797charter
Topic Author
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A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 8:21 pm

Hi!

Please read this article:

http://www.atwonline.com/news/story.html?storyID=7276

"...I think most [A380] customers I've talked to are annoyed," he conceded. "They're clearly upset. But there's no rush to the doors,,,I think the majority of customers will stay."

Nothing really new, but I think the keyword here is MAJORITY, - until now we have seen only one cancellation, but when Mr. Leahy himself is saying majority I am afraid more has to come.
My guess could be Korean and/or Malaysia - but what do you think?


Regards
Steen
Keep it clear of the propellers
 
scouseflyer
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 8:26 pm

Quoting 797charter (Thread starter):
My guess could be Korean and/or Malaysia

Common opinion on here is that both of them want a way out (as they either don't want the plane anymore or have no money) and the delay may be a good excuse.
 
manni
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 8:35 pm

Quoting 797charter (Thread starter):
My guess could be Korean and/or Malaysia - but what do you think?

Korean Air's CEO recently said that they remain commited to the A380 and will take delivery of them. KE not ordering the 748i when they recently placed a huge widebody order, indicates also that the A380 has a future in KE's fleet. I can't see the 773ER becoming KE's largest aircraft. If anything, look out for additional orders from KE rather than cancellations.

As for MH. Your guess is as good as mine. Rumour has it that MH simply can't afford to buy new aircraft now.
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scouseflyer
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 8:40 pm

Quoting Manni (Reply 2):
As for MH. Your guess is as good as mine. Rumour has it that MH simply can't afford to buy new aircraft now.

That's what the head of one of their unions was saying during negotiations recently.
 
2wingtips
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 8:51 pm

UPS are a very likely canceller IMO. It has been reported every 380 order is in the cancellation zone, so why would UPS go it alone with the 380F, when all of the competition is going with the 777f and/or 748F?
China Southern are reported to be looking at swapping 380s for 350s. A likely scenario IMO.
TG and MH are known to be looking closely at their A380 commitment and I'm not sure why Kingfisher ordered them, except they like a very eclectic Airbus WB line-up.
 
columba
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:01 pm

Reports here in Germany are that Thai may cancel if they don´t get compensation payments like other airlines did. They will decide until December 19th.
Sorry in German only:
http://www.aero.de/news.php?varnewsid=1812
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
sq212
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:15 pm

No cancellations: EK, EY, QR, SQ, AF, QF. KE, LH and IT
Deferred (2013 and beyond): VS, ILFC
Not Certain: MH, UPS, CZ, TG
Cancelled: FX

9 out of 16 represents majority. Leahy is right.

Cheers
 
Flying-Tiger
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:17 pm

Quoting 2wingtips (Reply 4):
UPS are a very likely canceller IMO. It has been reported every 380 order is in the cancellation zone, so why would UPS go it alone with the 380F, when all of the competition is going with the 777f and/or 748F?

The A380F might simply be a very good fit for their parcel business, and IMO has a very interesting place in 5X´s fleet. If I´m not completely mistaken, 5X has now a "dual-fleet" - one for regular freight hauling (747-8i, 744ERF = flying the UPSCS stuff) and one for parcels (flying the Parcel stuff). And the A380F is a good parcel freighter.

Quoting 2wingtips (Reply 4):
China Southern are reported to be looking at swapping 380s for 350s. A likely scenario IMO.

That so far is an unsustained rumour and nothing else.

Quoting 2wingtips (Reply 4):
I'm not sure why Kingfisher ordered them, except they like a very eclectic Airbus WB line-up.

India is booming like hell, and sooner or later this will clearly show in international passengers as well. Many people are already saying that India will be the economy of the 21st century, not China. Current growth constrains at many main airports clearly indicate that size DOES matter - and will even more in future. Thus Kingfisher has taken a gamble on the future, and current outlook is that they are right on track.

Quoting Columba (Reply 5):
Reports here in Germany are that Thai may cancel if they don´t get compensation payments like other airlines did

Taking Areo International is source is a joke. Anyway, TG is likely playing a "give me as much as you can" game with Airbus, and part of this game is public threatening. I have doubts that they seriously consider cancelling their order.

