elvis777
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Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 9:32 am

Howdy all,


Some exerpts:

"...Airbus is considering teaming with a major partner to help it replace its best-selling single-aisle aircraft, ....

....Covering the large seat range will probably require a family of aircraft and, Williams says, Airbus will "not necessarily do all of that ourselves." He adds that "we might find other partners" to work on that aircraft.....

..Industry officials indicate there have been exploratory talks between Airbus officials and representatives from Embraer..


Embraer President and CEO Frederico Fleury Curado says the company "would consider" cooperation on a future narrowbody, but he doesn't see such an aircraft emerging for another 8-9 years....

According to European aerospace company sources, EADS top management is highly interested in reaching a deal with Embraer because the Europeans are impressed with the firm's technological and management capabilities. They also see a joint venture approach as a means to cut costs.


irbus views finding a potential partner for a new program as insurance should Boeing spring a 737 replacement earlier than expected. With A380 output still ramping up and development of the A350XWB twin-widebody just starting, there is a feeling that Airbus could not react quickly on its own to a new Boeing challenge.


One of the pitfalls of trying to form an alliance with Embraer is that it could strain Airbus's relations with Russia and China, both expected to be key partners on the A350


Airbus officials are particularly sensitive to the possibility of being caught out in terms of engines. When they created the A340-500/-600, engine technology drove them to stick with the quad-turbofan design. A few years later, however, Boeing was able to take advantage of a new-generation build standard to create the 777-300ER, which has been outselling its rival.............................................."

Much more, in fact the whol article can be found here

Family Planning
Aviation Week & Space Technology
07/02/2007, page 38

Robert Wall
Paris
Jens Flottau
Frankfurt

"Airbus flirts with Embraer to develop a future narrowbody"

Peace

Elvis777
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osiris30
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 9:39 am

Interesting...

I will point out that I suggested a pair up over a year ago in this space.. Boeing + BBD and Airbus + EMB.. I'd go and find the post, but meh.

Oddly I'm not so sure about the Boeing + BBD part of it now.. Boeing may have given themselves enough breathing room with their schedule to not need a partner (aside from possible production constraints). The 737/320 replacement segment sure is going to be interesting.

Can't wait to see the battles over that one on here  Wink
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atmx2000
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 9:57 am

Quoting Elvis777 (Thread starter):
Airbus officials are particularly sensitive to the possibility of being caught out in terms of engines. When they created the A340-500/-600, engine technology drove them to stick with the quad-turbofan design. A few years later, however, Boeing was able to take advantage of a new-generation build standard to create the 777-300ER, which has been outselling its rival.............................................."

Really? It was apparent that such engines would be available at that time. I think Airbus decisions from the late 80s combined with 90s "4 for long haul" marketing locked them into quads. Besides, it isn't clear to me that the A340 would have been much better as a quad. The installed thrust is pretty much the same as the 773ER despite the latter being a twin that has higher installed thrust requirements to support single engine failures. I suppose it is possible the A346 needs that much thrust to lug around the fuel and support higher MTOWs to compensate for poorer engine SFC coupled with increased drag and weight from the quad configuration in order to achive the target range.
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cygnuschicago
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:32 am

I'd be surprised if this goes ahead as a full joint development. Most likely it will be an outsourcing agreement, kind of like the 787, where Embraer offers design resources and manufactures some components.

The advantage of a tie-up like this, is that it protects the lower end of the family from, say, "stretched" E-jets, and as a result an A318 replacement will be more successful.

Quoting Osiris30 (Reply 1):
I will point out that I suggested a pair up over a year ago in this space

Was that insightful prediction before or after the WSJ article spoke about a possible joint development of NSR between Airbus and either Sukhoi or Embraer in late 2005?  Wink
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elvis777
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:43 am

Howdy,

Quoting CygnusChicago (Reply 3):
I'd be surprised if this goes ahead as a full joint development. Most likely it will be an outsourcing agreement, kind of like the 787, where Embraer offers design resources and manufactures some components.

why?

