leelaw
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FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 5:21 pm

24 October 2006

Airbus is expected to seek board approval from parent company EADS in early November to move forward with the launch of the revamped A350 XWB programme, but has meanwhile delayed a regular strategy briefing with suppliers about future products.

When it unveiled the A350 XWB at Farnborough in July, Airbus said that it intended to be ready to seek an industrial launch decision for the new programme "in three months." However, according to industry sources , Airbus has told senior planners at various suppliers that the tumult over the A380 delay, the restructuring and changeover in leadership and other senior management has left its original plans in complete disarray.

Flight International understands that major systems and engine suppliers that were originally to travel to Toulouse for Airbus's regular six-month future products strategy meeting around mid-November were told to cancel. "They have no strategic plan at he moment," says one key supplier, which does not want to be identified...


Doesn't it seem odd that a "board" would approve an "industrial launch" without a coherent strategic plan?
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scouseflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 5:27 pm

Quoting Leelaw (Thread starter):
Doesn't it seem odd that a "board" would approve an "industrial launch" without a coherent strategic plan?

What it probably means is that Airbus needs to know the outcome of the "go/no go" decision before they can plan the conference and there won't be time to do it so that conf is delayed.

I hope that they can get the sums to add up and launch this baby with a few orders.

As as aside when / if the XWB is launched it is going to wreck AB's orders for the year as we're likely to get lots of cancellations of the old A350 and new orders for the XWB but not all so it may have a negative impact on the order sheet (until SQ firm their 20, LF order 50, BA 25, QR 60 and EK 100  Big grin )
 
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kc135topboom
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 5:34 pm

But wasn't the original A-350 Mk I going to enter airline service in 2009? Now with the A-350XWB program, the earliest it can enter service is 2012, or later. How is this going to effect the US order for the A-350 Mk I? As Airbus gave them a loan to help exit bankruptcy, and part of the deal was a US order for the A-350, not the A-350XWB.
 
scouseflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 5:36 pm

Quoting KC135TopBoom (Reply 2):
But wasn't the original A-350 Mk I going to enter airline service in 2009? Now with the A-350XWB program, the earliest it can enter service is 2012, or later. How is this going to effect the US order for the A-350 Mk I? As Airbus gave them a loan to help exit bankruptcy, and part of the deal was a US order for the A-350, not the A-350XWB.

I beleive that if they repay the loan they no longer have to stick to the A350 order - but I'd imagine that they will as they will likely get the XWB at a bargin price - a Mercedes at Lada prices it was described by a differant CEO!
 
bringiton
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 5:40 pm

Quoting Scouseflyer (Reply 1):
As as aside when / if the XWB is launched it is going to wreck AB's orders for the year as we're likely to get lots of cancellations of the old A350 and new orders for the XWB but not all so it may have a negative impact on the order sheet (until SQ firm their 20, LF order 50, BA 25, QR 60 and EK 100 )

Which leads to the question regarding what airbus has done to the 100 or so orders that the had ? Are they offering the A330 instead ??
 
scouseflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 5:58 pm

Quoting Bringiton (Reply 4):
Which leads to the question regarding what airbus has done to the 100 or so orders that the had ? Are they offering the A330 instead ??

I think that'll be a point of negotitation between AB and the airlines - some will go for the A330, some the XWB and some will cancel.

Another customer I forgot was ILFC who promised to order some more if they made it wider:
RE: WSJ: Airbus Redesigns The A350 - Mr. U-H's C-n (by Scouseflyer Jul 14 2006 in Civil Aviation)?searchid=2877974&s=Udvar-Hazy+bill#ID2877974
 
Lumberton
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 6:44 pm

It appears that there is now great concern in the UK about the extent of Airbus UK's participation in the A350:
Showdown as UK fights for role in Airbus A350

Quote:
THE Government is braced for a confrontation with Airbus today over the aircraft manufacturer’s continued presence in the UK after it emerged that British representatives have not been included in the planning committee for the A350, the next Airbus project.
Evidence that Britain is being sidelined from the planning of the A350 project will raise the temperature at a meeting in London today when Alastair Darling, the Trade and Industry Secretary, will discuss future British government investment in the project with Louis Gallois, the head of Airbus, and Tom Enders, the head of EADS, Airbus’s parent.
Fears are growing that Britain’s weakened position will mean that Airbus’s Broughton plant in North Wales, which makes aircraft wings, may miss out on a share in the $10 billion (£5.3 billion) investment, putting at risk some 13,000 jobs.
The appointment of a British representative to the EADS board may also be in doubt. The Times has learnt that EADS is also looking at US and Commonwealth citizens who would be responsible only nominally for overseeing its UK operations.
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scouseflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 6:58 pm

