leelaw
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Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 4:51 pm

Here's an interesting item which appeared in the Flight International Blog this week with the headline:

"We'll soon see if some of Randy Baseler's A380 thinking was right"

http://www.bizbuzzmedia.com/blogs/fl...ional/archive/2007/01/03/6185.aspx
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Toulouse
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 4:58 pm

Quoting Leelaw (Thread starter):

Interesting read, thanks. I found the very last comment to be interesting:
We should know for sure later this year, but I think Randy will lose that battle (and, in fact, he may well be fighting a related one for the 787 by then.)

Basically the biggest doubt is the number of airframes Airbus will manage to sell, yet the article does state that things has recently removed with the two recent follow-on orders and rumours of more similar orders. Apart from that, the article appears to diplomatically refute most of what Randy said about the 380 three years ago, yet also admits a lot of mystery around the 380 from Airbus. So in summary, the article is simply reviewing Randy's past statements, and then states the obvious which is that later this year (fingers crossed for no more delays), the 380 will take to the skies and we'll start to find out the reality of this aircraft.
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keesje
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 6:09 pm

Quoting Leelaw (Thread starter):
Was Some Of Randy Baseler's A380 Thinking Right?

The journalist' opinion (last part of the article):

Quoting ,reply=0:
We should know for sure later this year, but I think Randy will lose that battle (and, in fact, he may well be fighting a related one for the 787 by then.)

I think if we look through Randy's archive we find some fine predictions on the 747-adv, Sonic Cruiser and if we are talking year 2000, a lot more (Although he didn't have a blog then..)

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SEPilot
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 9:07 pm

I think anything that Randy Baseler or John Leahy says about the other side should be taken with a barrel of salt-they both perceive that part of their job description is to knock the competition. My observation is that historically Boeing has a very good track record of meeting its promises as to performance and delivery while Airbus has a good track record of meeting performance promises. Boeing is certainly aware of the repercussions that can ensue from not meeting expectations, and Airbus should be. Just hope that Airbus does not let any of the politicians get involved in performance specs-they'll be promising airplanes that don't need fuel, or something like that.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
2wingtips
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 9:16 pm

The article is quite true IMO. Airbus desperately needs new A380 customers this year, not just the follow-on orders from existing customers. It's a small customer base that has to grow and they will have to it with pax sales alone, as the 380F is practically dead.
How on earth will Airbus get to break-even on the 380 with the existing customer base, let alone reach the Airbus 750 predicted orders? It will be the biggest niche carrier of them all IMO.
 
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zeke
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RE: Was Some Of Randy Baseler's A380 Thinking Righ

Thu Jan 04, 2007 9:37 pm

FI article seem to have the finger on the pulse with the numbers, as far as I know their target OEW is about 270t (about 595klb), the first 54 frames will be within 2% of that, after MSN 54 it will be within 1%, and reducing further down the track.

Note that this matches with the 5t number EK has mentioned previously.

A380 fuel flows are slightly lower than predicted, range/payload slightly better than predicted, so everyone seems to be happy with the weight progress at the moment.
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zvezda
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 9:58 pm

I find it particularly interesting that FI write that the spec OEW is 596,000 lbs but Airbus admit that actual OEW will typically be about 619,000 lbs. Two years ago, when I suggested that actual OEW, as configured by the airlines, would be about 20,000 lbs over spec, I was excoriated here. Turns out I underestimated the weight problem.
 
leelaw
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Thu Jan 04, 2007 11:10 pm

Quoting 2wingtips (Reply 4):
The article is quite true IMO. Airbus desperately needs new A380 customers this year, not just the follow-on orders from existing customers. It's a small customer base that has to grow and they will have to it with pax sales alone, as the 380F is practically dead. How on earth will Airbus get to break-even on the 380 with the existing customer base, let alone reach the Airbus 750 predicted orders?

I'm surprised Mr. Daly of FI neglected to point-out in his blog entry that it currently looks as though Mr. Leahy has failed in 2006 to achieve his often repeated goal (since 2002) of "growing the the A380 orderbook by one customer a year through to the first delivery."

http://www.flightglobal.com/Articles...22/After+the+show+-+Forecasts.html
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TeamAmerica
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 12:51 am

The only post-delay follow-ons have been from SQ and QF, and apparently tied to discounts received as compensation. Airbus needs to sell some A380's on the merits alone, without added incentives.
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airfrnt
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 12:58 am

One more point that needs to be made is that Airbus has essentially written off all of the existing orders to this point, because of the cost overages of the production problems, and the damage clauses in the contracts.

Airbus basically is starting from scratch, so instead of having to have each carrier double the number of established orders, they have to triple it (or be in that ball park) just to break even.
 
