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A380 Will Crush Rivals: Predicts Expert II

Tue Jan 02, 2007 1:17 am

Continuing from this thread:

A380 Will Crush Rivals, Predicts Expert (by BoomBoom Dec 30 2006 in Civil Aviation)

[Edited 2007-01-01 17:18:49]
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zvezda
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Tue Jan 02, 2007 1:22 am

The only crushing going on is in the net sales during the time both have been available: 747-8 SuperJumbo 74, WhaleJet 7.
 
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Stitch
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Tue Jan 02, 2007 1:23 am

Quoting JakTrax:
Something to bear in mind here: A380 = flying; 748i = drawing board. I don't know for sure but I reckon the 748i is simply Boeing's attempt to get a slice of the limelight which the A380 has already taken.

Sure it is. What's wrong with that? After all, the A380 was Airbus' attempt to get a slice of the limelight which the 747 had already taken.

Quoting JakTrax:
So many here claim that the A380 fills 'a very small niche market'. In which case, everybody's happy with their A380s (which will still be delivered ahead of 748is) and the market for the 748i is now pretty dry. If it's such a small niche then the A380 has surely stolen it?

The crux of the argument is, however, was it worth the time and money Airbus invested to bring the plane to market to address that niche? Airbus has already spent something like $16 billion dollars on the program. The delays will shift over $6 billion in revenues from 2006 to 2010. By Airbus' own statements, something like one-third to one-half of the A388s they have sold will cost Airbus more money to build and deliver then what they will sell them for.

And on top of that, Boeing has just launched a new aircraft program that is a dagger aimed at the heart of one of their widebody programs - the A330 family - as well as having already plunged a dagger (the 777) into the heart of their other program - the A340. So now Airbus needs to spend another 11 figures to respond to those threats. Their own focus on the A388 program has delayed that response for years, and now the A388 revenue deferrals is delaying that even more, as they need to secure billions over the next few years as they wait for the balance of A388 revenues to start arriving in 2010.

On the flip side, Boeing is looking at about $1 billion to bring the 747-8I and 747-8F to market. They already have over 55 orders for both types and while the 748I models probably went out the door around 35-40% off of list, the 748F models probably didn't.

Note - The $4 billion figure bandied about for the 747-8 program has to also include the "sunk costs" Boeing has already spent over the past decade on the 745 and 746 programs, as well as the monies it has spent trying to respond to the A388 with the 747-X and 747-ADV programs.

Quoting JakTrax:
Well that just goes to show that, despite no new airlines jumping on board, existing committed customers still have faith. Some of the world's most consistently profitable carriers, I might add...

Yes, but the three largest operators of the A388 are extremely dependent on the traffic passing through their respective hubs (SIN for SQ, SYD for QF, and DXB for EK) so they truly require the A388 for capacity/traffic reasons.

So, are QF's, SQ's and EK's traffic patterns the rule, or are they an exception to it? If the former, things look bright for the A388 program. If the latter... And note that QF has become the largest operator of the 787 (65 orders plus 50 options) so it looks like they intend to use the A388 on only a few core "trunk routes" to feed SYD and then run 787s everywhere else.
 
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Stitch
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Tue Jan 02, 2007 1:28 am

Quoting Zvezda:
There are 74 signed 747-8 orders.

My mistake. I forgot that Boeing recorded 18 747-8F sales in 2005. I was only looking at the 2006 numbers for the 747 family (67) and deducting the 12 744F/744ERFs sold in 2006.

Quoting Zvezda:
The cost of the 747-8 program is between $1B and $2B.

Still a good deal less then the A380-800 program and with $12 billion or more in orders, looking to be a given for positive program ROI.
 
zvezda
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Tue Jan 02, 2007 1:36 am

Quoting Stitch (Reply 3):
Still a good deal less then the A380-800 program and with $12 billion or more in orders, looking to be a given for positive program ROI.

Yes, in part because of the future value of money, the 747-8 SuperJumbo program probably already has enough orders to achieve the 19% RoI for which the WhaleJet needs at least 1000 orders.
 
ikramerica
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Tue Jan 02, 2007 1:50 am

Quoting NAV20:
Agreed, comes back to semantics, Baroque. Somehow feel that if the return in 2010 was expected to be 'substantial,' the Airbus people would have said so - instead of only using that word in relation to income 'beyond 2010'.........

While i don't agree with all your numbers, you are dead on on this part.