Korean Air is unlikely as well - they do need this equipment. MH is another matter - their plans of making KUL a second SIN have largely failed, and thus their need for the A380 more or less as well. Money is the next constraint. However, cancelling these birds will be quite a loss of face, and I seriously don´t know if this will not overrule any economical decision.

Thus my money is on MH as contender for cancellation.
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dutchjet
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:27 pm

While its very hard to draw any real conclusions from the usage of one word in a sentence, I do agree that Leahy saying the "Majority" of A380 customers will remain onboard is noteworthy. He certainly would have said "all" of the reamaining customers plan to accept delivery of the A380 if that was the case....so something is up.

Quoting Sq212 (Reply 6):
No cancellations: EK, EY, QR, SQ, AF, QF. KE, LH and IT
Deferred (2013 and beyond): VS, ILFC
Not Certain: MH, UPS, CZ, TG
Cancelled: FX

9 out of 16 represents majority. Leahy is right.

Cheers

Probably an accurate summary.....although didnt Kingfisher recently report that they are losing lots and lots of money? They could be a problem, nothing to do with the A380, simply a financial issue.

Before everyone gets over excited, lets see how this plays out. While there could be additional cancellations in the coming months, at some point Airbus will sell more A380s to more customers, it will happen, and remember I am a Boeing guy. That the A380 is very late, and that some airlines are very upset with Airbus (Leahy's comment, not mine) has not helped the A380 program, but I do suspect that things will get better once the A380 enters service and proves its capabilities.

[Edited 2006-12-06 13:58:30]
 
slz396
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:48 pm

Quoting Flying-Tiger (Reply 7):
TG is likely playing a "give me as much as you can" game with Airbus, and part of this game is public threatening.

I think the wording 'majority of customers' is also part of this game.

John Leahy is simply creating some 'margin' in his statements because he knows most compensation negotiations are not finished yet and that for some of them there is still a wide gap between what the airline wants and what airbus only offers, thus showing readiness to cope with one or 2 cancellations certainly takes some of the wind away under the ultimate threat to cancel...

Besides, at some point I can think of a scenario where Airbus tells the airline: we're not going to give you that much no matter what you do, because quite frankly if you'd cancel, we'd be recovering some precious delivery slots and thus either save more money by being able to reduce the compensation payment to another customer or even book a new 'full fair' customer in your slot.

As Dutchjet has rightfully said:

Quoting Dutchjet (Reply 8):
At some point Airbus will sell more A380s to more customers; it will happen, and remember I am a Boeing guy. That the A380 is very late and that some airlines are very upset with Airbus (Leahy's comment, not mine) has not helped the A380 program, but I do suspect that things will get better once the A380 enters service and proves its capabilities.

Airbus need to maximize the revenue generated from the (limited) production line and if this can be optimized by pushing some smaller customers like TG or MH to the door, then it might even proof to be a good strategy to let them know their orders have been and are still very welcome, but not at whatever cost to the company. A correct amount of compensation must be paid to them, but Airbus should and apparently is not willing to pay them to stay on board of a program when the production simply can't follow up on demand (albeit due to the delays).
 
dutchjet
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:57 pm

Quoting Slz396 (Reply 9):

Airbus need to maximize the revenue generated from the (limited) production line and if this can be optimized by pushing some smaller customers like TG or MH to the door, then it might even proof to be a good strategy to let them know their orders have been and are still very welcome, but not at whatever cost to the company. A correct amount of compensation must be paid to them, but Airbus should and apparently is not willing to pay them to stay on board of a program when the production simply can't follow up on demand (albeit due to the delays).

Interesting comment.....Airbus does have to move along and get out of its ""panic mode"", that being paying whatever compensation is necessary to keep A380 customers onboard. It not a good strategy. While I am not sure what to believe concerning compensation to be paid by Airbus to A380 customers in consideration of the delay, the entire exercise has cost Airbus dearly financially and Airbus did lose a lot of credibility. As stated, is time to move along.

Airbus cannot protect A380 orders at any cost, and some carriers may cancel.
 
797charter
Topic Author
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 9:59 pm

Quoting Sq212 (Reply 6):
No cancellations: EK, EY, QR, SQ, AF, QF. KE, LH and IT
Deferred (2013 and beyond): VS, ILFC
Not Certain: MH, UPS, CZ, TG
Cancelled: FX

9 out of 16 represents majority. Leahy is right.

