Garri767
Topic Author
Posts: 2207
Joined: Sat Mar 26, 2005 2:00 pm

FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:01 pm

Old version was getting wayy too long and taking forever to load. please continue here.



and like someone said in the older thread, i bet FX ends up taking old/used A380s and converting them into A380F's.



Garri767

[Edited 2006-11-08 04:03:51]
Two wrongs may not make a right, but three lefts do!
 
Indy
Posts: 3941
Joined: Thu Jan 20, 2005 1:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:05 pm

It may have been said in the other discussion but who wants to read through 200+ posts? But it was a bold move by FX considering the changes they made in MEM including the huge hangar for the A380. But they really had no choice in making the move. Who knows if Airbus ever delivers the first A380. FX can't wait forever.
Indy = Indianapolis and not Independence Air
 
Garri767
Topic Author
Posts: 2207
Joined: Sat Mar 26, 2005 2:00 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:09 pm

Quoting Indy (Reply 1):
FX can't wait forever

With a few major cargo companies in the slew for a380 (formerly FX) i wonder how much longer any other airlines can wait!




Garri767
Two wrongs may not make a right, but three lefts do!
 
Indy
Posts: 3941
Joined: Thu Jan 20, 2005 1:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:14 pm

I think this will force UPS to dump Airbus as well. If they don't it could give FX a huge advantage. Unless they are going with the 747 freighter versus the Airbus as it is.
Indy = Indianapolis and not Independence Air
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:24 pm

FedEx delivers Boeing a major win
Cargo company cancels order with Airbus

By JAMES WALLACE
P-I AEROSPACE REPORTER

...Ned Laird, managing director of the Air Cargo Management Group, an aviation consulting and research firm in Seattle, said the FedEx decision represents a "major breakthrough" for Boeing. This is the first time since 1983 that FedEx has ordered new production freighters from Boeing, he said. FedEx is the world's largest operator of Airbus freighters, he noted...

...Richard Aboulafia, vice president of analysis for the Teal Group, an industry consulting firm in Fairfax, Va., said the FedEx cancellation is not as catastrophic for the A380 program as a cancellation from Emirates would be.

But it does raise questions about the viability of the A380 freighter program, he said...


http://seattlepi.nwsource.com/business/291479_fedexairbus08.html
Lex Ancilla Justitiae
 
Indy
Posts: 3941
Joined: Thu Jan 20, 2005 1:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:29 pm

It is a bit of a shame because I was hoping to catch a FX 380 coming to IND. But guess that won't happen. Maybe I'll see a 777 which is impressive itself here.
Indy = Indianapolis and not Independence Air
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:38 pm

Quoted from First thread:

Member: N31029 said:

Hi Everyone.

As an ardent aviation enthusiast first and foremost, I am saddened at this cancellation news. Whether we hold allegiance to Boeing or Airbus, a beautiful new aircraft type - gracing the skies - is something to be excited about. A terminated order is not.

We are all here to celebrate our shared passion for the commercial aviation industry. And whether our preference is for Manufacturer A or Manufacturer B, the potential demise of an inherently well-designed and innovative aircraft type can never be seen as a positive.

Obviously, the real world has interceded - finally - into the A380 program. And that is unfortunate because as a young company Airbus has many successes to its credit. And, further frustrating is the fact that the type itself appears to have been successfully engineered and destined to fill a unique void in the commercial aircraft marketplace.

The A380F - while not indicative of the future success or failure of the A380 passenger model - does generate cause for concern as FedEx's business model demanded capacity at a finite point in time. Airlines, at some point, must be true to their business models.

Several airlines, ordering the passenger version, have demonstrated great patience and vision, knowing that the ultimate success and need for the A380 will not be manifested in the short-term, but, in the long run. They will hold out, and secure this long range planning, until it is no longer feasible.

While it is entirely possible that the A380 may carve its place in history as a limited-run aircraft, it is also possible that the changing nature of the industry - and the world - may provide some unexpected opportunities and thus propel the A380 to a more robust long-term sales stature. Airbus' forecasts may yet be proved correct. The future can often hold unplanned surprises.

Airbus will continue to move forward with its marquee program and do the best it can to learn from its mistakes, and, build a better business plan for the future.

We must not forget an oft-repeated lesson of history: it is darkest just before dawn. I do not know how bright the light will shine for the A380 program over time, however, I do not know that it is much, much too early to know with any certainty what the long-term outcome will be.

Yes, today's news is indeed a setback but strength, perseverance, and a higher level of excellence can come out of adversity.

Blessings, N31029

**************************************

SSTsomeday here:

I just thought this post was worthy of being transfered to the new thread. Amazing how taking the high road brings with it a sense of truth and balance, doesn't it?
I come in peace
 
dank
Posts: 926
Joined: Thu Jul 20, 2006 11:35 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 12:58 pm

Quoting SSTsomeday (Reply 6):
SSTsomeday here:

I just thought this post was worthy of being transfered to the new thread. Amazing how taking the high road brings with it a sense of truth and balance, doesn't it?

Thanks for the repost.

cheers.
 
elvis777
Posts: 346
Joined: Sat Aug 20, 2005 9:23 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 2:13 pm

Howdy all,

Well, before we are all asked to join in one big group hug let me be the first and perhaps only one to post an opposing point of view to N31029 post:

Quoting SSTsomeday (Reply 6):
Hi Everyone.

As an ardent aviation enthusiast first and foremost, I am saddened at this cancellation news. Whether we hold allegiance to Boeing or Airbus, a beautiful new aircraft type - gracing the skies - is something to be excited about. A terminated order is not.

I am often amazed that we must categorize one's level of enthusiasm for aviation. as if to say that if one is a true blue aviation enthusiast (AE) then one must accept the N3s first premise. In other words, what he is innocently promulgating can actually be construed as a loyalty letter. "If you don’t sign it then you must be disloyal" which is to say that if I don’t feel that the 380 is then I must not be a true AE! Just like there are all shades of liberal democrats or conservative republicans (I am watching cnn) then there must be many shades of AE! Beauty is in the eye of the beholder, and although I must admit that in certain poses the 380 looked pretty nice, other people (at times myself) found the thing ugly.

And as an ardent AE I can be exited about anything under the skies that involves aviation -including but not limited to an order cancellation.