Some still want to believe that if Airbus says "in 2010" they mean January. History has NOT demonstrated this from Airbus or most other companies. If they meant Q1 2010, they'd have said Q1 2010. But they said they will begin to show profit in 2010, and that means, in corporate talk, by the end of year.

That means that up until the end of 2010 (which month? not clear, but likely Q4), each A380 delivered will put the program further into debt. From that point on, each delivery will eat away at the debt, up until about 420 frames, where the entire program will go into the black, should they reach that point without further investment...
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ikramerica
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Tue Jan 02, 2007 1:54 am

Quoting Zvezda (Reply 4):
Yes, in part because of the future value of money, the 747-8 SuperJumbo program probably already has enough orders to achieve the 19% RoI for which the WhaleJet needs at least 1000 orders.

If you believe Airbus's numbers, it's more like 900.
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zvezda
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Tue Jan 02, 2007 2:02 am

Quoting Ikramerica (Reply 6):
If you believe Airbus's numbers, it's more like 900.

I think the Airbus numbers are optimistic with regard to both the exchange rate and the future sales prices. Whether the number is 900 or 1000, anything less would mean it was a mistake to launch the program.
 
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Tue Jan 02, 2007 2:08 am

Quoting Zvezda (Reply 8):
Whether the number is 900 or 1000, anything less would mean it was a mistake to launch the program.

I'm just using the very simplistic way Airbus reached 750. 750-420=330. (330/13)x19=900 frames. That's the overly simple Airbus used to reach 750, which is why I said "if you believe" their numbers. Frankly, I don't.

From a purely financial POV, yes, and that's what people don't get. Airbus, at this point, can sell 500, which would be an amazing number for such a large plane, and yet it wouldn't have made financial sense. It depends on what "crush" means. If Airbus sells 500 A380s and Boeing sells 150 748i, that is a crushing, yet Boeing comes out ahead! And it's already clear Airbus has a very, very long road ahead to pick up any F orders whatsoever...
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Tue Jan 02, 2007 2:21 am

There is another factor in this debate that has not received enough attention. My understanding is that the A380 will not fit in most existing gates at most airports, while the 748 will. If the A380 was catching on like the 747 did originally the airports would be rushing to accommodate it. Since response to the A380 has been tepid at best I do not believe many airports will invest the money necessary to accommodate it, which will limit it to relatively few routes, which will in turn diminish its appeal even further. There is a sort of critical mass involved in the introduction of anything that exceeds previously accepted limits, and from what I can see the A380 has not acheived that. But it is not guaranteed that it won't; the 747 after an initial flurry of orders languished in the early 70's, but then took off and has been impressively successful. The A380 may do the same but my guess is that it will not, because if it doesn't happen now it will be rendered obsolete by the next generation of composite planes that will be more economical even if not as large. It is unfortunate for Airbus that it built this bird at the tail end of the aluminum plane's life cycle; after all, making money is the object of any business and if they can do it better with a smaller plane then they will.
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BoomBoom
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Tue Jan 02, 2007 2:25 am

Quote:
Quoting Zvezda (Reply 158):
Sales have been rather dismal.



Quote:
Quoting Manni (Reply 163)
Given the 'blackday' predictions from many resident 'experts' on here, people with 'sources', people working for A380 customer airlines etc., a net gain of 7 orders, despite all the negativity reported regarding the A38O program, for 2006 could be considered a better than expected result for those people. Not?

Not. A net gain of seven is dismal.

I guess anything could be considered "a better than expected result"
if you set the bar low enough.
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dazeflight
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A380 Will Crush Rivals: Predicts Expert II

Tue Jan 02, 2007 2:30 am

Quoting Zvezda (Reply 1):
The only crushing going on is in the net sales during the time both have been available: 747-8 SuperJumbo 74, WhaleJet 7.

Being the first one to answer in this thread and repeating your message from thread 1 again only shows that you really have a sick & obsessive relationship to the whalejet.

So I'm going to repeat my message, too: The net sales during the time both have been available in the passenger segement, the only segement where both kind of compete with each other, is 20 for the 747-8 vs. 17 for the A380. Until 1 month ago it was 0 vs. 17. That only shows the value of your repeated figures atm: nihil, nothing, zero.
 
ikramerica
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Tue Jan 02, 2007 2:31 am

Quoting SEPilot (Reply 11):
My understanding is that the A380 will not fit in most existing gates at most airports, while the 748 will.