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zeke
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 2:56 am

Quoting Zvezda (Reply 6):
I find it particularly interesting that FI write that the spec OEW is 596,000 lbs but Airbus admit that actual OEW will typically be about 619,000 lbs. Two years ago, when I suggested that actual OEW, as configured by the airlines, would be about 20,000 lbs over spec, I was excoriated here. Turns out I underestimated the weight problem.

The 787 has an internal OEW their target weight which is it slightly above, however they have a spec OEW which they are within tolerance with.

Same with the 380, the are slightly off their internal OEW (by less than 2%, and less than 1% after MSN 54), however well within the OEW guaranteed to operators.

If you had actually been watching the OEW closely, in Sept 2003 it was published as 280.7t (618.8klb), now it is published as 270t (595.2 klb), a significant reduction.
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BoomBoom
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 3:30 am

Quoting Keesje (Reply 2):
I think if we look through Randy's archive we find some fine predictions on the 747-adv, Sonic Cruiser and if we are talking year 2000, a lot more

In the intrest of fairness, I think we should examine some of John Leahy's comments on the A350 Version 4, and we need only go nine months for this gem:

Quote:
The A350 uses aluminum lithium over composite for the fuselage because, Leahy says, it will be easier to repair for “ramp rash.”Using composite would save only about 550kg, not enough to offset the damage issue.

The flight crew rest area will be below the cockpit in stand-up capability, vs. what Leahy called the 787 crew rest area in the overhead bin (above the cabin).

Leahy also argued that the A330 is more efficient than the 787.

http://www.leeham.net/filelib/ScottsColumn032806.pdf
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Ken777
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 3:35 am

When Randy made his comments about follow-on orders I would guess he was talking about the 380 being delivered on time (or just slightly late), the 380 operators having time to evaluate actual performance and then placing follow-on orders.

That situation didn't pan out. SQ & QF have placed follow-on orders, but (while we don't know the details) it appears that these orders were part of a negotiated compensation. It may well mean that the airlines consider the 380 a great plane, but it may also mean that the deal was too good to pass up - probably a combination of both.
 
TeamAmerica
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 3:44 am

Quoting Ken777 (Reply 12):
SQ & QF have placed follow-on orders, but (while we don't know the details) it appears that these orders were part of a negotiated compensation. It may well mean that the airlines consider the 380 a great plane, but it may also mean that the deal was too good to pass up - probably a combination of both.

It has to be both - nobody is buying aircraft they don't want. What we need to see is an A380 sale to a customer who isn't getting an extraordinary deal, but wants it anyway.
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RIXrat
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 5:22 am

If there would not be this utter delay on the A380 and the A350, would Airbus be able to sell the A330 and A340 as compensation merchandise "for the time being" until the delays are made good?

It seems to me that Airbus is pumping out unwanted aircraft at a bargain price just to satisfy the client and then having to take them back once the real order is done.
 
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glideslope
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 5:49 am

Quoting RIXrat (Reply 14):
If there would not be this utter delay on the A380 and the A350, would Airbus be able to sell the A330 and A340 as compensation merchandise "for the time being" until the delays are made good?

No.

Quoting RIXrat (Reply 14):
It seems to me that Airbus is pumping out unwanted aircraft at a bargain price just to satisfy the client and then having to take them back once the real order is done.

"Subsidized Price" would be more appropriate. Interesting way to look at it though. IMO, we will see the same chaos with the 350 as the 380. Airbus never learns from their mistakes, or notices the mistakes of others.
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 6:07 am

Quoting Glideslope (Reply 15):
"Subsidized Price" would be more appropriate. Interesting way to look at it though. IMO, we will see the same chaos with the 350 as the 380. Airbus never learns from their mistakes, or notices the mistakes of others.

IMHO this is due to two factors: Airbus has been the sales leader for 5 years, and they have only been a major player for 20; before that Boeing was sales leader for 40. I think it went to their heads and they didn't know how to handle it. The other is the political nature of Airbus that gets in the way of sound business decisions.
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zvezda
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RE: Was Some Of Randy Baseler's A380 Thinking Righ

Fri Jan 05, 2007 6:17 am

Quoting Glideslope (Reply 15):
IMO, we will see the same chaos with the 350 as the 380. Airbus never learns from their mistakes, or notices the mistakes of others.

That seems like quite a wild assertion. Can you back that up? Evidence? Logic? Anything?
 
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 7:42 am

Quoting Glideslope (Reply 15):
"Subsidized Price" would be more appropriate

That's why they are so worried about the WTO case. Airbus will do anything to maintain market share as layoffs are just not possible for this company. It is and will continue to be a European jobs program until and unless the government influence is reduced. Not likely IMO.
 
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 10:38 am

Quoting Zeke (Reply 10):
If you had actually been watching the OEW closely, in Sept 2003 it was published as 280.7t (618.8klb), now it is published as 270t (595.2 klb), a significant reduction.