I think that there are AE, even ardent ones, that see this not just as an aesthetics contest but as an industrial competition that defines the , in some ways, political power throughout the world.

I guess I don’t like to be chided, even gently, for discussing the cancellation of a 10+ plane order. And I don’t much like anyone telling me what to be exited about or What not to be exited about.

Quoting SSTsomeday (Reply 6):
We are all here to celebrate our shared passion for the commercial aviation industry. And whether our preference is for Manufacturer A or Manufacturer B, the potential demise of an inherently well-designed and innovative aircraft type can never be seen as a positive

I really don’t know why some of us are here. I can only speak for myself, I like aviation stuff. ever since I was a kid. Some people call that a passion, I don’t know. I sure do enjoy reading peoples comments on a variety of subjects dealing with aviation, kind of like a window on the community. I often hear things before the media has reported it. Often these rumors are false but they are still interesting. In any case, this is an aviation forum and so anything is fair game. EVEN talking about the cancellation of an order. If one is to frankly and openly discuss an issue , there should not be any limits to the joy or sadness that one feels about a topic. Kind of like saying that if one is a true blue American one should not feel joy that x (where x can be republican or democrat) lost a particular seat!

Also, why are we to agree that this aircraft is well designed? As a courtesy I am going to say it is, but doesn’t the design of an aircraft encompass integration of electrical systems? So why don’t we wait till the thing is flying and at least meeting its stated engineering goals (verified by non LH pilot sources) before we call this bird well designed.

As far as innovative, well lots of opinions on this....I personally don’t see this as an innovative bird but hey I am sure Keesje , EBBUK et all will disagree. Nothing inherently wrong with that. As a matter of fact I think highly of these two members- that is the way life should be, different drummers and all.

As far as the demise of the 380 a good or bad thing let me put forth this scenario:

Suppose that the 380 was a mistake (just suppose) and that it is really hurting eads right now and in the future as well. what if the 380 were to die tomorrow but in return eads were to become a much stronger plane company. So much so that the 350 v7 would rule the world and they would make tons of money and by this make new birds that would be truly innovative and well engineered and that would grace our skies with the eagle like looks (keesje!). Would not that be a great thing? and all because the 380 became history. Is this not what happened with the concorde? eads precursor moved on after they realized the C was not a viable business platform and look at what they did (300,320,330, 340).

Just a simple scenario...

Ok., cant type more and the election results are coming in but you guys can see where I was heading with the rest of N3s post.

Peace Brothers

Elvis777

Any grammatical, editorial errors as well as inherent flaws to my arguments may be intentional or unintentional. Reference: Baroque, A.net post, 3rd quarter 2006.
Leper,Unevolved, Misplaced and Unrepentant SportsFanatic and a ZOMBIE as well
 
Curmudgeon
Posts: 682
Joined: Wed Oct 25, 2006 7:19 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 2:41 pm

The spectre of a programme cancellation for the A380F is now real, as has been pointed out earlier in the thread. I am wondering if Airbus and UPS are playing at brinkmanship on the other ten orders? UPS has, as you recall, converted previous orders to the A380 and most likely faces losses for cancelling now. Airbus would have penalties or refunds if they cancel, so there is ample reason to delay any decision at this point for both parties. I am not sure where Airbus is in their spending on the F model, but obviously the FedEx cancellation changes the already weak* case for the F dramatically.

(*"already weak" in the sense that they had only won 25 orders, and this is now amplified by the loss of what should have been their sure thing)

Airbus may be closer to the tipping point for the whole programme than any of us realise. This cancellation could spell the end of the freighter, which in turn invalidates the already optimistic business case for the aeroplane. A very sad state of affairs for everybody, not just in Europe.

The recent QF option conversions will not offset this cancellation, by the way. The additional eight frames contribute little to the A380 programme costs, according to the Sydney rumour mill. (In house crowing has the A380 purchase price as "below cost", whatever the hell that means)
Jets are for kids
 
User avatar
RayChuang
Posts: 8005
Joined: Sat Jun 24, 2000 7:43 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 2:45 pm

I think Airbus maybe closer to the cancellation of the A380 program than you think. I think they realize that Airbus should cut its losses and concentrate on the A350XWB, which will be better-suited for more airlines than the A380.
 
dank
Posts: 926
Joined: Thu Jul 20, 2006 11:35 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 2:56 pm

Quoting Curmudgeon (Reply 9):
This cancellation could spell the end of the freighter, which in turn invalidates the already optimistic business case for the aeroplane. A very sad state of affairs for everybody, not just in Europe.

I honestly don't see how the business case of the pax 380 has anything to do with freighter sales. It isn't like airlines bought both, most of the freighters were from freight only carriers and the rest were from a leasing firm. That said, I do think that we could see the death of the freighter which I don't think is the worst thing to happen to program at this point.

Quoting Curmudgeon (Reply 9):
The recent QF option conversions will not offset this cancellation, by the way. The additional eight frames contribute little to the A380 programme costs, according to the Sydney rumour mill.

This is likely due to the fact that Airbus is simply going to apply payments that would be due to QF because of the delays to the 380 program to the cost of the new planes. This is a win-win scenario for both parties, so long as QF actually want the plane (and it seems that QF does, otherwise they would have just asked for the cash or some other deal). Essentially, Airbus doesn't have to pay out directly to QF in cash and secures additional orders for the program and QF gets a plane they can use at a better deal. Clearly this isn't the best deal for Airubs, as they would prefer not to have to pay anything, but that isn't a choice they have. There is no way that I believe that Airbus is giving QF the new 380s/330s at a price below the cost of the 380 minus the concession payments (i.e., if you added the payments to the cost of the deal for QF, you will get some value above the manufacturing cost of the 380).

cheers.
 
eatmybologna
Posts: 375
Joined: Sat Apr 30, 2005 3:21 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:04 pm

Sorry if this is a stupid question but, why should UPS cancel their order of A380Fs just because of FedEx's cancellation like many of you members are suggesting? UPS is a worldwide leader in synchronized commerce and is very proactive, not reactive. I don't see anything that would push or influence UPS to make such a move.

Regards,

E-M-B
Isn't knowledge more than just the acquisition of information? Shouldn't the acquired information be correct?
 