The 748i doesn't quite fit. It will require airports to redraw (overlay) some gates with a special red or yellow outline for the wider 748i, and then the gate next to it with a special line for 777/787 and smaller. But in a 2 gate space, the 748+777 fit without infringing on the other gates. The jetways need to have about 10 feet of movement to accommodate the shift, but most around the world do.

In contrast, the A380 can also fit in a 747 gate, but to do so, it MUST restrict both gates next to it to 767 or smaller. This is why airports had to build A380 ready gates. They had to redraw the lines completely, or spread out the gates, or put them on the corners of the piers with longer jetways to push them out. Also, the A380 requires a larger lounge area.
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leelaw
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Tue Jan 02, 2007 2:40 am

IIRC, according to the revised breakeven analysis issued by EADS in October which increased "breakeven outlook" to 420 units from 270, also reported that:


Quote:
With starting reference 2007 notional A380 breakeven is 150 a/c

http://www.eads.com/xml/content/OF00000000400004/0/74/41485740.pdf

Doesn't this mean that Airbus expects to be even on production costs only after 150 deliveries?
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T773ER
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Tue Jan 02, 2007 2:44 am

Quoting RJ111 (Reply 16):
As for the articlue, clearly just some hyperbole. No need to take it so seriously, i'm suprised it managed to notch up two threads.

The first thing I thought of when I read it was that it was fabricated by Airbus.
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Tue Jan 02, 2007 2:50 am

Quoting Stitch (Reply 2):
QF has become the largest operator of the 787 (65 orders plus 50 options) so it looks like they intend to use the A388 on only a few core "trunk routes" to feed SYD and then run 787s everywhere else.

It is still possible that not a single 787 will end up in QF colors.

This has been used as a big stick in industrial negotiations for some time. JQ not QF will be the initial operator, with the JQ 330s going back to QF when the 787s arrive.

QF buys aircraft for the QF group, not just to fly in QF colors. The latest pilot agreement for JQ was to include the 380 as well.
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ikramerica
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Tue Jan 02, 2007 2:53 am

Quoting Leelaw (Reply 18):
Doesn't this mean that Airbus expects to be even on production costs only after 150 deliveries?

Yes. Through about the 1st 75, Airbus is going deeper into debt with each delivery, as with penalties and cost overruns, it's costing them more to make them then they get from delivering them. From 75-150, they are getting back to the point where they are pulling themselves out of that extra debt. 150-420 are the deliveries where they will be recouping the investment costs. 420-750 are the units where Airbus says there is a positive ROI, with 750 reaching 13%. 900 would be the point they would reach their original projected 19% ROI. This assumes they can sell 750 388 and 380F without making any changes that cost any more money.
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Stitch
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Tue Jan 02, 2007 2:54 am

Quoting SEPilot (Reply 11):
My understanding is that the A380 will not fit in most existing gates at most airports, while the 748 will.

As Ikramerica noted in Reply 15, the 748I better fits into existing gates then an A388 does, but both require some re-work. Where the 748I has an advantage is it is easier to board and disembark with two jetways on the main deck then the A388 would be (I am assuming current dual-jetways will work on an A388).

Quoting Dazeflight (Reply 14):
So I'm going to repeat my message, too: The net sales during the time both have been available in the passenger segment, the only segment where both kind of compete with each other, is 20 for the 747-8 vs. 17 for the A380. Until 1 month ago it was 0 vs. 17.

The 748I recorded four sales in 2006 prior to LH's order, which makes the actual total 24 to 17 for the year and 4 to 17 for the year prior to December.

Also, the 744 "competed" with the A388 and it recorded 28 sales, so just to complete the statistics, the program-to-date orders are 156 for the A380 family and 52 for the 747 family.
 
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Tue Jan 02, 2007 10:21 am

I have my doubts about how expert this theory really is. I will give that the A380 is certainly a formidable opponent on the routes it is intended for...but it can only crush its rivals to a point...if indeed it can crush them at all. IT is limited on the routes it can serve and therefore is not going to have the big impact the 747 had when it was introduced. Also...as someone pointed out earlier, many airports seem reluctant to expand their gates to accomodate the A380. I see a more Boeing dominated future around the world than an Airbus dominated one. THe 787 is the aircraft that is going to have the biggest impact on the world. The A380's reign as the new dominant jumbo is already beginning to give way...Boeing is clearly taking some of the wheel here and I expect this to continue.
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Tue Jan 02, 2007 10:39 am

The original thread included the word "expert". This one refers to "experts". Malcolm English edits a magazine that is in its own way admirable but I'd hardly call him an "expert". He's an aviation enthusiast much like those of us who post on A.Net. So from one "expert" (who isn't) we've gone to "experts". This kind of carelessness merely serves to confuse and provoke mischievous threads like this one.
 