Don't misunderstand me, - I am sure Leahy is right.
On the other hand he may not tell us all what he know, - at the moment.

Personally I would hate to see more cancellations, but who knows...

Quoting Dutchjet (Reply 8):
While its very hard to draw any real conclusions from the usage of one word in a sentence, I do agree that Leahy saying the "Majority" of A380 customers will remain onboard is noteworthy. He certainly would have said "all" of the reamaining customers plan to accept delivery of the A380 is that was the case....so something is up.

   Just what I tried to express


Regards

Steen

[Edited 2006-12-06 14:16:50]
Keep it clear of the propellers
 
slz396
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 10:22 pm

Quoting Dutchjet (Reply 10):
Interesting comment....
I think we can agree it is a rational comment though.

As you say,

Quoting Dutchjet (Reply 10):
Airbus cannot protect A380 orders at any cost, and some carriers may cancel.
A modest number of cancellations (let's say 2 to 3 customers for 5 to 10 A308s each) will not have a dramatic influence on Airbus balance sheet for the coming years, since with the revised production and delivery scheme Airbus A380 line is sold out for many years to come (till 2011, 2012, something like that?) so they have a very long time span to sell more lucratively priced A380s to new customers for them not having to go really beyond what has been contractually stipulated on compensation payments in order to keep small customers like TG on board.

It just wouldn't make any sense from a financial point of view and I think that is just the line Airbus is actively pursuing in the negotiations with the airlines, hence the fact these negotiations appear to proceed very slowly...

[Edited 2006-12-06 14:24:23]
 
dutchjet
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 10:25 pm

Quoting Slz396 (Reply 12):
I think we can agree it is a rational comment though.

Very rational, very interesting and very correct (I hope that you did not mistake my intent.)
 
leelaw
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 10:58 pm

IMO, it should be a matter of grave concern in Toulouse that ILFC has deferred its order, which means that despite years of marketing efforts, Mr. Udvar-Hazy & Co. have been unable to place a single A380 (ten or fewer) with airline operators by means of operating leases before 2013. Sad
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WINGS
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 11:04 pm

Quoting Leelaw (Reply 14):
IMO, it should be a matter of grave concern in Toulouse that ILFC has deferred its order, which means that despite years of marketing efforts, Mr. Udvar-Hazy & Co. have been unable to place a single A380 (ten or fewer) with airline operators by means of operating leases before 2013. Sad

Don't forget that EK was to lease 2 A380's from ILFC. It has been mentioned that Airbus is negotiating with EK for them to take those 2 frames directly from Airbus.

Regards,
Wings
Aviation Is A Passion.
 
leelaw
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 11:41 pm

Quoting WINGS (Reply 15):
Don't forget that EK was to lease 2 A380's from ILFC. It has been mentioned that Airbus is negotiating with EK for them to take those 2 frames directly from Airbus.

This mitigates the damage slightly, but it doesn't change the fact that the A380 has been a bust on the leasing market so far. ILFC's ability to place Airbus aircraft with operators has been a key element in the airframer's success over the last 15-20 years.
Lex Ancilla Justitiae
 
Dougloid
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Wed Dec 06, 2006 11:44 pm

Quoting Slz396 (Reply 9):
Airbus need to maximize the revenue generated from the (limited) production line and if this can be optimized by pushing some smaller customers like TG or MH to the door, then it might even proof to be a good strategy to let them know their orders have been and are still very welcome, but not at whatever cost to the company. A correct amount of compensation must be paid to them, but Airbus should and apparently is not willing to pay them to stay on board of a program when the production simply can't follow up on demand (albeit due to the delays).

That's an interesting statement. I don't think that Airbus can afford to take on any more water in the A380 program. They're simply not in a position to throw anyone to the wolves right now because the entire A380 program is on the thinnest of thin ice. Its survival is dubious.

That pains me because it'll mean job losses here in the states for all my mates at Goodrich...

In addition what you suggest would be suicidal for any marketing department-the objective right now is to place the product and stem the bloodletting, not to start cutting people loose. I would conclude that rather than tossing money at the operators willy nilly, the amount of compensation any operator gets for program delays would be something that's part of the contract for sale, which I am sure Airbus never figured they'd have to pay off on.