Quoting Lumberton (Reply 6):
It appears that there is now great concern in the UK about the extent of Airbus UK's participation in the A350:
Showdown as UK fights for role in Airbus A350

I hope that this is only posturing over how much cash the government will LOAN AB to launch this bird - they can't bin Broughton!
 
Lumberton
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Mon Oct 23, 2006 7:09 pm

Here's a quote from Allan McArtor, Chairman of Airbus North America, on the A350. He leaves no doubt this project will be launched soon.

Quote:
Q. Is the Mobile engi neering center still assigned to work on the A350? There's been some speculation that Airbus will delay the launch of that airplane.

A. The A350 is one of the projects central to that facility. It has been introduced to our customers, and it will be formally launched in the next several weeks. It's a very important aircraft for us, and we must have our engineering resources in place to make sure it's a success.

http://www.al.com/news/mobileregiste...594952171710.xml&coll=3&thispage=3

He also is confident for the prospects of Airbus expanding in the U.S.

Quote:
Q. The new chief execu tive, Louis Gallois, said he's looking to outsource some Air bus work from Europe as a way to cut costs. Could that mean more work in the United States?
A. It will definitely mean more procurement in the United States. It could very well lead to more manufacturing work here, but I can't say what or how much. It's too early to speculate about that.
Q. Is there a business case for shifting more work to America?
A. You can expect to see Airbus more active in what we call the "dollar zone" going forward. One of the factors is the exchange rate. Because the dollar is so weak against the euro, it makes a more compelling case for investing in the U.S.
As it stands, the currency situation puts (our European operations) at a 20 percent disadvantage, and we need to increase our dollar-based activities to get some balance there. It's something we're looking at, and that could be good news for Mobile. Whether that means more engineering or manufacturing work I can't say for sure. It certainly strengthens the case for Mobile, and it could mean additional work in the future. But we have to get things stabilized first.

IMO, this musn't be seen as a "zero sum" situation for EADS workers. New business projects, like the A350 and the KC-30, represent an opportunity to diversify and expand the production base. I hope the EU unions don't paint this a a threatening situation.
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leelaw
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 12:40 am

Quoting Lumberton (Reply 6):
It appears that there is now great concern in the UK about the extent of Airbus UK's participation in the A350

IIRC, it took some time to carve up the "spoils" of the "old all-new A350" program, including extracting "tribute" from the U.K. government in the form of a commitment for launch-aid to keep Airbus U.K. in the game, before it was "industrially launched" in October of last year.

[Edited 2006-10-23 17:41:21]

[Edited 2006-10-23 17:42:16]
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atmx2000
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 12:48 am

Quoting Lumberton (Reply 8):

McArtor:
A. You can expect to see Airbus more active in what we call the "dollar zone" going forward. One of the factors is the exchange rate. Because the dollar is so weak against the euro, it makes a more compelling case for investing in the U.S.
As it stands, the currency situation puts (our European operations) at a 20 percent disadvantage, and we need to increase our dollar-based activities to get some balance there.

They are not at a disadvantage. The exchange rate is where it should be on a historical basis. European economies are simply uncompetitive when their currency is not undervalued as it was from 1999-2003.
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Stitch
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 12:57 am

Quoting Leelaw (Thread starter):
Doesn't it seem odd that a "board" would approve an "industrial launch" without a coherent strategic plan?

By launching the plane, even if they don't have any specifics, is a sign to prospective customers that Airbus intends to move forward on the plane. It also helps Airbus start to firm up those LoIs/MoUs as well as begin formal order conversion for those A350MkI customers who wish to continue forward with the A350XWB.

After all, Boeing has yet to firm the 748I and recently changed it's form, even though it launched it months ago.

Quoting Lumberton (Reply 6):
It appears that there is now great concern in the UK about the extent of Airbus UK's participation in the A350...