BandA
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Tue Jan 02, 2007 11:17 am

It IS more likely for A380 to crush its rival 747 than the 747 crushing an A380.

If you look at the 380 it is a lot larger and most likely heavier, so if they place the new A380 on top of the old, rusty and brittle 747 it might just crush it... how badly? not sure... cant wait to see it happen though.
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TPASXM787
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Tue Jan 02, 2007 11:31 am

Quoting BandA (Reply 20):
It IS more likely for A380 to crush its rival 747 than the 747 crushing an A380.

If you look at the 380 it is a lot larger and most likely heavier, so if they place the new A380 on top of the old, rusty and brittle 747 it might just crush it... how badly? not sure... cant wait to see it happen though.

thanks, you really added a lot here.

i haven't touched this thread with a 10 foot pole, but to say the A380 will crush its rival(s) really isn't saying a lot when it's rival is one plane? That one plane based on a 40 yeard old design outsold the A380 in 2006...overall the A380 obviously has more orders than the 748 but damn...I would have thought the 380 would have pulled more orders since the initial run.
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JayinKitsap
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Tue Jan 02, 2007 11:37 am

Airbus needs to have a crushing 380 sales and production team. Yes production of the first 40 will take the next 3 years, but by then the rate will be 40 per year (Airbus indicates 48). So by the time the line is running at 40 per year, the 380 needs to get 40 orders per year for the next 10 to 20 years. In the last 2 years there hasn't been a net 40 orders.

With luck in the next 1 to 2 years most of the 380 options could be exercised, I recall that is about 80 planes. Then new sales need to commence.

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fridgmus
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Tue Jan 02, 2007 12:06 pm

Do any of you think that the A380 and the B748 can co-exist in different markets/niches that overlap each other? (I hope that makes sense!).

Thanks,

Marc
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Tue Jan 02, 2007 12:14 pm

I'm really not sure how relevant it is but a brief look at the sales history of the 747 may be informative.

It was launched in 1966 with 83 orders from 11 airlines.
In 1967 it gained 43 more orders including 9 new customers.
In 1968 the number was down to 22 and 5 new customers.
In 1969 it was 30 with just one new customer.
In 1970 - 20 orders and 3 new customers.
In 1971 - 7 orders and no new customers.
In 1972 - 18 orders and 4 new customers.
In 1973 - 29 orders and 2 new customers.
In 1974 - 29 orders and 2 new customers.
In 1975 - 20 orders and 2 new customers.

So, in ten years Boeing sold 301 747s to 39 customers. That's effectively 30 a year and an average of 8 planes per airline.

Its two best years for sales were the first two (42% of the 10-year total) and it added half of its airline customers during these two years. From 1969 to 1975 Boeing added just two new customers a year for seven years.

Sales were poorest just as it was coming into service (also, a little late).

What does this tell us about the A380? Probably not much. Sales were bound to be lower in the 1960s and 70s than today. On the other hand, the 747 really had no serious competition. Still, it is interesting to see the early progress of the 747 being steady rather than spectacular. Indeed, the real success story for the 747 was the -400 (in its various incarnations) which didn't go on sale till almost twenty years later. Boeing sold 698 of these from October 1985 to July this year.

Does that suggest that later, improved versions of the A380 will sell better? And that Airbus will make its money on a version launched in 2020?! Oops!
 
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Tue Jan 02, 2007 12:15 pm

Quoting Fridgmus (Reply 23):
Do any of you think that the A380 and the B748 can co-exist in different markets/niches that overlap each other?

Apparently Lufthansa think so.
 
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Tue Jan 02, 2007 12:16 pm

Quoting JayinKitsap (Reply 22):
Airbus needs to have a crushing 380 sales and production team. Yes production of the first 40 will take the next 3 years, but by then the rate will be 40 per year (Airbus indicates 48). So by the time the line is running at 40 per year, the 380 needs to get 40 orders per year for the next 10 to 20 years. In the last 2 years there hasn't been a net 40 orders.

Airbus needs to get the wiring untangled, get their production certificate, and get some A380's in revenue service. Once that happens, additional orders will follow.
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atmx2000
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Tue Jan 02, 2007 12:46 pm

Quoting PM (Reply 24):
Does that suggest that later, improved versions of the A380 will sell better? And that Airbus will make its money on a version launched in 2020?! Oops!