Can you provide a link that shows the A388 OEW as 270t? The Airbus web site says 276.8t.

http://www.airbus.com/en/aircraftfam...lies/a380/a380/specifications.html
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 10:58 am

Quoting SEPilot (Reply 16):
IMHO this is due to two factors: Airbus has been the sales leader for 5 years, and they have only been a major player for 20; before that Boeing was sales leader for 40. I think it went to their heads and they didn't know how to handle it. The other is the political nature of Airbus that gets in the way of sound business decisions.

Then you replace those who are incapable. Once again going back to "Airbus can never make a tough, quick decision. It's the Business Model. They are run like a Government Agency they simply keep throwing money ( cough, cough, Loans) at problems. Airbus will continue to drown in their own National Pride, and Labor Union woes. Europeans need to undrstand a job is not a birth right. This will hit home when the second 320 line opens in China.  Wink
To know your Enemy, you must become your Enemy.” Sun Tzu
 
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glideslope
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:09 am

Quoting Zvezda (Reply 17):
That seems like quite a wild assertion. Can you back that up? Evidence? Logic? Anything?

Because Airbus is still run as a Government Agency. I see no signs of executives being replaced with outside people with new ideas. I see no way of dealing with the EU Labor Unions, and China. I see way too much on their plate. The 380 is still a mess , IMO. So let's start the 350X, 332F, finish the A400, do the 320NG, and start planning for it's replacement.

All with the same people who are still trying to finish the 380.

I'm a positive person, but the plate is WAYYY to full.
To know your Enemy, you must become your Enemy.” Sun Tzu
 
NAV20
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:21 am

Quoting PVG (Reply 18):
That's why they are so worried about the WTO case. Airbus will do anything to maintain market share as layoffs are just not possible for this company. It is and will continue to be a European jobs program

I suspect that the situation regarding layoffs might change after the French elections (which I believe are due in May?).

I also expect that the EU governments will have trouble getting the proposed Euro4.0B. government-guaranteed bond issue past the World Trade Organisation. The US Government would be mad not to add the bond issue to its current complaints, it is nothing more nor less than the 'launch aid' wolf in sheep's clothing.

It remains to be seen what Airbus will do (or be forced to do) if it doesn't get its hands on the promised E4.0B. during 2007?
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ikramerica
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:28 am

Quoting Ken777 (Reply 12):
When Randy made his comments about follow-on orders I would guess he was talking about the 380 being delivered on time (or just slightly late), the 380 operators having time to evaluate actual performance and then placing follow-on orders.

This is the part the article doesn't mention, and it's spot on.

The test of the follow-on orders vs. new customers is going to come after delivery. So whether Randy is right or wrong (and I think he's right because, horror of horrors, his numbers add up and the market is reflecting that), we won't know until 2008+, since the whole answer has been pushed back 2 years due to delays in delivery.

I expect all current major customers save for VS and UPS to fill out their options and possibly order more (depending on the carrier) but not until after some have been delivered and there is a track record. SQ and QF will both have fleets of 25 or so, AF will add 5 more, China will order more. EK will order A389s if they are offered. VS will convert to 350s and UPS is waiting for the A332F launch to reconvert their order, in my opinion.

And under the old sales pitch, even with cancelations (which would be fewer since there wouldn't be the delays), the follow ons would have amounted to more than 270 orders, so the aircraft would have been at break even. By 2008-2009 (at least in orders).

Fighting for 500 new orders from new customers was still a monumental task, but at least the project wouldn't have lost money...

But now that the first 150 delivers are a net zero to the bottom line (according to Airbus), they need to make up for the cancelations and get 150 NEW orders just to break even, and that may happen, but not right away. Not by 2015 even. And by then, will they already have to be investing into updates to the plane, since it is based on pre-787/350 technology?
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osiris30
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:34 am

Quoting NAV20 (Reply 22):
It remains to be seen what Airbus will do (or be forced to do) if it doesn't get its hands on the promised E4.0B. during 2007?

I don't think they will be getting 4B EU from the governments, or anywhere close to that.. *maybe* 1B in local/"state" incentives, which frankly the B supporters can't say much about.. I think the gravy train has just about left the station.
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ikramerica
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:38 am

Quoting Osiris30 (Reply 24):
*maybe* 1B in local/"state" incentives,

but with the factories built and jobs already secure, what kind of incentives are there? bribes for Airbus not to move stuff overseas?

usually, and I'll say usually, the local/state incentives for Boeing Airbus come at the beginning of the project, when municipalities are fighting for the companies to set up shop in their area and bring jobs and tax revenue with them. And they are willing to "help" them to do it.

But once the project is established, what are the added incentives about?
Of all the things to worry about... the Wookie has no pants.
 