User avatar
lightsaber
Crew
Posts: 11829
Joined: Wed Jan 19, 2005 10:55 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:08 pm

From the old thread on range of freighters:

Quoting SSTsomeday (Reply 285):

So I have got this wrong?

No, but Fedex needs trans-Pacific hauling to Asia. I am guestimating that they want a non-stop OAK-SHA (skipping ANC). MEM-SHA at 6457nm is just too far as is IND-SHA. Of course, I'm going from memory that FedEx is opening a hub at SHA in 2008... There has to be some value to getting a certain fraction of the freight moving faster and bypassing ANC to the OAK distribution center. Thus why the 748F's range isn't enough. As I noted, Cest la vie. FedEx has their priorities and should purchase the best fleet to make the most money per their business plan.  Smile

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
osiris30
Posts: 2310
Joined: Sat Sep 30, 2006 10:16 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:09 pm

Quoting Eatmybologna (Reply 12):
why should UPS cancel their order of A380Fs

UPS has already been making noises about cancelling.. it's not that they would cancel because Fedex cancelled, but rather that they wouldn't cancel if Fedex didn't (public perception, etc.)
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
Indy
Posts: 3941
Joined: Thu Jan 20, 2005 1:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:24 pm

Quoting Eatmybologna (Reply 12):
Sorry if this is a stupid question but, why should UPS cancel their order of A380Fs just because of FedEx's cancellation like many of you members are suggesting? UPS is a worldwide leader in synchronized commerce and is very proactive, not reactive. I don't see anything that would push or influence UPS to make such a move.

Look at how fast FX can get the 777's delivered. When is UPS going to get their A380's? Can they wait what could be many years to get deliveries? What if Airbus scraps the program completely because they simply cannot get it done? The UPS has to place orders for other jets and be all the way at the end of the line and will have to wait many more years for deliveries. This could put them far behind FX.
Indy = Indianapolis and not Independence Air
 
Areopagus
Posts: 1327
Joined: Thu Sep 20, 2001 12:31 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:35 pm

Quoting Elvis777 (Reply 8):
Also, why are we to agree that this aircraft is well designed? As a courtesy I am going to say it is, but doesn’t the design of an aircraft encompass integration of electrical systems?

Sure it does. But it's like an American football team that is of championship caliber in every way except for one cornerback who keeps giving up touchdowns. Everyone else is doing a fine, fine job, but their efforts are sabotaged by that one weak spot. People here are just trying to give recognition to the majority of the players who are competent, even if the team loses.
 
Curmudgeon
Posts: 682
Joined: Wed Oct 25, 2006 7:19 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:46 pm

Quoting Dank (Reply 11):
This is likely due to the fact that Airbus is simply going to apply payments that would be due to QF because of the delays to the 380 program to the cost of the new planes. This is a win-win scenario for both parties, so long as QF actually want the plane (and it seems that QF does, otherwise they would have just asked for the cash or some other deal). Essentially, Airbus doesn't have to pay out directly to QF in cash and secures additional orders for the program and QF gets a plane they can use at a better deal. Clearly this isn't the best deal for Airbus, as they would prefer not to have to pay anything, but that isn't a choice they have. There is no way that I believe that Airbus is giving QF the new 380s/330s at a price below the cost of the 380 minus the concession payments (i.e., if you added the payments to the cost of the deal for QF, you will get some value above the manufacturing cost of the 380).

The first $A104 million liquidated damages has already been booked by QF as related in mandatory market advice. (This was pre Delay3). Additional damages for the third delay were estimated at $A30-40 million, but have not been disclosed probably due to, as you surmised, being folded into the option conversion price. Whatever the final number is, it has been (strongly) rumoured to be slightly less than the net price paid for the original frames including penalties. This suggests a price somewhere near $145-155 u.s. mark.

I think that QF is quite happy to extract maximum benefit from any supplier, Airbus included. They are not really disadvantaged in the near term, because nobody has A380's. When the aeroplane is available, especially at fire sale prices, then they'll have to have them. It should be telling, however, that right now, when there is blood in the water and the best deals are to be had, that QF is converting only EIGHT options. QF is one of the A380's few natural customers, and they have measured the market and decided on twenty*. This does not bode well for the sale of 263 more frames in a timely fashion.

Speaking of 'timely fashion', aren't some of QF's conversions for 2015 delivery? If so, they do nothing for the 2011-2015 period which Airbus needs to be robust.

*compared to a stated need for 'up to 115' B787 frames.

Happy trails...
Jets are for kids
 
User avatar
lightsaber
Crew
Posts: 11829
Joined: Wed Jan 19, 2005 10:55 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 3:50 pm

Quoting Indy (Reply 15):
This could put them far behind FX.

One nitpick: UPS has a much higher bond rating than FX. Thus, if they decided to buy more aircraft, it would be far easier for them to borrow money than FedEx who only has a BBB bond rating (a mere 2 notches above junk). UPS sits on a AAA bond rating. Big differnce in the ease of borrowing cash....


Thus UPS could supliment the A380's with 747F's or 777F's. FedEx really had a choice of one or the other as it isn't very viable to have a fleet of only 5 A380's for them (not enough commonality).

Lightsaber
"They did not know it was impossible, so they did it!" - Mark Twain
 
WingedMigrator
Posts: 1769
Joined: Wed Oct 26, 2005 9:45 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:09 pm

Quoting Curmudgeon (Reply 9):
The spectre of a programme cancellation for the A380F is now real, as has been pointed out earlier in the thread. I am wondering if Airbus and UPS are playing at brinkmanship on the other ten orders? UPS has, as you recall, converted previous orders to the A380 and most likely faces losses for cancelling now.

Or, UPS could quite coincidentally become a launch customer for the A330F? While UPS has a strong incentive to cancel, Airbus has a growing incentive to put the A380F on ice for a while. Sounds like a win-win if the A330F (sporting Trent 1000 / GEnx derivatives, of course!) has a place in UPS's network.
 
FXfan
Posts: 83
Joined: Tue Oct 24, 2006 6:40 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:20 pm

Is this due primarily to success on FDX's part, or on the failures of Airbus?
 
andessmf
Posts: 5689
Joined: Wed Jan 25, 2006 8:53 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:21 pm

Quoting WingedMigrator (Reply 19):
Or, UPS could quite coincidentally become a launch customer for the A330F? While UPS has a strong incentive to cancel, Airbus has a growing incentive to put the A380F on ice for a while.