I suspect that they will need to launch an update to get the program to profitability. I expect sales to weaken at 10-12 yrs past original EIS. At the projected delivery rates, they can only hope to break even right about the time if they sell everything.
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grantcv
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Tue Jan 02, 2007 2:12 pm

Quoting Ikramerica (Reply 16):
Yes. Through about the 1st 75, Airbus is going deeper into debt with each delivery, as with penalties and cost overruns, it's costing them more to make them then they get from delivering them. From 75-150, they are getting back to the point where they are pulling themselves out of that extra debt. 150-420 are the deliveries where they will be recouping the investment costs. 420-750 are the units where Airbus says there is a positive ROI, with 750 reaching 13%. 900 would be the point they would reach their original projected 19% ROI. This assumes they can sell 750 388 and 380F without making any changes that cost any more money.

So in order to make these numbers, Airbus would have to sell 900 of the current A388/A388F variants. (Additional investments on new variants aren't factored into Airbus' numbers.) What other single variant has ever done this well? B722, B732, B733, B73G, B738, B752, and the A320. So in essence, at some point the A380 will have to start selling like B737s or A320s in order to make the numbers. Yeah, right!
 
leelaw
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Tue Jan 02, 2007 2:45 pm

Quoting JayinKitsap (Reply 22):
With luck in the next 1 to 2 years most of the 380 options could be exercised, I recall that is about 80 planes.

IIRC, after SQ and QF formally exercised some of their options in late-2006, and FX having cancelled its firm order and options altogether, outstanding options for the A380 stand at 53 aircraft on December 31, 2006.
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WingedMigrator
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Tue Jan 02, 2007 2:49 pm

Quoting Grantcv (Reply 28):
So in essence, at some point the A380 will have to start selling like B737s or A320s in order to make the numbers.

Not really. The hypothetical accounting scenario assumes a single variant, but obviously the A380-800 will be improved upon during its lifetime, perhaps even with derivative models, much like any other airliner family before it. For a small additional investment (relative to the original development cost) a baseline airplane can be improved considerably. The most obvious development that can be expected in the A380's future is the new generation of engines being developed for the A350.

All the talk about return on investment is a red herring, in my opinion. The ROI debate would be relevant if the A380 launch decision were still to be taken. The only reasonable financial yardstick, given that the development costs are now sunk and the airplane is in production, is cash flow. While cash flow will be negative through 2010 due to the production snafu, all indications are that it will be rather positive thereafter. While the ROI indeed looks terrible, and the launch of the A380 program may turn out to have been a colossal mistake, any investor would tell you that it's useless to cry over spilled milk.

The only financially relevant question is where to go from here and now, a question which has much less bearing on the A380 program than on the A350 program. As it stands, I agree that there shall be no 'crushing' on the part of the A380.
 
GBan
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Tue Jan 02, 2007 3:12 pm

Quoting Fridgmus (Reply 23):
Do any of you think that the A380 and the B748 can co-exist in different markets/niches that overlap each other? (I hope that makes sense!).

Thanks,

Marc

Oh, come on. This is certainly not possibe on A.Net.

The fact that Airbus and Boeing share your view in both their market forecasts definitely does not count.

Quoting PM (Reply 25):
Apparently Lufthansa think so.

They can't be experts.
 
ikramerica
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Tue Jan 02, 2007 3:16 pm

Quoting Fridgmus (Reply 23):
Do any of you think that the A380 and the B748 can co-exist in different markets/niches that overlap each other? (I hope that makes sense!).

Absolutely, but neither will sell more than 500 F+pax, in my estimation. The 748 will sell 4 to 1 freighters, and the 380 will sell mostly pax versions.

Quoting Grantcv (Reply 28):
What other single variant has ever done this well? B722, B732, B733, B73G, B738, B752, and the A320.

Basically, the 747Classic sold 700, the 747-400 series sold 700, the 767 sold 950, the 777 has sold nearly 900.

And that's important. The 777, despite it being an obvious success, a smaller plane, and less risky, has only sold 900 in the 15 years it's been for sale, and that includes an expensive revision in the 777LR. Airbus needs the A380 to sell 900 in 20 years of sale, without a revision.

Quoting WingedMigrator (Reply 30):
For a small additional investment (relative to the original development cost) a baseline airplane can be improved considerably.