NAV20
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:48 am

Quoting Osiris30 (Reply 24):
I don't think they will be getting 4B EU from the governments, or anywhere close to that.. *maybe* 1B in local/"state" incentives

That's not what the pre-Christmas FT report said, Osiris30:-

"Citing anonymous sources, the Financial Times said EADS directors agreed late Thursday that the company should fund about 6 billion euros ($8 billion) of the program independently, with a further 4 billion euros ($5 billion) either provided directly or guaranteed by the French, German, Spanish and British governments. Some of the state-guaranteed cash could be raised in a bond issue, the newspaper said."

http://seattletimes.nwsource.com/htm...1_webairbus01.html?syndication=rss

I don't somehow see a government contribution of THAT size getting through the WTO 'on the nod.'  Smile
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flydreamliner
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 12:07 pm

Quoting SEPilot (Reply 16):

IMHO this is due to two factors: Airbus has been the sales leader for 5 years,

There was an article published in today's (well, soon to be yesterday's for europe) Independent - out of Britain, which stated that Airbus had been the sales leader up through 2004, and as 2005, Boeing had been the sales leader, having captured 52% of all commercial aircraft orders by value. So if you are counting by frames, Airbus moved more last year. If you are counting by value (which makes sense... if Bombardier sold 1,100 CRJ's, would they be the world's largest commercial aircraft maker?), Boeing won last year. While typically the narrowbody race goes heavily in favor of Airbus, I believe 737 may have outsold A320 this year.

Quoting NAV20 (Reply 26):
That's not what the pre-Christmas FT report said, Osiris30:-

"Citing anonymous sources, the Financial Times said EADS directors agreed late Thursday that the company should fund about 6 billion euros ($8 billion) of the program independently, with a further 4 billion euros ($5 billion) either provided directly or guaranteed by the French, German, Spanish and British governments. Some of the state-guaranteed cash could be raised in a bond issue, the newspaper said."

http://seattletimes.nwsource.com/htm...1_webairbus01.html?syndication=rss

I don't somehow see a government contribution of THAT size getting through the WTO 'on the nod.' Smile

Man, and at Boeing they are expected to actually sell aircraft to pay to develop new ones.... at Boeing, one major failure could spell the end of the company (then again, since 707, they've never had a failed major product), whereas at Airbus, a failed major product doesn't seem to be an issue at all. 707, 717, 727, 737, 747, 757, 767, 777 and 787 were all profitable product, even from the McDonnell history of BCA, DC-8, DC-9, DC-10, MD-80, and I believe MD-90 and MD-11 floated around near break even, if only due to their very low costs of development.

Airbus can go through many different poorly received iterations of A350, have more than one design freeze, spend hundreds of millions or more developing an aircraft, then just toss it out and start on a new iteration of A350, and can lose money like wild on the A380, which taking into account all of the money that had to be paid as compensation for late deliveries, as well as discounts on other aircraft offered as compensation, and the fact that with every year, the break even number needed grows - Airbus is nowhere even in sight of profitability on A380, whether it is a good aircraft or not. They can lose money on their expensive overhaul of A340 - and with all the A320s they are selling, you'd even think they could afford all of these gaffs, but in fact, they are subsidized like wild by the governments of Europe. To me, the A380 is a trophy jet, airbus was the only voice offering such an inflated estimate of the market for such a machine, but when profitability isn't always concern #1, and national pride comes into the picture, things like concorde and A380 get built.

If boeing was run like airbus has been of late, they would have built sonic cruiser, whether there were enough orders to make it profitable or not, just to prove that the American aircraft maker could do it.
"Let the world change you, and you can change the world"
 
NAV20
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 12:21 pm

Quoting FlyDreamliner (Reply 27):
Man, and at Boeing they are expected to actually sell aircraft to pay to develop new ones....

I think 'the plot thickens' even more, FlyDreamliner. Both companies traditionally spend only around $US2.0B. per annum on new model development. Airbus simply doesn't NEED, and couldn't spend, E4.0B. in 2007 just on starting development of the A350.

It's much more likely that the E4.0B. cash injection is needed to fund loss-making production of the A380, set against the proceeds of only only ONE delivery in 2007, and precious few in 2008. And also to enable Airbus to go on paying people full salary to do not very much work, while they're waiting for A380 production to restart.

AND probably pay Airbus' share of building the Chinese assembly plant.