Now there is a good idea. Remember that the UPS order was in exchange for 37 cancelled A36s. They might do the same with an airplane that may better suit their needs.
 
User avatar
fxramper
Posts: 5837
Joined: Sun Dec 04, 2005 12:03 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:27 pm

Quoting Indy (Reply 5):
It is a bit of a shame because I was hoping to catch a FX 380 coming to IND. But guess that won't happen. Maybe I'll see a 777 which is impressive itself here.

Your getting at least 1x daily 777F, IND-CAN.

Might get more once we accept the 15 other options!

 airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane  airplane 
 
Indy
Posts: 3941
Joined: Thu Jan 20, 2005 1:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:29 pm

Quoting Lightsaber (Reply 18):
One nitpick: UPS has a much higher bond rating than FX. Thus, if they decided to buy more aircraft, it would be far easier for them to borrow money than FedEx who only has a BBB bond rating (a mere 2 notches above junk). UPS sits on a AAA bond rating. Big differnce in the ease of borrowing cash....

Getting cash will be a non factor in my opinion. The problem will be UPS' place in queue when it comes to getting jet deliveries. If they don't move soon how long will they have to wait for deliveries of Boeing products?
Indy = Indianapolis and not Independence Air
 
elvis777
Posts: 346
Joined: Sat Aug 20, 2005 9:23 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:34 pm

Hi Aeropagus,

Quoting Areopagus (Reply 16):
Sure it does. But it's like an American football team that is of championship caliber in every way except for one cornerback who keeps giving up touchdowns. Everyone else is doing a fine, fine job, but their efforts are sabotaged by that one weak spot. People here are just trying to give recognition to the majority of the players who are competent, even if the team loses.

To use your analogy (example?): A team wins and loses together. No one is singled out. I think that is a mantra of our beloved NFL (save T. Owens and a couple of others). So, although I am sure that they (eads) have engineering talent, this does not translate to a well engineered bird. If we want to give credit to the wing designers (for example) they can be recognized without mentioning the whole aircraft, if that is what they want. Although, if the team loses, I don’t think they would seek the recognition.

Would the Apollo program be called a well engineered program if it had failed? What about the Concorde? On the latter, I think we can agree that it was an adventurous and innovative (although the SST and Tu 144 were right there as well)design. And after several years we can now say that it indeed was well engineered (the wing tank aside, right?) bird. It earned that distinction. The 380 whalejet may one day earn that distinction. But right now I think it is premature to say that it is well engineered when there is a paucity of performance data (aside from those LH pilots).
So, although it has a lower landing speed than predicted this alone does not make it a 'well' engineered bird. Questions still remain(Wake issues, wing issues, weight issues, integration issues, manufacturingn issues,....).

So yes, as a courtesy I will say that it looks like it is well engineered. But lets wait for it to earn its wings if you would before we lay prostrate before this grandeur of engineering.

Peace

Elvis777
Leper,Unevolved, Misplaced and Unrepentant SportsFanatic and a ZOMBIE as well
 
Curmudgeon
Posts: 682
Joined: Wed Oct 25, 2006 7:19 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:37 pm

Quoting Dank (Reply 11):
Quoting Curmudgeon (Reply 9):
This cancellation could spell the end of the freighter, which in turn invalidates the already optimistic business case for the aeroplane. A very sad state of affairs for everybody, not just in Europe.

I honestly don't see how the business case of the pax 380 has anything to do with freighter sales. It isn't like airlines bought both, most of the freighters were from freight only carriers and the rest were from a leasing firm. That said, I do think that we could see the death of the freighter which I don't think is the worst thing to happen to program at this point.

Because the business case for the entire program depended on selling some freighters. It doesn't matter who ordered, it matters that they get delivered. Of the 167 orders booked last week, 25 were for freighters. If all freighter orders disappear, then the order book looks even more meager, and the case for truncating or terminating the entire program becomes stronger. (Although the time for that may be behind us, there are still hefty costs that will have to be borne that may not be recouped. I'd expect that the monetary costs of cancellation are pretty close to the costs of continuing at this point.)
Jets are for kids
 
ikramerica
Posts: 13762
Joined: Mon May 23, 2005 9:33 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 4:52 pm

Quoting Indy (Reply 1):
But it was a bold move by FX considering the changes they made in MEM including the huge hangar for the A380.

That Hanger will be just as useful for 748Fs and 777Fs and other planes.

Quoting Leelaw (Reply 4):
This is the first time since 1983 that FedEx has ordered new production freighters from Boeing, he said.

They were the last customer for the 727, though they didn't ORDER the 727 in 1983, but took their last delivery in that year. The article you quote is a bit inaccurate there...

Quoting Curmudgeon (Reply 9):
converted previous orders to the A380 and most likely faces losses for cancelling now.

Highly doubtful. The delays likely give UPS a "once in a lifetime" way to get out of their contracts with Airbus entirely without losing money. They couldn't get out of the A306F contracts, so they converted them to A380Fs, but a deposit is a deposit, and if the A380F contract has an out clause for substantial delays, UPS should be able to exercise it.

Quoting Eatmybologna (Reply 12):
Sorry if this is a stupid question but, why should UPS cancel their order of A380Fs just because of FedEx's cancellation like many of you members are suggesting? UPS is a worldwide leader in synchronized commerce and is very proactive, not reactive. I don't see anything that would push or influence UPS to make such a move.

I think it could be Airbus that makes the move, and UPS and Airbus (and ILFC) will come to terms to end the program.

Quoting AndesSMF (Reply 21):
Now there is a good idea.

Thanks! I suggested that as an alternative in the previous thread regarding UPS potentially canceling the A380F.  Wink
Of all the things to worry about... the Wookie has no pants.
 
Woosie
Posts: 104
Joined: Sun May 14, 2006 3:47 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 5:07 pm

Quoting Indy (Reply 1):
It may have been said in the other discussion but who wants to read through 200+ posts?