Nope, a revision will not be a small investment. It'll likely cost $1 billion or more, and there will be launch discounts for any revision. If it takes 900 frames to earn 19% on $16 billion, it means they'll have to sell at least 50 more, or 950, to make 19% on one cheap revision. For each $1 billion dollar model, add 50 frames (simple math, so take with a grain of salt). But to even hope to reach that high number, the A380 will need to go through 1 stretch and 1 revision, so Zvezda's number of 1000 seems about right.

Again, this is to make 19%. To make 13% it would be more like 825.

But I agree, at this point, the program is already launched, the planes are flying, and the idea of whether it is worth it to launch is kind of pointless. What is done is done, and let's just hope the A380 sells as many frames as possible, because I want to fly in one ASAP, and living in the USA, the more carriers who have one, the greater chance I'll get to spot one let alone fly on one.
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zvezda
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Tue Jan 02, 2007 3:43 pm

Quoting PM (Reply 24):
Indeed, the real success story for the 747 was the -400 (in its various incarnations) which didn't go on sale till almost twenty years later.

Yes, though the 747-400 still had the advantage of better range than anything else flying, which was the main reason most customers bought it. The WhaleJet never had and never will have this advantage. Without it, the 747 would have had only a fraction of the sales it did. The sales number would probably have looked worse than those of the WhaleJet and there might never have been a 747-200. We'll never know.

Quoting PM (Reply 25):
Apparently Lufthansa think so.

Perhaps, but it should be noted that 1) LH got a better than expected price on their WhaleJets due to the change of the dollar/euro exchange rate making cancellation less attractive than it otherwise would have been and 2) the 747-8 was not available when LH ordered their WhaleJets. Actually, there have been no new WhaleJet customers (freighter or passenger) since the 747-8 became available for order more than a year ago. If an airline were to order both after both were available, that would indicate they think there is a niche for both of them. The LH case is not quite so clear.
 
GBan
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Tue Jan 02, 2007 5:53 pm

Quoting Zvezda (Reply 33):
Perhaps, but it should be noted that 1) LH got a better than expected price on their WhaleJets due to the change of the dollar/euro exchange rate making cancellation less attractive than it otherwise would have been and 2) the 747-8 was not available when LH ordered their WhaleJets. Actually, there have been no new WhaleJet customers (freighter or passenger) since the 747-8 became available for order more than a year ago. If an airline were to order both after both were available, that would indicate they think there is a niche for both of them. The LH case is not quite so clear.

Actually if you take the time to have a look at Lufthansa's press release you'll see that the LH case is quite clear:

http://konzern.lufthansa.com/en/html...en/app/show/en/2006/12/636/HOM&s=0

Quotes:

“With aircraft types in the B747 series from Boeing, on the one hand, and others from the A330/A340/A380 family from Airbus, on the other, Lufthansa is ideally equipped to strengthen and expand its leading position in intercontinental traffic,“ said Wolfgang Mayrhuber...

... “The B747-8 underlines our strategy of graded market-specific services and capacity expansion. It fits perfectly in our intercontinental fleet structure and slots neatly capacity-wise between the A380 with around 550 seats and the A340-600 with around 300 seats.“


Might be interesting as well: LH expects 3.5 litres per passenger and 100 kilometres for the 747-8 in LH configuration (see press release) and expects 3.3 litres per passenger and 100 km for the A380 in LH configuration (http://a380.lufthansa.com/en/html/ueberblick/index.php). Economical advantage per passenger is 6% in favour of the A380.
 
zvezda
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Tue Jan 02, 2007 6:21 pm

Quoting GBan (Reply 34):
Actually if you take the time to have a look at Lufthansa's press release you'll see that the LH case is quite clear:

Not at all. Why do people put so much faith in marketing spin? LH aren't going to write: "We're buying a different VLA this time because we can't make up our minds." or "We're buying a different VLA this time because we screwed up last time." Of course, they would write a justification for ordering both. That in no way evidences that they would have ordered both had both been available at the time.
 
planemaker
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Tue Jan 02, 2007 7:33 pm

Quoting Zvezda (Reply 33):
The sales number would probably have looked worse than those of the WhaleJet and there might never have been a 747-200. We'll never know.

And let us not forget that the 747 had competition from the "right sized" DC-10 & L1011 (around 600 frames delivered).

However, if your assumption about consolidation comes true (from the VLJ thread... and I agree), then we could possibly see a larger market for all VLAs starting in ~10 years.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
zvezda
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Tue Jan 02, 2007 7:50 pm

Quoting Planemaker (Reply 36):
if your assumption about consolidation comes true

I was not assuming consolidation.