Makes sense. Germany is considering taking a direct ownership role to protect their own jobs. Britain may very well have to do the same to ensure Broughton continues to build wings for future Airbus commercial products and continue to have a say in EADS/Airbus decisions.
 
leelaw
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 2:33 am

The full text of the article quoted in the threadstarter in now available online:

http://www.flightglobal.com/Articles...ask+board+to+approve+A350+XWB.html
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redflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 2:56 am

Quoting Leelaw (Thread starter):
Doesn't it seem odd that a "board" would approve an "industrial launch" without a coherent strategic plan?

They have no choice but to approve an industrial launch. If they don't do it soon then the message that airline clients will get is that Airbus is giving up the widebody market and going to be just a niche player. They have to approve in order to remain viable.

Quoting KC135TopBoom (Reply 2):
Now with the A-350XWB program, the earliest it can enter service is 2012, or later.

I think it's going to be later. Much later, like 2014. I don't think anyone really believes it will EIS in 2012 as Airbus has stated.
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 3:02 am

Quoting KC135TopBoom (Reply 2):
How is this going to effect the US order for the A-350 Mk I? As Airbus gave them a loan to help exit bankruptcy, and part of the deal was a US order for the A-350, not the A-350XWB.



Quoting Scouseflyer (Reply 3):
I beleive that if they repay the loan they no longer have to stick to the A350 order - but I'd imagine that they will as they will likely get the XWB at a bargin price

At a recent employee exchange Doug Parker mentioned that US Airways is no longer under any obligation to take the A350, however they are in a wait an see mode awaiting Airbus moves and what the final version of the A350 might look like. While delayed, they might end up with a much more capable airplane at a bargain price.

A more immediate fleet decision at US Airways, is a follow on narrow body order to replace the carriers large 737 fleet, with both the Airbus A320 and 737NG series under review according to the Parker.
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DAYflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 5:32 am

Doublespeak.

"We are seeking an industrial launch but we have no strategic plans."

Whoever heard of such a thing????
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glideslope
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 5:43 am

Quoting Stitch (Reply 11):
Makes sense. Germany is considering taking a direct ownership role to protect their own jobs. Britain may very well have to do the same to ensure Broughton continues to build wings for future Airbus commercial products and continue to have a say in EADS/Airbus decisions.

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ikramerica
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 5:45 am

Where is the real money in the market?

If Airbus were a super-regional aircraft maker, by that I mean focusing on short and medium range jets, what is the financial outlook?

Airlines have repeatedly demonstrated that they don't care about commonality between short and longhaul fleets because the pilots don't tend to cross between the two.

If Airbus just stuck to what it does best - A330 and A320 series - why is this a bad thing? Why did they force themselves into the A340 then the A380 markets? I doubt that the A340 or A380 programs will ever make them money on their own. Without the A330 to bolster the A340, it's a loss maker, and the recent versions are all loss makers. All of it took away focus from the A330 and what it could have been. Longer range if desired, A330F launched years ago. A330NG with better engines, etc.
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zvezda
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 5:52 am

Quoting DAYflyer (Reply 15):
Doublespeak.

"We are seeking an industrial launch but we have no strategic plans."

Whoever heard of such a thing????

Everyone who lived in the Soviet Union was familiar with the sort of doublespeak we're seeing from Airbus lately. My favorite Pravda headline was:
СССР второй, США предпоследний (USSR second, USA second-to-last). The article was about a track and field competition. Many articles leading up to the event mentioned that only the USSR and USA were competing. It was never again mentioned after the event. I don't ever remember this from Airbus when Jean Pierson was in charge. Is he still alive? Can he be brought out of retirement? Probably some stupid labour law prohibits it.
 
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 5:55 am

Quoting DAYflyer (Reply 15):
"We are seeking an industrial launch but we have no strategic plans."

Whoever heard of such a thing????

Well the A380 project is a good comparison of "voodoo" planning.

The initial business plan stated that was 250 units would be the break-even point. Last week we learned that plan was a whooping 55% off!

I would like to think that A would be a wee bit more conservative in their A350WXB plans and refrain from the out of control marketing boosting.*

*hint: KEEP LEAHY'S TRAP SHUT!!
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Lumberton
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 6:10 am

Quoting Zvezda (Reply 18):
I don't ever remember this from Airbus when Jean Pierson was in charge. Is he still alive? Can he be brought out of retirement? Probably some stupid labour law prohibits it.