Acutally, I just did. I've seen all 195 MD-11's being built, as well as each DC-10 to MD-10 conversion. I'm a bit biased... I tried to comment on a number of those posts who think FX is planning to immediately retire some of their DC-10/MD-10/MD-11 airplanes. As far as I can tell, FX isn't doing so...now. Perhaps in a decade or so but not now.

Quoting SSTsomeday (Reply 6):
I just thought this post was worthy of being transfered to the new thread. Amazing how taking the high road brings with it a sense of truth and balance, doesn't it?

Great post from N31029 but it's not what I'd call "high road"; rather, it's a hopeful look into the future. That said, the future of the A380 is not decided by one customer but by many. Having seen first-hand how customers sway opinions of others, however, trends can be very damning. So watch for A380 trends to see what the future means!
 
Curmudgeon
Posts: 682
Joined: Wed Oct 25, 2006 7:19 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 5:09 pm

Quoting Ikramerica (Reply 26):
Quoting Curmudgeon (Reply 9):
converted previous orders to the A380 and most likely faces losses for cancelling now.

Highly doubtful. The delays likely give UPS a "once in a lifetime" way to get out of their contracts with Airbus entirely without losing money. They couldn't get out of the A306F contracts, so they converted them to A380Fs, but a deposit is a deposit, and if the A380F contract has an out clause for substantial delays, UPS should be able to exercise it.

I can't recall the thread right now, but I remember a post a few weeks ago that claimed that UPS wasn't able to get great cancellation terms in their contract since it was a conversion from the A306F. UPS was cited as an iffy order for various reasons, among them the advent of the perhaps better 748F. I was caught in the trap of looking for a reason for UPS maintaining their order in the face of overwhelming A.net advice to the contrary. (Don't they listen? )  Wink
Jets are for kids
 
Joni
Posts: 2613
Joined: Thu Aug 10, 2000 11:05 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 5:19 pm

A regrettable setback for the A380F program, but not unexpected as even Airbus said that some airlines may cancel due to the delivery delays.

Airbus lost one order, but there will be others to make up for it.
 
dougbr2006
Posts: 241
Joined: Mon Oct 02, 2006 11:44 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 7:24 pm

No penalty clause for cancellation !!!!

We all know that th A380 programme is off course but surely Airbus got deposits on these frames, it would unusual for no penalty clause be slapped on a cancellation late programme or not. Does anyone know if deposits were paid !!!!!!
 
halls120
Posts: 8724
Joined: Sun Jun 05, 2005 3:24 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 7:30 pm

Quoting Indy (Reply 15):
Quoting Eatmybologna (Reply 12):Sorry if this is a stupid question but, why should UPS cancel their order of A380Fs just because of FedEx's cancellation like many of you members are suggesting? UPS is a worldwide leader in synchronized commerce and is very proactive, not reactive. I don't see anything that would push or influence UPS to make such a move.
Look at how fast FX can get the 777's delivered. When is UPS going to get their A380's? Can they wait what could be many years to get deliveries? What if Airbus scraps the program completely because they simply cannot get it done? The UPS has to place orders for other jets and be all the way at the end of the line and will have to wait many more years for deliveries. This could put them far behind FX.

In addition, as another poster noted earlier, the price of specialized cargo handling equipment for the A380F will go up if there are fewer units built.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
aa1818
Posts: 1516
Joined: Sat Feb 04, 2006 2:03 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 8:38 pm

Quoting Dougbr2006 (Reply 30):
No penalty clause for cancellation !!!!

We all know that th A380 programme is off course but surely Airbus got deposits on these frames, it would unusual for no penalty clause be slapped on a cancellation late programme or not. Does anyone know if deposits were paid !!!!!!

Of course there were penalities in teh contract. However airlines, at this point in time can probably cancel without penalty, which is probably also in the contract since Airbus are in breach of contract. Remember the A380 is going to be 10 more months late (per Oct 2006) which puts it about 2 years behind initial plan. Given this breach, airlines have the option of opting out without penalty, seeking compensation or perhaps if they were malicous they could probably bring legal action is airbus refused a cancellation and/ or compensation.

AA1818
“The moment you doubt whether you can fly, you cease for ever to be able to do it.” J.M. Barrie (Peter Pan)
 
Curmudgeon
Posts: 682
Joined: Wed Oct 25, 2006 7:19 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 9:24 pm

Check out this news story about the EADS Q3 results. In it, the Airbus CFO is quoted as saying all the freighter orders were "in the cancellation zone":

http://www.iht.com/articles/ap/2006/...iness/EU_FIN_EARNS_France_EADS.php
Jets are for kids
 
User avatar
Revelation
Posts: 13841
Joined: Wed Feb 09, 2005 9:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 11:01 pm

Quoting N31029 (Reply 6):
As an ardent aviation enthusiast first and foremost, I am saddened at this cancellation news. Whether we hold allegiance to Boeing or Airbus, a beautiful new aircraft type - gracing the skies - is something to be excited about. A terminated order is not.

An airplane launched with a flawed business case right from the start is not something to celebrate. In the long term, all it does is damage the industry. One can speculate that one reason why the A350XWB is having difficulties being launched is due to the way investors feel about the A380 right now.

Quoting N31029 (Reply 6):
We are all here to celebrate our shared passion for the commercial aviation industry. And whether our preference is for Manufacturer A or Manufacturer B, the potential demise of an inherently well-designed and innovative aircraft type can never be seen as a positive.

Potential demise? Aren't we getting way ahead of reality here?

Quoting N31029 (Reply 6):
Obviously, the real world has interceded - finally - into the A380 program. And that is unfortunate because as a young company Airbus has many successes to its credit. And, further frustrating is the fact that the type itself appears to have been successfully engineered and destined to fill a unique void in the commercial aircraft marketplace.

As someone who makes his living as an engineer, I can tell you the A380 was not successfully engineered! The reason this order was cancelled was because the customer did not get what they ordered on time. Also the customer had lost faith that Airbus could meet their future delivery schedule. Engineering includes not only logical design, but physical design and implementation too. And all need to be done on time and on budget. Airbus failed to do this.

The difference between academia and engineering is that in acedemia we ignore friction, and in engineering, it's all about the friction!

Quoting SSTsomeday (Reply 6):
I just thought this post was worthy of being transfered to the new thread. Amazing how taking the high road brings with it a sense of truth and balance, doesn't it?