As Yogi Berra said, people are staying away in droves and ANY more bad publicity, delays, screwing the customers or anything like what we've seen so far could well be the tipping point at which the entire program goes in the dumpster.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
TeamAmerica
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:15 am

Quoting Slz396 (Reply 9):
save more money by being able to reduce the compensation payment to another customer

 no There is no chance that the compensation due to another customer would exceed the revenue to be booked by delivering an A380. None.

Quoting Slz396 (Reply 9):
or even book a new 'full fair' customer in your slot.

This contradicts what you implied above. If a customer cancels, subsequent deliveries would move up to fill the slot...right? Therefore there is no reasonable prospect of a new customer, if one existed, receiving an early delivery on an A380. The current customers would be in open rebellion if that occurred.

The only bright light in an A380 cancellation would be a conversion to other Airbus types that would not have been ordered otherwise. At least then Airbus gets some income. Any other case represents a net loss to Airbus. There's no getting around that fact.
Failure is not an option; it's an outcome.
 
slz396
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:52 am

Quoting TeamAmerica (Reply 18):
There is no chance that the compensation due to another customer would exceed the revenue to be booked by delivering an A380. None

You are assuming a cancellation translates in a revenue loss for Airbus that year, but given the fact production rate is very limited during the first few years and demand for at least the coming 5 years is much higher, a cancellation actually does not translate into a revenue loss and won't do so till the moment production capacity turns bigger than annual demand.

From this simple accounting perspective Airbus would and apparently is very unwilling to give more than the contractually agreed compensation payments certainly to non-essencial(read smaller) customers, since it would just be throwing money away really: once on the customer they 'bribe' to stay with the A380 and a second time on even more compensation payments to customers which see their delayed delivery NOT advance because if the first customer staying or alternatively loose out on extra revenue from a new sale at non-launch discount prices... all that to book essentially the same revenue as they would have if the first customer would have cancelled? You must be dreaming.... The only 'advantage' there might be from following your path is that some years down the road, the otherwise cancelled order does get delivered and does generate revenue albeit at launch customer tariffs, but if one is as convinced as Airbus this plane will be in high enough demand to keep the lines busy in lets say 5 or 10 years from now, then the idea of it taking the slot of a more lucrative new sale isn't really a very good stimulator either to hand out better than legally required compensation payments....

[Edited 2006-12-06 16:58:53]
 
TeamAmerica
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 1:27 am

Quoting Slz396 (Reply 19):
You are assuming a cancellation translates in a revenue loss for Airbus that year, but given the fact production rate is very limited during the first few years and demand for at least the coming 5 years is much higher, a cancellation actually does not translate into a revenue loss and won't do so till the moment production capacity turns bigger than annual demand.

Nonsense. An A380 cancellation certainly represents more than $100million in lost revenue to Airbus. That is an entirely non-trival sum of money, even if pushed several years into the future. You are correct in saying that the losses will be most acutely felt when the production is ramped up and there are no orders to be filled, but the losses are no less real. A simple thought - if EK cancelled their order would you be making this argument?
Failure is not an option; it's an outcome.
 
jimyvr
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 1:41 am

Quoting Manni (Reply 2):
KE not ordering the 748i when they recently placed a huge widebody order, indicates also that the A380 has a future in KE's fleet.

Get half of the fact straight. KE was close to be the launch team of 747-8I but Boeing simply can't find a common ground when it comes to whether go with the original 747-8I or the minor stretch version, or go both ways.

Quoting Flying-Tiger (Reply 7):
And the A380F is a good parcel freighter.

As long as UPS is willing to wait for it.
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Dougloid
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 5:02 am

Quoting Slz396 (Reply 19):
From this simple accounting perspective Airbus would and apparently is very unwilling to give more than the contractually agreed compensation payments certainly to non-essencial(read smaller) customers, since it would just be throwing money away really: once on the customer they 'bribe' to stay with the A380 and a second time on even more compensation payments to customers which see their delayed delivery NOT advance because if the first customer staying or alternatively loose out on extra revenue from a new sale at non-launch discount prices... all that to book essentially the same revenue as they would have if the first customer would have cancelled? You must be dreaming.... The only 'advantage' there might be from following your path is that some years down the road, the otherwise cancelled order does get delivered and does generate revenue albeit at launch customer tariffs, but if one is as convinced as Airbus this plane will be in high enough demand to keep the lines busy in lets say 5 or 10 years from now, then the idea of it taking the slot of a more lucrative new sale isn't really a very good stimulator either to hand out better than legally required compensation payments....