I read recently that he had retired and was fishing in Corsica (or Sardinia). I have no doubt that EADS would like him to come back, but IMO he has nothing left to prove.
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N328KF
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 6:12 am

Quoting Zvezda (Reply 18):
I don't ever remember this from Airbus when Jean Pierson was in charge. Is he still alive? Can he be brought out of retirement? Probably some stupid labour law prohibits it.



Quoting Lumberton (Reply 20):
I read recently that he had retired and was fishing in Corsica (or Sardinia). I have no doubt that EADS would like him to come back, but IMO he has nothing left to prove.

Maybe DCX could acquire Ford and use it to move Mulally to Airbus.  Wink

Just kidding—DCX already has two dogs. No need for them to get wrapped up in a third.
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Charger
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 6:59 am

Quoting RedFlyer (Reply 13):
Quoting Leelaw (Thread starter):
Doesn't it seem odd that a "board" would approve an "industrial launch" without a coherent strategic plan?

Just a question here, so all please keep calm, but could it be that A wants to be able to show something to the airlines and say see we have something to compete with B and maybe they could stall some sales to B or convince some airlines away from B all together?
 
redflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 7:07 am

Quoting Charger (Reply 22):
could it be that A wants to be able to show something to the airlines and say see we have something to compete with B and maybe they could stall some sales

That's exactly why they will go ahead with an "industrial launch". At this point, they need to preserve potential future orders for their XWB.

Quoting Charger (Reply 22):
or convince some airlines away from B all together?

Unless they have a solid (real) offering, they will never take orders away from B altogether.
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B707Stu
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 7:32 am

Quoting Lumberton (Reply 6):
It appears that there is now great concern in the UK about the extent of Airbus UK's participation in the A350:
Showdown as UK fights for role in Airbus A350

Quote:
THE Government is braced for a confrontation with Airbus today over the aircraft manufacturer’s continued presence in the UK after it emerged that British representatives have not been included in the planning committee for the A350, the next Airbus project.
Evidence that Britain is being sidelined from the planning of the A350 project will raise the temperature at a meeting in London today when Alastair Darling, the Trade and Industry Secretary, will discuss future British government investment in the project with Louis Gallois, the head of Airbus, and Tom Enders, the head of EADS, Airbus’s parent.
Fears are growing that Britain’s weakened position will mean that Airbus’s Broughton plant in North Wales, which makes aircraft wings, may miss out on a share in the $10 billion (£5.3 billion) investment, putting at risk some 13,000 jobs.
The appointment of a British representative to the EADS board may also be in doubt. The Times has learnt that EADS is also looking at US and Commonwealth citizens who would be responsible only nominally for overseeing its UK operations.

So what's the liklihood of the British aligning with Boeing and dropping Airbus all together? Now that would be interesting, wouldn't it?
 
ikramerica
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 7:41 am

Quoting B707Stu (Reply 24):
So what's the liklihood of the British aligning with Boeing and dropping Airbus all together? Now that would be interesting, wouldn't it?

The british really lament losing their last manufacturer of airframes in 2002.

Perhaps Boeing and the various british entities could be partners on the 797? One final assembly line in the UK, 2 in the USA? Delivering 797 barrels and wings by air from Italy, Japan and America to either the UK or Seattle isn't much different, really.
Of all the things to worry about... the Wookie has no pants.
 
jacobin777
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 7:42 am

Quoting RAPCON (Reply 19):
The initial business plan stated that was 250 units would be the break-even point. Last week we learned that plan was a whooping 55% off!

You probably meant 68%... Wink
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Lumberton
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 7:44 am

Quoting B707Stu (Reply 24):
So what's the liklihood of the British aligning with Boeing and dropping Airbus all together? Now that would be interesting, wouldn't it?

IMO, not much. A sizeable investment has been made in the UK wing works. I simiply can't see this work going anywhere else soon, at least not if Airbus wants to get the A350XWB in revenue service sometime around 2012. Too much know how, talent, expertise, etc., resides in Airbus UK. I suspect that with a herculean national committment on the part of Spain, EADS could replicate the factories, but not the skills. However, there are much more knowledgeable persons regarding these industrial matters and I'll defer to them. This represents my USD$0.02 only.
"When all is said and done, more will be said than done".
 