[Edited 2007-01-05 04:23:23]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
zwaving
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RE: Was Some Of Randy Baseler's A380 Thinking Righ

Fri Jan 05, 2007 12:27 pm

Reading this frenzy between combatants and champions of their favourite knights is a delightfull way to pass the time my fellow travellers. However, forget not the deep pockets of the French when it comes to their pride, and it won't be their money, everything on the back of a taxpayer that by and large will never be able to afford the price of a ticket to get on that pregnant flying bus.
My only statement to all of your well thought rhetoric is this.
No matter who wins the argument, we will wind up with a whole flock of gigantic balloons with jet engines attached, coming to an airport near you, filling up the terminals with thousands of heckled passengers who have spent the last six hours cramped into the middle row of the back yard zoo. Standing shoulder to shoulder in a customs hall reeking of humanity attempting to deal with the latest security measures while the traffic jam outside the terminal has caused the normal chaos accruing from the arrival of yet another flying behemoth.
God, I am glad I love a train ride.
And, if all the naysayers are correct, there will just be another bunch of CEOs sent packing with an obscenely fat severance package.  Smile
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Dougloid
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 12:32 pm

Quoting Zvezda (Reply 6):
I find it particularly interesting that FI write that the spec OEW is 596,000 lbs but Airbus admit that actual OEW will typically be about 619,000 lbs. Two years ago, when I suggested that actual OEW, as configured by the airlines, would be about 20,000 lbs over spec, I was excoriated here. Turns out I underestimated the weight problem.

I too missed this somewhat startling admission from back in 04. It was the considered opinion of a friend of mine who is a structures DER and well acquainted with aircraft interior weights that the OEW figures that Airbus started with in the Facilities manual were hopelessly optimistic. He figured an aircraft with the 555 passenger interior and a standard airliner interior was going to be on the bad side of 620,000 pounds. At present Airbus admits to 608,400. Because there's no room for growth unless Airbus manages to get the ZFW limit raised from 745,000 or thereabouts, any escalation of OEW here cuts right into passengers or freight...there's absolutely no wiggle room to be had.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Dougloid
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 12:39 pm

Quoting PVG" class=quote target=_blank>PVG (Reply 18):
Quoting Glideslope (Reply 15):
"Subsidized Price" would be more appropriate

That's why they are so worried about the WTO case. Airbus will do anything to maintain market share as layoffs are just not possible for this company. It is and will continue to be a European jobs program until and unless the government influence is reduced. Not likely IMO.



Quoting NAV20 (Reply 22):
Quoting PVG (Reply 18):
That's why they are so worried about the WTO case. Airbus will do anything to maintain market share as layoffs are just not possible for this company. It is and will continue to be a European jobs program

I suspect that the situation regarding layoffs might change after the French elections (which I believe are due in May?).

I also expect that the EU governments will have trouble getting the proposed Euro4.0B. government-guaranteed bond issue past the World Trade Organisation. The US Government would be mad not to add the bond issue to its current complaints, it is nothing more nor less than the 'launch aid' wolf in sheep's clothing.

It remains to be seen what Airbus will do (or be forced to do) if it doesn't get its hands on the promised E4.0B. during 2007?

The Power8 program would worry the hell out of me if I worked for Airbus. Part of their funding for the A350 is going to come from several billion in savings that are to be the product of the Power8 program of cost reductions.

That is going to be paid for in blood. ....mark my words.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
TeamAmerica
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 1:05 pm

Quoting Ikramerica (Reply 23):
But now that the first 150 delivers are a net zero to the bottom line (according to Airbus), they need to make up for the cancelations and get 150 NEW orders just to break even, and that may happen, but not right away

Using Airbus's own accounting, they need the first 150 plus another 270 just to break even. The additional 270 have to be sold at normal discount, and the production line has to be running continuously at near capacity, and the exchange rate needs to fall back to about $1.21/€. Other than that the program is in fine shape. smile 
Failure is not an option; it's an outcome.
 
zvezda
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 1:47 pm

Quoting Glideslope (Reply 21):
So let's start the 350X, 332F, finish the A400, do the 320NG, and start planning for it's replacement.

All with the same people who are still trying to finish the 380.

I'm a positive person, but the plate is WAYYY to full.

This is why I suggested that Airbus stop taking additional WhaleJet orders (after a fair notice period to the airlines for one last chance to order). This would allow Airbus management to focus on the more important problems at hand.
 
osiris30
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 1:48 pm

Quoting Ikramerica (Reply 25):

usually, and I'll say usually, the local/state incentives for Boeing Airbus come at the beginning of the project, when municipalities are fighting for the companies to set up shop in their area and bring jobs and tax revenue with them. And they are willing to "help" them to do it.

But once the project is established, what are the added incentives about?

Lots of psuedo legit ways, like big (additional) R&D tax credits, etc. It's not uncommon anywhere in the world... and frankly if it's 1B EU worth I don't think too many folks could gripe. By rebuilding a line they could also claim investment credits for high-tech jobs, etc.

Quoting NAV20 (Reply 26):

I don't somehow see a government contribution of THAT size getting through the WTO 'on the nod.'

I also don't know if I see that happening honestly.. I know it sounds good in the press but there has been no forward action on that front at all... Smells of indecision and infighting within the governmental ranks... The governments don't need EU grief. A change in the monitary policy that's driving the strength of the EU vs. dollar would be a much 'simpler' approach. The strong EU cannot be good for any European industry right now.