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Stitch
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:51 am

Actually I think Boeing was also looking with Embraer about the possibility of a 125-seat or less plane... I too will have to see if I can find the article.
 
cygnuschicago
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 11:47 am

Quoting Stitch (Reply 5):
Boeing was also looking with Embraer about the possibility of a 125-seat or less plane

Yes, in the past they were rumored to tie up with Embraer, and more recently with Sukhoi. I think the driving force behind this for both manufacturers is that the ideal replacement will probably consist of two aircraft families, and having a partner will drastically reduce development cost of the smaller, as well as reduce competition.

Quoting Elvis777 (Reply 4):
why?

Well, a complete equal-share development gets complex. Firstly, you introduce a whole new bunch of stakeholders, and most seem to agree that Airbus already has enough management complexity. Secondly, you undermine commonality with either the E-Jets, or the Airbii. Thirdly, Airbus is in my opinion more advanced than Embraer on materials technology and obviously large airframe design. They'd be bringing a lot more to the table than Embraer is.

Frankly, while this may make business sense, as an aviation fan it is a little sad. If deals like this happen, it means Embraer and Bombardier will never compete for the single-aisle, short range, 110 - 200 seat market, and the duopoly will continue.
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elvis777
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 1:13 pm

Howdy,

Quoting CygnusChicago (Reply 6):
Well, a complete equal-share development gets complex. Firstly, you introduce a whole new bunch of stakeholders, and most seem to agree that Airbus already has enough management complexity. Secondly, you undermine commonality with either the E-Jets, or the Airbii. Thirdly, Airbus is in my opinion more advanced than Embraer on materials technology and obviously large airframe design. They'd be bringing a lot more to the table than Embraer is.

I don’t have a dog in this fight so at the end of the day it does not matter to me. That said I think that the roadblocks you present are not insurmountable. Some might even say that these are minors (Lots of companies have some type of equal share arrangement of some sort that works for them). As far as the complexity of eads admin it does not seem to be a big issue as this comes mainly from the political side and it appears that it will continue.... Sacrificing commonality (which might be a false god) at the altar of superior product might not be a bad idea. After all the next generation might be the new standard for commonality! Also it might just be a necessity since eads believes that if bowing comes up with a replacement model anytime soon they might not have the resources to counter it...

Quoting CygnusChicago (Reply 6):
Frankly, while this may make business sense, as an aviation fan it is a little sad. If deals like this happen, it means Embraer and Bombardier will never compete for the single-aisle, short range, 110 - 200 seat market, and the duopoly will continue.

There are many shades of aviation fans. None is better or holier than another one. So it might be interesting to see what the combined creative powers of these companies might produce. Or it might not. But as a person who has been labeled "not a true aviation fan" I could imagine that one day I might be interested/pleased at the product that a combination of two airline manufacturers might produce. Then again I might think its not very good. I need to go back to the authorizing authority and see if I still might the aviation fan standard!

Peace

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DAYflyer
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 9:27 pm

An interesting thought, given EMB desire to enter the 100-130 seat catagory. If they were able to develop a new platform based on the very economical E-190/195 series, that could spring a surprise on Boeing in this critical market.
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dougbr2006
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 9:51 pm

This was buzzing here in Brazil of September last year that Airbus had entered preliminary talks on some kind of joint venture. I would think that with the Airbus factory being built in China, EMB's part if any would be design assistance and perhaps contracted to build parts of the aircraft.

But you can never tell, if the market for a new airframe is as buoyant as the A320 series has been lately then they may want to build all of them outside of France and Germany to cut labour costs and concentrate on the widebodies there.

The new EMB president stated that they were not intending to compete against the big boys by going into the 150 seat market, but if these talks fail and BBD go ahead with the C series I would see EMB going to at least 140 seat market in response.
 
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 9:52 pm

Quoting CygnusChicago (Reply 3):
The advantage of a tie-up like this, is that it protects the lower end of the family from, say, "stretched" E-jets, and as a result an A318 replacement will be more successful.

