as you need to move things around too much, cost rockets upwards and efficiency plummets.

Boeing's constantly improving. Airbus needs to improve too in order to keep up and if it cannot improve on processes that are inherently flawed, it needs to re-engineer them. With internal politics, it's practically impossible. Too many people sucking on the system. Thats why it is becoming so dramatic.

Yes, the Airbus image might suffer greatly in the short term, but in the long term, there is light at the end of the tunnel. (hopefully) It is in nobody's interest that Airbus collapses completely. Both main manufacturers need the other to keep themselves going, if only as a catalyst for new ideas and developments.

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