Quoting Dougloid (Reply 31):
The Power8 program would worry the hell out of me if I worked for Airbus. Part of their funding for the A350 is going to come from several billion in savings that are to be the product of the Power8 program of cost reductions.

That is going to be paid for in blood. ....mark my words.

The problem for Airbus is, given their reliance on government money I don't think they *can* implement all of power 8.. I expect we'll see Power 4.25639... if they go for the whole Power 8 thing, then they risk losing any government support (good luck selling 4B EU to the unemployed tax payers who were laid off by Airbus).

Quoting TeamAmerica (Reply 32):
and the exchange rate needs to fall back to about $1.21/€.

That, believe it or not, is the single biggest problem for Airbus. It's a no win. If they up their prices to make money on the damned things they lose customers to Boeing on price. Leahy is rumored to have historically been very aggressive on price (which is fine as long as you're selling at a slim profit undercut your competitor till your heart is content). With a strong EU, Airbus can't play the purchase price game as strongly.. that means they have to compete on oeprating economics.. and with the exception of the 320, everything in their lineup looks weak right now (340 can't compete with the 777, the 330 is in tough against the 787, and the 380 well.. economically it can compete, but it's a huge risk in the eyes of potential customers, both in terms of exposure with that many seats, and in terms of Airbus's ability to deliver them).

I *still* think Airbus should have re-engined the 330, and sold them CHEAP. The 330 could almost certainly be produced/sold more cheaply than the 787 for the next 5-10 years, and re-engined would have been a DECENT alternative to airlines who: a) needed planes sooner rather than later b) were starting up/expanding into longer haul stuff c) just plain old fashioned don't like Boeing d) can't afford a ton of 787s and don't want to lease.

But hey what do I know, I'm just an outsider peering in... No way that such a beast could sell.. I mean the 330 orders have all but dried up since the 787 was launched... oh wait a minute.. they haven't... at all... hrmmm......
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
ikramerica
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 1:58 pm

Quoting TeamAmerica (Reply 32):
Using Airbus's own accounting, they need the first 150 plus another 270 just to break even.

What I said though was that under Randy's original projections, which seem to be spot on based on the market and what I had come up with without seeing Randy's words, follow-on orders from existing A380 customers would have come to about 270 orders, which was break even.

But now that the first 150 planes are a wash, those 270 won't cut it, so Airbus has to come up with new orders of 150 on top of follow-on orders to break even. And they also have to replace the canceled orders, FX and VS (who may convert to 350) and UPS (who may convert to 330F).

It's not an enviable position.

Quoting Osiris30 (Reply 34):
It's not uncommon anywhere in the world... and frankly if it's 1B EU worth I don't think too many folks could gripe. By rebuilding a line they could also claim investment credits for high-tech jobs, etc.

That makes sense, and if it's common, I don't see why people would have a problem with it.
Of all the things to worry about... the Wookie has no pants.
 
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zeke
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 4:01 pm

Quoting OldAeroGuy (Reply 19):
Can you provide a link that shows the A388 OEW as 270t? The Airbus web site says 276.8t.

Page 2-1-1 of the A380 airport planning guide, 270,015 kg for the A380-841 and 270,281 kg for the A380-861.

I know you have access to this document already.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
SEPilot
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 8:23 pm

Quoting Osiris30 (Reply 34):
The problem for Airbus is, given their reliance on government money I don't think they *can* implement all of power 8.. I expect we'll see Power 4.25639... if they go for the whole Power 8 thing, then they risk losing any government support (good luck selling 4B EU to the unemployed tax payers who were laid off by Airbus).

This is the heart of Airbus's dilemma. Either they are a business or a government sponsored jobs program; it just doesn't work to try and straddle that fence. If they were truly running a business I don't believe they would have ever built the A-380.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
NAV20
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 10:16 pm

Quoting Osiris30 (Reply 34):
know it sounds good in the press but there has been no forward action on that front at all... Smells of indecision and infighting within the governmental ranks...

Very perceptive IMO, Osiris30. I get exactly the same impression, that even now no-one is truly facing the facts. Not surprising, really - they tried bringing in an outsider, Streiff, who presumably told them the truth - and got let go for his pains. All other posts were filled by internal promotions of the 'usual suspects' - people like Gallois, who have been running the show since EADS started in 2000.

Quoting Osiris30 (Reply 34):
The governments don't need EU grief. A change in the monitary policy that's driving the strength of the EU vs. dollar would be a much 'simpler' approach.

Agree that the EU governments won't want an open row with the WTO - that would be throwing the EU baby out with the Airbus bathwater. I'm not sure, though, in any case, that there's much that the EU mandarins can do about the strength of the Euro - it seems to be much more a matter of a weak dollar rather than a strong Euro. And even if they succeeded in devaluing the Euro somewhat - by reducing interest rates etc. - it would play havoc (FURTHER havoc) with many European economies. Again, the baby as well as the bathwater.......