In my opinion (I'm still allowed to have one, no?), the post was well-intentioned and balanced, but the highs were too high, and the lows were too low.
Inspiration, move me brightly! Light the song with sense and color.
Hold away despair, more than this I will not ask.
Faced with mysteries dark and vast, statements just seem vain at last.
Some rise, some fall, some climb, to get to Terrapin!
 
leelaw
Posts: 4520
Joined: Sat May 29, 2004 4:13 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 11:09 pm

FOCUS: Future Of Airbus' A380 Freighter Looks In Doubt

LONDON (Dow Jones)--Airbus could be forced into an embarrassing cancellation or mothballing of its A380 freighter plane program following the loss of key customer FedEx Corp...

...Hans Peter Ring, chief financial officer for Airbus parent company European Aeronautic Defence & Space Co., said the two remaining freighter orders are in the "cancellation zone."

UPS has ordered 10 A380 freighters while leasing giant ILFC has bought five. EADS' Ring - who will also become Airbus CFO in January - said Airbus is looking to reconfirm the UPS and ILFC orders and will take a decision on going forward with the program once these customers have made up their minds. Airbus, however, said on Tuesday it remains committed to the freighter program.

"If they can't sell to FedEx, they can't sell to anybody," said Doug McVitie of France-based aviation consultancy Arran Aerospace Ltd.. "If you take ILFC, which has five freighters on order, who are they for if there are no customers?"

Ring's comment on the state of the remaining A380 cargo orders "virtually confirms" that UPS will cancel, McVitie said. UPS has said it's still reviewing its order and has made no decision on whether to keep it.

Daniel Solon, an aerospace industry analyst with Avmark International Ltd. in Barcelona, said ILFC's ultimate decision on its order depends on how it views the potential market to lease the planes out.

Solon said the future of the A380 cargo plane is clearly in doubt, although Airbus might look to delay it rather than kill it outright. "I could see the freighter program at risk in terms of timeframe. Obviously it would be an enormous embarrassment to Airbus and EADS if they had to cancel the A380 freighter program," he said...

...Yan Derocles, an analyst with Oddo Securities in Paris, added that canceling the order isn't that straightforward for UPS although it retains the option. In particular, when UPS placed the firm order for the 10 freighters back in 2005, it agreed to amend its order for smaller A300 freighters to 53 from 90.

McVitie of Arran Aerospace added that working against the UPS order is a rumored move by FedEx and UPS to establish a joint A380 maintenance facility in Europe. FedEx's cancellation would work against the economics of this move if it occurs, he said. UPS, however, said in a statement it isn't looking to build a maintenance hangar in Europe at this stage and is planning to expand its maintenance hangar in Louisville, Ky...


http://online.wsj.com/article/BT-CO-20061108-707720.html

[Edited 2006-11-08 15:14:15]
Lex Ancilla Justitiae
 
Adria
Posts: 781
Joined: Wed Aug 09, 2000 7:53 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 11:22 pm

Quoting Garri767 (Thread starter):
and like someone said in the older thread, i bet FX ends up taking old/used A380s and converting them into A380F's.

It looks like FX has a strategy change. They obviously don't need a VLA freighter otherwise the 747F would be their choice. The 777 is much smaller than the A380 or 747.

Quoting RayChuang (Reply 10):
I think Airbus maybe closer to the cancellation of the A380 program than you think. I think they realize that Airbus should cut its losses and concentrate on the A350XWB, which will be better-suited for more airlines than the A380.

Cancellation of the programme? No way at this stage. No one can predict how many A380s are going to fly around the world in 20-30 years. The A380 is just about to start to make money for Airbus (if performance is OK and the EIS will finally come).

Quoting Osiris30 (Reply 14):
UPS has already been making noises about cancelling.. it's not that they would cancel because Fedex cancelled, but rather that they wouldn't cancel if Fedex didn't (public perception, etc.)

The A380 could be a long-term advantage for UPS but only if they can fill the aircraft with cargo. So a cancellation would mean a "no" to the VLA freighter market and since Boeing is counting on that market with their "new" 748, this is bad news for both manufacturers.
 
User avatar
Revelation
Posts: 13841
Joined: Wed Feb 09, 2005 9:37 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 11:31 pm

Quoting Woosie (Reply 27):
I tried to comment on a number of those posts who think FX is planning to immediately retire some of their DC-10/MD-10/MD-11 airplanes. As far as I can tell, FX isn't doing so...now. Perhaps in a decade or so but not now.

I'm sorry if one of my posts gave you that impression. What I was trying to say is that we now know have a very strong clue as to how FX will be replacing the DC10/MD10/MD11 when it is time to do so: by 777 pax to freighter conversions. As Mr. Smith has now made clear, the 777Fs are for expansion, namely the new China hub opening up in 2008.
Inspiration, move me brightly! Light the song with sense and color.
Hold away despair, more than this I will not ask.
Faced with mysteries dark and vast, statements just seem vain at last.
Some rise, some fall, some climb, to get to Terrapin!
 
katekebo
Posts: 678
Joined: Sat Apr 14, 2001 12:02 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Wed Nov 08, 2006 11:33 pm

Quoting Adria (Reply 36):
It looks like FX has a strategy change. They obviously don't need a VLA freighter otherwise the 747F would be their choice. The 777 is much smaller than the A380 or 747.

The reason for FedEx selection is timing - they will start receiving first B777Fs in late 2008. The B748F is sold-out for the next 4 years. FedEx needs additional capacity ASAP.

Quoting Adria (Reply 36):
So a cancellation would mean a "no" to the VLA freighter market and since Boeing is counting on that market with their "new" 748, this is bad news for both manufacturers.

Boeing got 41 orders for the B747 this year so far, this clearly prooves that there is big demand for large freighters.

[Edited 2006-11-08 15:43:52]
 
User avatar
N328KF
Posts: 5810
Joined: Tue May 25, 2004 3:50 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 12:25 am

Quoting Curmudgeon (Reply 33):
Check out this news story about the EADS Q3 results. In it, the Airbus CFO is quoted as saying all the freighter orders were "in the cancellation zone":

This is an important point that didn't escape my notice, either. I was just about to post it in.