Quoting Planemaker (Reply 36):
then we could possibly see a larger market for all VLAs starting in ~10 years.

In ~10 years no one will be ordering new-build aluminium airliners. They won't be even remotely competitive with CFRP airliners.
 
Adria
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Tue Jan 02, 2007 7:54 pm

Quoting Zvezda (Reply 33):
Yes, though the 747-400 still had the advantage of better range than anything else flying, which was the main reason most customers bought it. The WhaleJet never had and never will have this advantage. Without it, the 747 would have had only a fraction of the sales it did. The sales number would probably have looked worse than those of the WhaleJet and there might never have been a 747-200. We'll never know.

The A340 and MD-11 were already on the market (not in service but airlines knew what MD and Airbus are planning) so this "range advantage" is not the main reason...it is very simple and easy to think like that but it does not make any sense in reality...

Quoting Zvezda (Reply 7):
I think the Airbus numbers are optimistic with regard to both the exchange rate and the future sales prices. Whether the number is 900 or 1000, anything less would mean it was a mistake to launch the program.

since you don't have any reliable data (but then again you already "know" the CASM for the entire A350 and 787 (-10 and -11) families) this is speculation...

Quoting Stitch (Reply 2):
Note - The $4 billion figure bandied about for the 747-8 program has to also include the "sunk costs" Boeing has already spent over the past decade on the 745 and 746 programs, as well as the monies it has spent trying to respond to the A388 with the 747-X and 747-ADV programs.

It will be interesting to see how many 747s are going to be ordered after the A380 finally starts it's service. Only then it will be clear if the 747-8 is a strong competitor against the A380

Quoting Stitch (Reply 2):
On the flip side, Boeing is looking at about $1 billion to bring the 747-8I and 747-8F to market. They already have over 55 orders for both types and while the 748I models probably went out the door around 35-40% off of list, the 748F models probably didn't.

Well I still think that because of high freighter aircraft prices and because there are a lot of 744s that are soon going to be phased out from pax service, there is a significant amount of pressure on the 747-8F...

Quoting Stitch (Reply 2):
By Airbus' own statements, something like one-third to one-half of the A388s they have sold will cost Airbus more money to build and deliver then what they will sell them for.

Possibly true but because of the A380 Airbus booked some orders for other Airbus aircraft (an advantage Boeing had for decades with the 747). So despite A380 Airbus did manage to get something good of the crisis.
 
zvezda
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Tue Jan 02, 2007 8:04 pm

Quoting Adria (Reply 38):
The A340 and MD-11 were already on the market (not in service but airlines knew what MD and Airbus are planning) so this "range advantage" is not the main reason...it is very simple and easy to think like that but it does not make any sense in reality...

Are you claiming that the A340-200/300 and the MD-11 match the range of the 747-400?

Quoting Adria (Reply 38):
since you don't have any reliable data (but then again you already "know" the CASM for the entire A350 and 787 (-10 and -11) families) this is speculation...

 Yeah sure

Quoting Adria (Reply 38):
It will be interesting to see how many 747s are going to be ordered after the A380 finally starts it's service. Only then it will be clear if the 747-8 is a strong competitor against the A380

During the time both have been on sale (slightly more than a year), net sales are 74 to 7. You're free to doubt whether the one that sold 74 is a strong competitor to the one that sold 7, just as you're free believe the moon is made of cheese.

Quoting Adria (Reply 38):
Possibly true but because of the A380 Airbus booked some orders for other Airbus aircraft (an advantage Boeing had for decades with the 747). So despite A380 Airbus did manage to get something good of the crisis.

Pure speculation.
 
planemaker
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Tue Jan 02, 2007 8:04 pm

Quoting Zvezda (Reply 37):
In ~10 years no one will be ordering new-build aluminium airliners. They won't be even remotely competitive with CFRP airliners.

Ah... but until CFRP VLA's EIS they will be competitive. And the Whale and the Jumbo will still be available in ~10 years.  Smile
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
zvezda
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Tue Jan 02, 2007 8:15 pm

Quoting Planemaker (Reply 40):
Ah... but until CFRP VLA's EIS they will be competitive.