Let me see if I've got this right.

You're saying that Airbus is paying MORE compensation than is contractually provided for because of program delays? And because of that, Airbus should throw a few smaller operators to the wolves because those slots thus vacated will become that much more valuable a few years down the road when a whole buncha people will be lining up with ready cash?

How do they say "breach of contract-you'll be hearing from my lawyers" in Europe?

Airbus is committed to provide an airplane according to the contract. If it's late they gotta pay. Maybe they don't make any money, but they always have the option of buying the position back for whatever the market will bear.

One thing they do not get to do is call up some airline that's got a few ordered and say "Sorry, old thing. You're not going to get what you ante'd up for after all because you're a bunch of worthless bums and we want your slots."

Not gonna happen.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
zvezda
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 5:56 am

VS are virtually certain to cancel. MH, TG, CZ, UPS, and ILFC are likely to cancel. AF, LH, KE are strong possibilities to cancel. SQ and QF are least likely to cancel.
 
dutchjet
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 6:03 am

Quoting Zvezda (Reply 23):
AF, LH, KE are strong possibilities to cancel.

Thats a pretty controversial statement........sorry, I dont agree. Today, at the news conference concerning LH's order for the 748 (great news!), LH reconfirmed that it remains committed to the A380 program and the 748 was being ordered to bridge the gap between the A346 and A380, so that LH would have modern longhaul airplanes seating about 300, 400 and 500 seats.

While its very possible that the A380 could see cancellations from some of the carriers mentioned, I think that LH, AF and KE will stay with the A380 simply because they need a very high capacity airplane.
 
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RayChuang
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 6:12 am

If Leahy is hoping the customers for the A380-800 will stay, why did Lufthansa just order 20 confirmed plus 20 options on the Boeing 747-8I?  stirthepot 
 
797charter
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 6:34 am

Quoting RayChuang (Reply 25):
If Leahy is hoping the customers for the A380-800 will stay, why did Lufthansa just order 20 confirmed plus 20 options on the Boeing 747-8I?

LH will stay committed to the A380, - without any kind of doubts.

Read the press release from LH - and you have all the reasons you need here:
http://konzern.lufthansa.com/en/html...en/app/show/en/2006/12/636/HOM&s=0
Keep it clear of the propellers
 
manni
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 11:31 am

Quoting Jimyvr (Reply 21):
Quoting Manni (Reply 2):
KE not ordering the 748i when they recently placed a huge widebody order, indicates also that the A380 has a future in KE's fleet.

Get half of the fact straight. KE was close to be the launch team of 747-8I but Boeing simply can't find a common ground when it comes to whether go with the original 747-8I or the minor stretch version, or go both ways.

Was close to be the launch customer, no more than that. No half facts here, you either order or you dont. Was close to be turned out to be not ordering. KE not ordering the 748i in their latest widebody order (deliverys taking place until 2019) doesn't look promising for the 748i in their fleet.

Quoting Zvezda (Reply 23):
VS are virtually certain to cancel. MH, TG, CZ, UPS, and ILFC are likely to cancel. AF, LH, KE are strong possibilities to cancel. SQ and QF are least likely to cancel.

What a jewel!  rotfl  You forgot to make a prediction about EK's, QR's and EY's order.
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ER757
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 11:54 am

Quoting Zvezda (Reply 23):
AF, LH, KE are strong possibilities to cancel.

AF & LH are virtually guaranteed NOT to cancel. Can't speak for KE's chances.