This means that UPS can now do what they wanted to do long ago— get their deposits back for the 37 A300-600Fs. If UPS bails, how likely do you think ILFC is to stick around?
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
Flaps
Posts: 1176
Joined: Sat Feb 05, 2000 1:11 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 12:37 am

At last!!!!

I have been waiting for my former employer to finally come to their senses. The A380 is too large for all but a tiny fraction of FedEx markets. Those that can support it are better served with multiple frequencies. The infrastucture costs and complications simply outweigh any potential benefit. I expect to see simalar actions by UPS.
 
dank
Posts: 926
Joined: Thu Jul 20, 2006 11:35 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 12:41 am

Quoting Katekebo (Reply 38):

The reason for FedEx selection is timing - they will start receiving first B777Fs in late 2008. The B748F is sold-out for the next 4 years. FedEx needs additional capacity ASAP.

 checkmark  Timing, timing, timing.

Quoting Adria (Reply 36):
It looks like FX has a strategy change. They obviously don't need a VLA freighter otherwise the 747F would be their choice. The 777 is much smaller than the A380 or 747.

It looks to me more like Fed Ex has a change in public strategy because the plane available to them at the right time is different. Which do you think came first, the decision to look at switching the order because of timing or a shift in strategy. I think Airbus, with the ton of delays, was the bigger factor in shifting strategy than Fed Ex saying that the strategy changed so they had to look at swapping orders. If Airbus could have delivered the 380 on time (before the last two delays), I think Fed Ex would be singing a different tune.

Quoting N328KF (Reply 39):
This means that UPS can now do what they wanted to do long ago— get their deposits back for the 37 A300-600Fs. If UPS bails, how likely do you think ILFC is to stick around?

I wonder if UPS has that luxury since their contract may be substantially different than other carriers because they already had substantial discounts. Maybe some 330Fs in their future??

cheers.
 
Adria
Posts: 781
Joined: Wed Aug 09, 2000 7:53 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 12:42 am

Quoting Katekebo (Reply 38):
The reason for FedEx selection is timing - they will start receiving first B777Fs in late 2008. The B748F is sold-out for the next 4 years. FedEx needs additional capacity ASAP.

So a 4 year waiting list is one reason more to order the 748F if they needed a VLA freighter. They also could buy some used 747s and convert them to freighters...so if they wanted a VLA freighter they could get one very soon (or sooner than the 777Fs)...this is probably some shift in the strategy...
 
dank
Posts: 926
Joined: Thu Jul 20, 2006 11:35 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:05 am

Quoting Adria (Reply 42):
So a 4 year waiting list is one reason more to order the 748F if they needed a VLA freighter. They also could buy some used 747s and convert them to freighters...so if they wanted a VLA freighter they could get one very soon (or sooner than the 777Fs)...this is probably some shift in the strategy...

Hunh? They can get the 777 earlier and it has better range than the 748. THe 777F is available in the exact time frame that they expected their 380Fs. So, you get a plane with similar overall capacity (3 777s per 2 380s) at the same time your business plan expected it. Whereas, if you get the 748s in 2010 at the earliest, you are delayed just like you would have been with the 380. Doesn't really seem like the strategy has changed drastically, and what has has done so in order to accomodate the fact that they had to switch planes to get capacity at the right time (and that the stated strategy was forced to shift to accomodate the fact that they were forced to switch planes in order to get new capacity in 2008).

cheers.
 
ikramerica
Posts: 13762
Joined: Mon May 23, 2005 9:33 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:05 am

Quoting Katekebo (Reply 38):
The reason for FedEx selection is timing - they will start receiving first B777Fs in late 2008. The B748F is sold-out for the next 4 years. FedEx needs additional capacity ASAP.

Also, the 777F is a long distance package freighter option while the 748F is a medium range heavy lift aircraft.

The problem I saw with the A380F was that it could only bypass hubs with package freight, yet it was incredibly large, so the concept of filling the whole thing for a "point to point" express service didn't make that much sense to me.

The 777F is much smaller, so FedEx can connect major cities with a hub bypass and fill it efficiently. The 777F has 23k cu ft, the MD11 has 19k cu ft, the will have 748F has 30 cu ft and the A380F would have 40k cu ft.

The business case for flying the 777F point to point is just stronger as a package freighter due to size and efficiency just as the case is stronger for the 748F as a heavy lift freighter due to higher density, and again, this wasn't an option when FedEx signed for the A380F in the first place.

Quoting N328KF (Reply 39):
This means that UPS can now do what they wanted to do long ago— get their deposits back for the 37 A300-600Fs. If UPS bails, how likely do you think ILFC is to stick around?

I wonder if UPS might look to ILFC to cancel their planes first. Does UPS get other planes from ILFC? Would some sort of agreement to lease planes from ILFC in exchange for ILFC canceling their A380F order make sense?

The reason I ask is that if the truth really is that UPS can't cancel 100% on their own, they may need to be the only customer left so that Airbus and UPS can "mutually decide" to cancel the A380F program.
Of all the things to worry about... the Wookie has no pants.
 
Adria
Posts: 781
Joined: Wed Aug 09, 2000 7:53 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:09 am

Quoting Dank (Reply 43):
Hunh? They can get the 777 earlier and it has better range than the 748. THe 777F is available in the exact time frame that they expected their 380Fs. So, you get a plane with similar overall capacity (3 777s per 2 380s) at the same time your business plan expected it. Whereas, if you get the 748s in 2010 at the earliest, you are delayed just like you would have been with the 380. Doesn't really seem like the strategy has changed drastically, and what has has done so in order to accomodate the fact that they had to switch planes to get capacity at the right time (and that the stated strategy was forced to shift to accomodate the fact that they were forced to switch planes in order to get new capacity in 2008).

So why don't convert some 744s, or get MD-11s or something like that. The 777F is a long term investment for FX and since no additional 748Fs have been ordered it seems that they don't need a 748 or A380. But we'll see...
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:12 am

Quoting Lightsaber (Reply 18):
One nitpick: UPS has a much higher bond rating than FX. Thus, if they decided to buy more aircraft, it would be far easier for them to borrow money than FedEx who only has a BBB bond rating (a mere 2 notches above junk). UPS sits on a AAA bond rating. Big differnce in the ease of borrowing cash....

They have bond rating problems, but cancelling the entire order might mean they might have to start from scratch in terms of negotiations......