The simple fact is, EU monetary union doesn't work in economic terms. It's crazy, IMO, even to imagine that the same currency value and interest rate regime will suit every country from the Baltic to the Mediterranean, and from the Atlantic to the Ukraine. Still crazier to insist that NONE of those countries should ever run a public expenditure deficit.

Not my fault - I voted against Britain joining the Common Market in the first place, back in 1973, and I haven't changed my opinion of the whole idea of the EU since.  Smile
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
Joni
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 10:57 pm

Quoting SEPilot (Reply 16):
IMHO this is due to two factors: Airbus has been the sales leader for 5 years, and they have only been a major player for 20; before that Boeing was sales leader for 40. I think it went to their heads and they didn't know how to handle it.

I read an article about this somewhere (I forget where) and there were clear parallels between how Airbus let things slip once it became the predominant actor, and how Boeing let things slip when it was the predominant actor. It's human nature to assume the status quo will continue when you agree with it.

Quoting PVG (Reply 18):
Airbus will do anything to maintain market share as layoffs are just not possible for this company.

According to Gallois, there are "painful" job cuts on the way.

Quoting Glideslope (Reply 21):
Because Airbus is still run as a Government Agency.

Huh?

Quoting NAV20 (Reply 22):
I also expect that the EU governments will have trouble getting the proposed Euro4.0B. government-guaranteed bond issue past the World Trade Organisation.

Again, the WTO doesn't have a veto on the issue - it can only investigate after the fact, and in any such ruling (which would take years) it would in all likelihood deliver a split verdict also condemning ways the US has supported Boeing.

Quoting FlyDreamliner (Reply 27):
at Boeing, one major failure could spell the end of the company

Not the case - Boeing is of strategic importance to the US and it's bankruptcy is not an option in any circumstances.

Quoting Zwaving (Reply 29):
However, forget not the deep pockets of the French when it comes to their pride

Hey, nice one. The French do have their pride, but they're not the only ones playing that game.

Quoting Zvezda (Reply 33):
This is why I suggested that Airbus stop taking additional WhaleJet orders (after a fair notice period to the airlines for one last chance to order). This would allow Airbus management to focus on the more important problems at hand.

I disagree, as selling planes is how Airbus makes money, and in fact 2006 was one of their best years ever in that regard.
 
astuteman
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 10:59 pm

Quoting NAV20 (Reply 28):
I think 'the plot thickens' even more, FlyDreamliner. Both companies traditionally spend only around $US2.0B. per annum on new model development. Airbus simply doesn't NEED, and couldn't spend, E4.0B. in 2007 just on starting development of the A350.

It's much more likely that the E4.0B. cash injection is needed to fund loss-making production of the A380

I enjoy reading your posts, NAV20, but some days you don't half post some crap  biggrin .

IF E4.0Bn is Borrowed to assist in the A350 development, it will be spent over the period of 2007 - 2014 at least.
You're quite right, though. Airbus couldn't possibly spend that much on R+D in one year.

Regards
 
NAV20
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:03 pm

Quoting Joni (Reply 39):
Again, the WTO doesn't have a veto on the issue - it can only investigate after the fact, and in any such ruling (which would take years) it would in all likelihood deliver a split verdict also condemning ways the US has supported Boeing.

So, Joni - are you saying that, simply because the WTO takes a long time to reach decisions, the 'way to go' is for the EU governments to go on pouring taxpayers' money into Airbus to keep it afloat?

I'd have thought that it was common ground between us that, ideally, Airbus should be re-organised and re-structured so that it can stand on its own feet?
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
NAV20
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:10 pm

Quoting Astuteman (Reply 40):
IF E4.0Bn is Borrowed to assist in the A350 development, it will be spent over the period of 2007 - 2014 at least.
You're quite right, though. Airbus couldn't possibly spend that much on R+D in one year.

Don't see where we're disagreeing, A'man. If the E4B. is indeed intended to assist A350 R & D, why wouldn't it be paid in instalments? If it's just paid over up front, Airbus would be at liberty to use it to help their short-term cash flow. That's all I'm saying.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
Dougloid
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Fri Jan 05, 2007 11:27 pm

Quoting Zeke (Reply 36):
Page 2-1-1 of the A380 airport planning guide, 270,015 kg for the A380-841 and 270,281 kg for the A380-861.

I know you have access to this document already.

Zeke, I think those numbers from the APG are pretty much out of date and have been overtaken by events. Airbus is using 608,400 these days and some suggest that it could be more. A lot will depend on customer configuration and quality of interior furnishings.