Quoting Slz396 (Reply 9):
Besides, at some point I can think of a scenario where Airbus tells the airline: we're not going to give you that much no matter what you do, because quite frankly if you'd cancel, we'd be recovering some precious delivery slots and thus either save more money by being able to reduce the compensation payment to another customer

 checkmark  This is definitely in Airbus' best interests. Let's look back at the early history of the 747 for some perspective. Lots of airlines bought into the program, paid for and took delivery of the aircraft. After a short period of time in service it turned out to be not economically viable for them (see EA, DL, AA as examples). But Boeing already had their $$ and moved on. I submit that this same scenario could play out with the A380 and it's better for Airbus to have these planes delivered in quantity to carriers before they come to a similar conclusion (ie; Emirates can't fill them all and decides to hold off on part of their order. Better for Airbus that EK already has 30 in their fleet than 15)
 
zvezda
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 11:56 am

Quoting 797charter (Reply 26):
LH will stay committed to the A380, - without any kind of doubts.

If that were true, there would have been no reason for LH to secure purchase rights for an additional 20 B747-8I SuperJumbos. 20 SuperJumbos plus 15 WhaleJets is sufficient to replace 30 Jumbos even with a lot of expansion.
 
osiris30
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:04 pm

Quoting ER757 (Reply 28):
AF & LH are virtually guaranteed NOT to cancel. Can't speak for KE's chances.

AF yes, LH I don't agree... regardless of what was said today. Actions speak louder than words. If LH had all the confidence they say they have in the 380 they would have ordered 777s and converted 380 options.. instead they ordered 346s and bought 20 748Is and optioned 20 more.

To me, as someone not privy to the internal goings-on at LH, that sounds like anything but a vote of confidence.
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
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RayChuang
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:12 pm

Quoting 797charter (Reply 26):
LH will stay committed to the A380, - without any kind of doubts.

I believe that LH will use the A380-800 on its busiest routes. This will probably mean while the MUC-SFO flight will probably stay with the A340-600 the FRA-SFO flight will eventually switch to the A388.
 
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ER757
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:12 pm

Quoting Osiris30 (Reply 30):
If LH had all the confidence they say they have in the 380 they would have ordered 777s and converted 380 options

Now why would they have done that if they needed an aircraft with 400-450 seats? Suggest you read the LH press release - it's pretty clear they are using the 748 to fill the gap between the 346 and the 380. I think it was pretty clear. Don't know why you and Zveda are soo keen on believing it is a prelude to a possible A380 cancellation. Ain't. Gonna. Happen.
 
osiris30
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:25 pm

Quoting ER757 (Reply 32):
Now why would they have done that if they needed an aircraft with 400-450 seats? Suggest you read the LH press release - it's pretty clear they are using the 748 to fill the gap between the 346 and the 380. I think it was pretty clear. Don't know why you and Zveda are soo keen on believing it is a prelude to a possible A380 cancellation. Ain't. Gonna. Happen.

I'm not saying they will cancel. I'm just not saying I have the confidence to say that they will 100% not cancel. I don't view today's move as a vote of confidence for the 380. That's all I said (well that and I don't agree that LH absolutely 100% will not cancel).

A lot of folks around here said 100% LH wouldn't order the 748I.. guess what.. it happened. All I'm cautioning against is assuming that LH could never possibly cancel for whatever reason. AF I agree.. the only way they cancel is if the whole program goes bye bye (and no I'm not saying that's going to happen either, I'm speaking hypothetically here).

I view LH's odds of cancelling higher than they were last week, but that doesn't mean I expect it will happen. (I'm not 100% black and white on such matters.. facts sure.. who will order/un-order what.. that's a whole lotta grey  Smile )
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
zvezda
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:25 pm

Quoting ER757 (Reply 32):
Don't know why you and Zveda are soo keen on believing it is a prelude to a possible A380 cancellation.

As Osiris30 wrote, actions speak louder than words. If Airbus were committed to their WhaleJet order, there is no reason they would have taken the additional 20 purchase rights for the B747-8I SuperJumbo.
 
dutchjet
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:34 pm

Quoting Zvezda (Reply 34):

As Osiris30 wrote, actions speak louder than words. If Airbus were committed to their WhaleJet order, there is no reason they would have taken the additional 20 purchase rights for the B747-8I SuperJumbo.

A possibility: LH moves to an A333/A346/748I/A380 longhaul fleet....eliminating the A343 from the fleet over time? Yes, I realize that this would mean a huge capacity jump, but LH needs to move a lot of pax through its FRA hub to longhaul destinations and in many cases, adding frequency is not an option. LH is betting on demand surging, especially on routes to India, the Gulf, China and other Asia destinations and is thinking big.