Given the current situation, they might have been able to get their monies back and kept a "deferred" delivery...

Actually, we dont' know..maybe they worked a negotiation with Airbus where they will get the A380F (if they decide to go with it later) at the price they originally negotiated for...

Quoting Adria (Reply 36):
The A380 is just about to start to make money for Airbus (if performance is OK and the EIS will finally come).

The A380 is a financial sink until 2010...
"Up the Irons!"
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:24 am

Quoting Elvis777 (Reply 8):
And as an ardent AE I can be exited about anything under the skies that involves aviation -including but not limited to an order cancellation

Absolutely. I see nothing I can argue with in terms of the manner of your post as you respectfully and intelligently express your point of view.

What some of us I think find tedious, is when the quality of the conversation is reduced to the kind of trash talk you might hear in a locker room or on the basketball court. What we discuss here, involving intellectual, technical and business related information, becomes less credible when accompanied by bravado, condescension and insult, fueled by emotion and ego (not pointing any fingers here - I'm speaking in general) which often take the place of any comprehensive and useful analysis. What we discuss here is so essentially different in nature than, say, a sports event, it demands different decorum, in my view. However, I would never chide honest enthusiasm. Others might, of course, disagree.

I find that, as with most things in life, there are usually various shades of grey, and very little is black and white. As Boeing fan, I celebrate the sale of 10 777Fs and continue to marvel at that A/C, which was a courageous and forward-looking risk on the part of Boeing, a risk that has paid off handsomely. Yet at the same time I feel the pain of the 1,000s of people at Airbus whose jobs may be at risk as they restructure and struggle with $ losses. As to the 380, I have questioned the business plan for a long time, yet I am impressed by the sheer grandeur of it, at least (which I suppose is emotional more than anything else). As an enthusiast I would like to go on that ride...

Quoting Revelation (Reply 34):
In my opinion (I'm still allowed to have one, no?), the post was well-intentioned and balanced, but the highs were too high, and the lows were too low.

Yes, I believe we are all allowed to have our opinions. I just liked the tone of N31029s post. Some of us may not agree with his assessment of the inherent value or outlook of the 380, but his appeal for members to debate with respect (which is how I read it) appeals to me, because I think it would bring about more comprehensive and useful debate.

I notice how Boeing has consistently taken the high road with regard to any comments they make on Airbus' challenges, and were they to do less it would detract from their credibility, in my eyes.

I find those most polarised in their views, even those, it seems, with access to a lot of information, spin that information to an extent that is becomes more biased than it is usefull.

Quoting Lightsaber (Reply 13):
Fedex needs trans-Pacific hauling to Asia. I am guestimating that they want a non-stop OAK-SHA (skipping ANC). MEM-SHA at 6457nm is just too far as is IND-SHA. Of course, I'm going from memory that FedEx is opening a hub at SHA in 2008... There has to be some value to getting a certain fraction of the freight moving faster and bypassing ANC to the OAK distribution center. Thus why the 748F's range isn't enough. As I noted, Cest la vie. FedEx has their priorities and should purchase the best fleet to make the most money per their business plan.

Thank you for that insight and answering my question. There are those suspecting some undisclosed and ulterior motive, but I suspect the delay with the 380, as well as the reasons your outline above, are sufficient to justify F/Xs course change.
I come in peace
 
User avatar
N328KF
Posts: 5810
Joined: Tue May 25, 2004 3:50 am

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:31 am

Here are two interesting and contrasting articles, both from within the last five days. Brief fair use excerpts from The Chicago Tribune and Bloomberg:

Quote:

Boeing credit rating raised



Boeing Co.'s credit ratings were raised one level by Standard & Poor's amid rising profit and demand for commercial airplanes.

The rating was boosted to A+ from A for the world's second- biggest commercial planemaker and its Boeing Capital Corp. finance unit, S&P said today in a statement. Chicago-based Boeing has about $10 billion of consolidated debt outstanding.

[...]

European Aeronautic, Defence & Space Co., parent of top rival Airbus SAS, had its credit rating cut one level by S&P on Oct. 11 because of ''increased concerns'' over management and competitive challenges. EADS remains on CreditWatch and could be lowered another grade because of Airbus's growing disadvantage against Boeing. The long-term debt was lowered to A- from A.

[...]



Quote:

EADS May Suffer Ratings Cut After Losing FedEx Order



Nov. 8 (Bloomberg) -- European Aeronautic, Defence & Space Co., the parent of Airbus SAS, may have its rating cut after FedEx Corp. canceled a $2.3 billion order and the company posted an unexpected loss, according to traders betting on the creditworthiness of companies in the credit-default swap market.

[...]

Moody's Investors Service, which rates the company A1, the fifth-highest grade, put the rating under review for a possible downgrade on Sept. 22, citing delays with developing the A380, the plane FedEx had ordered. Standard & Poor's on Oct. 11 dropped its rating to A-, two levels lower than Moody's, and said it may reduce it again.

[...]

Boeing credit rating raised
EADS May Suffer Ratings Cut After Losing FedEx Order (Update1)
When they call the roll in the Senate, the Senators do not know whether to answer 'Present' or 'Not guilty.' -Theodore Roosevelt
 
dallasnewark
Posts: 391
Joined: Tue Nov 08, 2005 4:33 pm

RE: FED EX Buys 15 X 777F, Cancels A380F Part II

Thu Nov 09, 2006 1:38 am

Quoting Eatmybologna (Reply 12):
Sorry if this is a stupid question but, why should UPS cancel their order of A380Fs just because of FedEx's cancellation like many of you members are suggesting? UPS is a worldwide leader in synchronized commerce and is very proactive, not reactive. I don't see anything that would push or influence UPS to make such a move.

If one would take a closer look at the history of these 2 companies, FEDEX is the innovator and UPS is the follower. In the shipping business, there are no barriers to entry, they only requirement is the deep pocket. In the past, UPS successfully copied all the innovation and advancements that FEDEX introduced.

It is difficult to imagine a conservative company such as UPS to be caught in this position, it is a matter of when not why they would cancel their order.

UPS does not need the A380 from a business standpoint. UPS is not the one to bring change and innovation into the shipping business, and their pockets are deep enough to incur all the cancellation costs
B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F