I disagree. I don't think either aluminium VLA will be competitive with the A350-1000 or 787-11. If I turn out to be wrong on that point, orders for aluminium VLAs will dry up upon the launch, not the EIS, of the first CFRP VLA.
 
astuteman
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Tue Jan 02, 2007 8:18 pm

Quoting WingedMigrator (Reply 30):
there shall be no 'crushing' on the part of the A380.

 checkmark 

Quoting WingedMigrator (Reply 30):
The only financially relevant question is where to go from here and now

 checkmark 

As always WM, you write everything that needs to be said in a 200+ post thread in two small sentences. It's a privilege to have you on my RU list  thumbsup 

Quoting GBan (Reply 34):
Might be interesting as well: LH expects 3.5 litres per passenger and 100 kilometres for the 747-8 in LH configuration (see press release) and expects 3.3 litres per passenger and 100 km for the A380 in LH configuration (http://a380.lufthansa.com/en/html/ueberblick/index.php). Economical advantage per passenger is 6% in favour of the A380.



Quoting Zvezda (Reply 35):
Not at all. Why do people put so much faith in marketing spin? LH aren't going to write: "We're buying a different VLA this time because we can't make up our minds." or "We're buying a different VLA this time because we screwed up last time." Of course, they would write a justification for ordering both

Do you consider that they wrote this as part of a "justification" for ordering both?...............

Regards
 
planemaker
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Tue Jan 02, 2007 8:25 pm

Quoting Zvezda (Reply 41):
I don't think either aluminium VLA will be competitive with the A350-1000 or 787-11. If I turn out to be wrong on that point, orders for aluminium VLAs will dry up upon the launch, not the EIS, of the first CFRP VLA.

Re. the A350-1000 or 787-11... even with superior CASM they will not meet the capacity requirements of markets that will require VLAs.

Re. CFRP VLA's, they won't be around for a long time. Perhaps the best one can expect in the interim is an increase in CFRP use on the exisiting designs with improved engines.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
zvezda
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Tue Jan 02, 2007 8:27 pm

Quoting Astuteman (Reply 42):
Do you consider that they wrote this as part of a "justification" for ordering both?...............

Applying Occam's Razor, yes, that is the obvious reason.
 
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Stitch
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Tue Jan 02, 2007 9:30 pm

Quoting Adria (Reply 38):
It will be interesting to see how many 747s are going to be ordered after the A380 finally starts it's service. Only then it will be clear if the 747-8 is a strong competitor against the A380

Yup. The next five to ten years will probably be the most critical for each plane to garner as many orders as it can as the "wonder twins" - the 787 and A350X - prepare to enter service.

Quoting Adria (Reply 38):
Well I still think that because of high freighter aircraft prices and because there are a lot of 744s that are soon going to be phased out from pax service, there is a significant amount of pressure on the 747-8F...

It will probably come down to how efficient a 744BCF will be over 10-20 years vs. how efficient a 748F will be over 20-30 years. For airlines with cargo arms that operate the 744, chances are conversion to a 744BCF will be fine for them. But for the dedicated cargo companies, the 748F might still prove to be the better option.

Quoting Adria (Reply 38):
Possibly true but because of the A380 Airbus booked some orders for other Airbus aircraft (an advantage Boeing had for decades with the 747). So despite A380 Airbus did manage to get something good of the crisis.

True. While I believe a number of the recent A330 orders to airlines like SQ, QF and LH were discounted beyond the usual ~30% because of the A380 penalties being factored into the deals, none of those carriers would take planes they didn't need or felt could not be operated at a profit. So Airbus was able to save themselves hundreds of millions in cash penalty payments while adding a few billion to their order book.
 
zvezda
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Tue Jan 02, 2007 9:45 pm

Quoting Planemaker (Reply 43):
the A350-1000 or 787-11... even with superior CASM they will not meet the capacity requirements of markets that will require VLAs.

Those already sold would saturate that tiny niche.
 
leelaw
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Tue Jan 02, 2007 9:54 pm

Quoting Stitch (Reply 45):
While I believe a number of the recent A330 orders to airlines like SQ,

SQ are not purchasing the A330s, they're leasing them directly from Airbus on what appear to be extraordinary terms indeed, at least vis-a-vis the duration of the leases.
Lex Ancilla Justitiae
 
planemaker
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Tue Jan 02, 2007 9:59 pm

Quoting Zvezda (Reply 46):
Those already sold would saturate that tiny niche.

However, not if there is the consolidation that we agree could happen. In that case, the 650 deliveries that Boeing forecasts through 2025 could quite easily increase.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
zvezda
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Tue Jan 02, 2007 10:04 pm

Quoting Planemaker (Reply 48):
However, not if there is the consolidation that we agree could happen.

What agreement? I don't see any trend toward a reduction in the number of carriers.