In any case, the 20 options were probably part of the launch package and can be considered an insurance policy for LH.
 
11Bravo
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 12:41 pm

Quoting ER757 (Reply 32):
Don't know why you and Zveda are soo keen on believing it is a prelude to a possible A380 cancellation. Ain't. Gonna. Happen.

I don't think it's likely that we'll see a cancellation either.

That being said I think the 20 B748 options are an insurance policy to cover just such an eventuality. It gives LH flexibility in their fleet planning. Should the A380 experience additional delays or performance shortfalls, they have a plan B. Should the A380 program be cancelled altogether, or worse, they have back-up.

Lastly, it sends a clear message to Airbus; stop screwing around with the A380 program, or we will hit the eject button.

The options were taken for a reason; they're not free. It simply isn't plausible that LH intends on having 40 B748 AND 15 A380. That is more than double their current VLA capacity.
WhaleJets Rule!
 
manni
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 1:12 pm

Quoting 11Bravo (Reply 36):
The options were taken for a reason; they're not free.

I'm surprised nobody picked this up yet. But if the price they paid is anything near the Seattle Times reports, I'm surprised it took Boeing that long to find a launch customer.

http://seattletimes.nwsource.com/htm...eblufthansa06.html?syndication=rss

The firm order is worth about $5.5 billion at list prices, although with standard discounts the actual price is closer to $3.2 billion, according to estimates by aircraft valuation firm Avitas.

-------------------------------------------------------------------------

That's US$160 million for a 748, roughly the listprice of a A330, or a discount of more then 40%.
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Siren
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RE: A380, Leahy: "...majority Of Customers Will St

Thu Dec 07, 2006 2:09 pm

Here are my predictions for who will stay and who won't...

78
In the seventh month of the seventh year of the third millennia;
a bus of the sky born of Toulouse and Hamburg;
the flocks will come with gems and gold;
Yet in much fanfare will delay in its coming;

79
Seng of the orient will first ask for returns of their gold;
Having not seen the bus of the air;
Bold, timid, afraid alike follow with tenacity;
Clark of Arabia, Mayrhuber of Germany, and a virgin.

80
Louis of Toulouse will not accede to the virgin's demand;
A new challenger emerges;
Toulouse's reckoning is afoot;
The Great Council will not supply gold for more buses of the sky.

[Edited 2006-12-07 06:10:28]
 
spkyflyer
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 2:37 pm

If I was Leahy today I would be a very nervous man - the 747-8 has gone from concept to reality in a very big way. The markets are going to take this as another clear sign that Airbus are losing their competitiveness and market share very quickly. Forbes just published a "why we are investing in aviation sector for the first time in 30 years" - in the article it says 'boeing's new toy the 787' is causing airbus major headaches. Today's 747-8 event shows the market/investors that there is another target for Boeing that they can attack- to the detriment of airbus and its troubled A380 programme.
 
coa747
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 2:50 pm

Any cancelation of the A380 is bad, because sales have been stagnent for some time and if other carriers see airlines bailing out on the A380 they are more likely to look closer at the 747-8I. For all intents and purposes I think the Kingfisher A380's will never be delivered. I can't see many more airlines that would be interested in the A380. The customer's they have now are about all they will get in my opinion save BA and Cathay and maybe one or two others. That isn't going to get you to 450 frames anytime soon. The 20 frame order from LH certainly didn't help the cause. On another note to proceed with the A380F with only one customer is not the best decision. Dump or delay the freighter version so you can concentrate on the A350. Airbus can't afford to delay work on the A350 any further than they already have.
 
leelaw
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 3:45 pm

Quoting Siren (Reply 38):

 rotfl  Very elegant quatrains, Ma'am. Always nice to have that "female touch" in this decidedly male environment.
Lex Ancilla Justitiae
 
manni
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 6:03 pm

Here's Kingfisher about their A380 order...

http://www.newkerala.com/news4.php?action=fullnews&id=63089
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sparkingwave
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 6:14 pm

The majority of customers will stay, but will non-A380 airlines make new orders for this aircraft or any other new design Airbus aircraft?

IMHO Airbus has a future credibility problem. They can't guarantee on-time delivery of their aircraft. A 2-year time overrun is pretty bad. Could you imagine Boeing, if it had late delays like this? You'd never hear the end of it! But since Airbus is the underdog here, they get extra mercy from airlines (in return for money).