In addition, I suspect that the first one that is slated to go to Singapore will be some heavier because it is a prototype, just as 447 was the MD11 prototype and it carried a lot of stuff that was weeded out in the production process. So MSN002 (?) may not be representative of the breed as a whole. It will be interesting to see what it goes over the scales at.

the longest walk in the world is not the one to the gas chamber. The longest walk in the world is the one from the hangar to the office when you've got the scale readings in hand and you know it isn't good news for the customer.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
leelaw
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RE: Was Some Of Randy Baseler's A380 Thinking Righ

Fri Jan 05, 2007 11:46 pm

Quoting Dougloid (Reply 43):

MSN003, the first production aircraft for SQ isn't one of the designated flight-test aircraft (MSN001, 002, 004, 007, 009-first EA powered). IIRC, 003 was assembled between 007 and 009, and is the fifth aircraft off the assembly line.
Lex Ancilla Justitiae
 
OldAeroGuy
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Sat Jan 06, 2007 12:31 am

Quoting Zeke (Reply 36):
Quoting OldAeroGuy (Reply 19):
Can you provide a link that shows the A388 OEW as 270t? The Airbus web site says 276.8t.

Page 2-1-1 of the A380 airport planning guide, 270,015 kg for the A380-841 and 270,281 kg for the A380-861.

I know you have access to this document already.

I wonder which one is correct? If Airbus can't sort out the 555 pax typical OEW, how we poor mortals ever do it?
Airplane design is easy, the difficulty is getting them to fly - Barnes Wallis
 
BoomBoom
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Sat Jan 06, 2007 12:42 am

Quoting Joni (Reply 39):
it (the WTO) would in all likelihood deliver a split verdict also condemning ways the US has supported Boeing.

This would hurt Airbus far more than Boeing, because Airbus gets all the same government support Boeing gets in addition to launch aid.
Our eyes are open, our eyes are open--wide, wide, wide...
 
osiris30
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Sat Jan 06, 2007 1:19 am

@joni:

I think you overrate the strategic importance of Boeing to the US. The government hasn't stepped in to save MD or any other number of aerospace firms now gone (bancrupt or merged). They will let the market handle it. If Boeing were going broke the market would take care of it.

Additionally, you're playing a what if scenario against something that happening and has been ongoing for a while. I could equally suggest that if Boeing were going broke they would be bought by the government of Sumatra  Wink. Neither is particularly relevant (or correct IMHO).

@sepilot

I'm not so quick to pass judgemment on the inital 380 decision. While in hindsight I think most reasonable people would agree it represent an unacceptable and questionable business risk to Airbus, you have to remember that at the time it wasn't the worst idea ever.

What does surprise me is customers told Boeing for a long time, don't go much bigger than the 74x. Boeing listened, Airbus forged ahead becaused they perceived the VLA segment to be a cash cow... Hasn't quite worked out that way now has it.

@nav20:

I think the 4B€ is a pipe dream. Same with a full power 8. Airbus is in much bigger trouble right now than most people think. (And yes I know I'll get flamed for that). A lot of folks wish it was different so they bury their heads in the sand, but the simple fact is the only two lines 'working' for Airbus are the 320 and 330 and that's not enough to sustain everything they have going on.

(Posted on my phone forgive typos, etc. Please)
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
Dougloid
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Sat Jan 06, 2007 1:42 am

Quoting Leelaw (Reply 44):
Quoting Dougloid (Reply 43):


MSN003, the first production aircraft for SQ isn't one of the designated flight-test aircraft (MSN001, 002, 004, 007, 009-first EA powered). IIRC, 003 was assembled between 007 and 009, and is the fifth aircraft off the assembly line.

Grazie....molto bene...thank you for the correctification. If Singapore is getting the first "production aircraft" we ought to have some interesting information coming thru the pipe after it enters into service. Although my sense of it tells me it'll be anything but a real, production aircraft.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
SEPilot
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RE: Was Some Of Randy Baseler's A380 Thinking Right?

Sat Jan 06, 2007 1:47 am

Quoting Osiris30 (Reply 47):
What does surprise me is customers told Boeing for a long time, don't go much bigger than the 74x. Boeing listened, Airbus forged ahead becaused they perceived the VLA segment to be a cash cow... Hasn't quite worked out that way now has it.

I remember reading things to this at the time, and I also had observed that 747 sales were falling off, and I didn't believe that it was because it was too small. I also remember Boeing spokesman saying that they perceived a total market for a larger plane to be less than something like 500 planes, and it just didn't make sense to build it. How Airbus perceived it to be a cash cow is the question-they had access to all the information Boeing had. The fact that Boeing had it in their capability to stretch the 747 and steal some of the market (which is exactly what they have done) at much less cost and risk should have also entered into their thinking. But instead they wanted to prove that they could build one bigger and better than Boeing, and are stuck with the result. I thought at the time of the launch that it was a bad decision, and it has played out almost as I expected, except I did not expect them to stumble so badly on getting it into production. I've often said that international diplomacy is carried on at the level of 4-year old kids in a sandbox; if business is carried on like that the results will be disastrous.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler

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