Ruscoe
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 8:09 am

My thoughts are:

1.The UK should abandon Europe and go with the USA if they can. Build wings for the 737 replacement. Offer to contribute the money Airbus wants for the 350 for a share of the 737 replacement craft. (Australia should cough up a couple of billion for a similar reason)

2. If Airbus don't build the 350XWB from CFRP then it won't be a huge success, and Airbus will slip behind Boeing permanently.

3. If Airbus is not floated off as an independent company with a broad shareholder base then we are just filling in time till the next disaster.

Ruscoe
 
AtlBill
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 8:38 am

Actually, EADS will need to approve the A350XWB. Simply put, AB without a wide body to compete with will also sacrifice their A320 sales. (Note how the 737 Sales dipped during the period the 767 was not competitive and how the A320 sales slipped as the A330 slipped in sales). So, they will eventually approve a A350 program. The real question is what will the program look like that they approve. Specifically where will the $10B come from (will they trade loans for jobs) and what will the plane be, A330 warmed over, Al-Li, or composite. Time will tell.
 
trex8
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 8:44 am

Quoting Ikramerica (Reply 17):
If Airbus just stuck to what it does best - A330 and A320 series - why is this a bad thing? Why did they force themselves into the A340 then the A380 markets? I doubt that the A340 or A380 programs will ever make them money on their own. Without the A330 to bolster the A340, it's a loss maker, and the recent versions are all loss makers. All of it took away focus from the A330 and what it could have been. Longer range if desired, A330F launched years ago. A330NG with better engines, etc.

are you talking about the A345/6 specifically or the whole A340 program as the A330 and 340 programs were developed together and initially the A330 was not doing as well as the A340 till the A332 came out. in fact the A340 flew a year before the A330.
 
ikramerica
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 8:44 am

Quoting Jacobin777 (Reply 26):
You probably meant 68%...

Actually, he meant 270. 55% is right, it's the 250 that's wrong...
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leelaw
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 9:14 am

Quoting Ikramerica (Reply 31):
Actually, he meant 270. 55% is right, it's the 250 that's wrong...

Actually, IIRC, the 270 "break-even" estimate (19% IRR) announced by Airbus in 2005 (prior to the first major program delay), was an upward revision of earlier estimates since the launch of the A380 program of a break-even of 250 units and an IRR of greater than 20%.
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jacobin777
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 10:08 am

Quoting Ikramerica (Reply 31):

Actually, he meant 270. 55% is right, it's the 250 that's wrong...

I went off of the 250 number..for which 420 is 68% more sales needed....

((250)*.68+250)=420

Cheers...
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scouseflyer
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 4:38 pm

Quoting Ruscoe (Reply 28):
If Airbus don't build the 350XWB from CFRP then it won't be a huge success, and Airbus will slip behind Boeing permanently.

Not necessarily true - the mere presence or lack of a particular technology doesn't make something a sucess or not. It's the whole package that's important - what technology it includes is a diversion!
 
ikramerica
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 4:55 pm

Quoting Trex8 (Reply 30):
are you talking about the A345/6 specifically or the whole A340 program as the A330 and 340 programs were developed together and initially the A330 was not doing as well as the A340 till the A332 came out.

I mean, when taken as a whole, 342/343/345/346/345HGW/345HGW they likely didn't make much.

I know the 330/340 were developed together. I am just saying that that in itself was a mistake. Airbus would have been better off not doing the 340, and focusing on optimizing the frame for 2 engines with the 330 through 6000nm.

The bulk of the market for jets is in the narrow body and the midsize widebody classes, and Airbus was building superior products in those families. Without distraction of the 340 and 380, more resources could have been devoted to improving/stretching the 330 including launching the F much earlier, improving range into the 777 class in the late 90s, etc. Instead, they focused on quads and being the biggest (346, 380) and not doing a very good job of it.

Just my opinion.
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baroque
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RE: FI: Airbus To Ask Board To Approve A350 XWB

Tue Oct 24, 2006 11:56 pm

Quoting Stitch (Reply 11):
Makes sense. Germany is considering taking a direct ownership role to protect their own jobs. Britain may very well have to do the same to ensure Broughton continues to build wings for future Airbus commercial products and continue to have a say in EADS/Airbus decisions.

Would not that be ironical! That could be a new leader's initiative, I doubt if Holy T would entertain it but a newbie might to show willing in Europe, not to mention to the odd constituent or three.

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