If you were an airline, would you order a future Airbus product, knowing it could be really late? I'd definitely make sure the late penalties would be RE-negotiated in my favor, making the order almost free if it was late by 2 years.
The trouble is, every airline is going to seize the opportunity to do this.

SparkingWave ~~~
Flights to the moon and all major space stations. At Pan Am, the sky is no longer the limit!
 
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glideslope
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 7:32 pm

Quoting Manni (Reply 37):
That's US$160 million for a 748, roughly the listprice of a A330, or a discount of more then 40%.

Nothing unusual for a Launch Customer. LH opened the door. Let's sit back and see who walks in over the next 6m.  checkeredflag 
To know your Enemy, you must become your Enemy.” Sun Tzu
 
PanAmOldDC8
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 8:26 pm

Me thinks Airbus is worried. Reminds me of the launch of the 747, Boeing was really worried the in the first few years after launch as the orders were not there. After the 747 had flown a few years successfully then the orders came. It is a new product and not really tested, so airlines are a little cautious to be the first on board in case of problems, Can't say that I blame them. The problem with the A380 is that it's niche market is very small, due to the number of pax. I for one will not travel on it, as I like to arrive and clear all the formalities quickly and get to where I am going and not stand in line for hours. I remember the first days of the 747 the chaos in the airports caused by the arrival of these airplanes.
Barbados, CWC soon, can't wait
 
columba
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 8:58 pm

Quoting Dutchjet (Reply 35):
A possibility: LH moves to an A333/A346/748I/A380 longhaul fleet....eliminating the A343 from the fleet over time? Yes, I realize that this would mean a huge capacity jump,

Would not be such a capacity jump because the A330-300 seats almost as much as passengers as the A343. The A343 has more range and more payload but many destinatins served with the A343 could be served with the A333. The A330 already has replaced or will replace the A343 on some US east coast destinations.
It will forever be a McDonnell Douglas MD 80 , Boeing MD 80 sounds so wrong
 
PVG
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 9:10 pm

Quoting Zvezda (Reply 29):
If that were true, there would have been no reason for LH to secure purchase rights for an additional 20 B747-8I SuperJumbos. 20 SuperJumbos plus 15 WhaleJets is sufficient to replace 30 Jumbos even with a lot of expansion.

Or, maybe they know something that we don't. Maybe Airbus is starting to understand that they can't build the A380 economically and that they might be better off concentrating their resources elsewhere. LH may have gotten a tip that Airbus is starting to think about dumping the whole thing and took the 747's while they were cheap as a fallback just in case.

I still don't believe that the A380 will ever enter commercial service. It just doesn't make any sense to pour billions into something that has already been superseded performance wise by other products on the first day that it enters service.
 
manni
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 9:33 pm

Quoting PVG (Reply 47):
It just doesn't make any sense to pour billions into something that has already been superseded performance wise by other products on the first day that it enters service.

The A380 will recieve her certification on tuesday. Do you really think it makes sense to cancel the whole project now? The time of pouring billions into the project is slowly coming to the end, next is harvesting billlions from the project.

As far as her performance is concerned, we'll have to wait for the airlines judgement. FWIW, LH believes the A380 will use 3.2 litres of fuel to carry a pasenger 100KM, the 748 (again according to LH) will do the job with about 3.5 litres.
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astuteman
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RE: A380, Leahy: "...majority Of Customers Will Stay"

Thu Dec 07, 2006 11:45 pm

Quoting Zvezda (Reply 23):
VS are virtually certain to cancel. MH, TG, CZ, UPS, and ILFC are likely to cancel. AF, LH, KE are strong possibilities to cancel. SQ and QF are least likely to cancel.

I must say that for a "fan" of the A380, you seem to posess an almost unhealthily morbid fascination with possibilities to cancel A380 orders.
I don't believe there's another person on this forum who predicts A380 cancellations with the regularity and conviction that you do, Zvezda.

The FEDEX cancellation must have been a great relief  Wink.

I'll smile, though - 12 months ago, SQ and QF were the MOST likely to cancel. Funny what a follow-on order can do to a likelihood of cancellation.  Smile

Ah well - the world goes round.........

Regards

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