It may protect you for this generation but not for the next. You'd be having Embraer do major fuselage sections on a plane that will cover 100 to maybe 200 passengers. Embraer will just build the plane the next time themselves as they get the credibility and know how. You share your profits in a low profit area of the market (the profits they are living off of now) and you introduce a new competitor which you develop new technology with. I think this is a mistake for Airbus. You are letting Embraer into a market you've got a duopoly on and splitting profits now three ways instead of two. They must either be very short on cash, scared of Boeing's technology or unable to develop another airplane themselves.
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EI321
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:03 pm

I'm all for Airbus taking risk sharing partners. Allegedly they tried to take on the Japanese as risk sharers on the A380 but Boeing (understandably) did not like the idea. And of course the A350 work is now basically being shared with Russia and Qatar. What I think should be remembered though is that if Embraer was to have a 40% share on the A320 replacement, Airbus only takes 60% of the profits.
 
Logos
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:04 pm

There is a sense in which Boeing has done this on a lesser scale with the 787 given the unprecedented degree of outsourcing involved, though admittedly without having one unique entity as their "partner". It could be that aircraft manufacturing is heading toward a sort of "general contractor" model where the named manufacturer functions as a designer and general (and significant sub-) contractor, and other sub-contractor partners are brought in for other aspects. In many ways, we're already there with the way Boeing has done the 787.

Even when you look at Airbus itself, it is a consortium of various national manufacturers, not a company that arose on its own (like, say, Siemens or Daimler-Benz) . To go into a stated full blown partnership with Embraer or another entity for a particular project is merely sliding further along that scale.

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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:07 pm

Quoting MrComet (Reply 10):
They must either be very short on cash, scared of Boeing's technology or unable to develop another airplane themselves.

I think that's the size of it, MrComet. Building/delivering all those loss-making A380s will probably absorb Airbus' cash resources for several years to come; and there are already signs that they are seeking 'Launch Aid Mark Two' for the A350:-

"The official, who asked not to be named, said these aims would be reflected by the finance ministry in its 2008 budget which is to go before the cabinet on Wednesday. The financial support that Germany plans to give to Airbus’s A350 mid-sized jet project has not been taken into account in the 2008 budget. The A350 is expected to go into service in 2013.

"Germany wants to contribute to the development costs of the A350, estimated at 10 billion euros ($13.6 billion), as it did for the A380, the world’s largest airliner whose troubled progress forced the introduction of a restructuring programme at Airbus this year."


http://www.dailytimes.com.pk/default...%5C07%5C03%5Cstory_3-7-2007_pg5_32

Boeing are clearly planning on an (all-composite) 737 replacement as their next project. No way that Airbus can follow suit and replace or upgrade the A320, unless they bring in a partner to share the costs.

Trouble is, a partner who shares the cost will also get to share the profits.
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bigjku
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:16 pm

Quoting Atmx2000 (Reply 2):
Really? It was apparent that such engines would be available at that time. I think Airbus decisions from the late 80s combined with 90s "4 for long haul" marketing locked them into quads.

I don't think their mistake was in building the A340. It made sense at the time. Where they made a big mistake was in building the A345&6. Those should have been bigger A330's with new wings.

As for being partners on a new narrowbody I will believe it when I see it.

It will kind of depend on what Boeing does with the 737RS. If they build a plane that does not compete with the current regional jet offerings then neither of those manufacturers have any incentive to really team up with either of the big boys in the field. They could make more money with their own offerings than they could by teaming up.

If Boeing does what a lot of people think they will do and builds two planes to compete in that market then the two regional jet builders will likley have to team up with Airbus or be wiped out. They do not have the money and resources to compete on their own with a CFRP airplane built by either Boeing or Airbus directly in their market.

The problem though is I am not sure either builder brings enough to the table to be an equal partner in the plane. With Airbus you would have the political problem of farming out a big share of the work on probably the most labor intensive part of their future product line to someone else. For Boeing and Airbus you have to ask what would either of those manufacturers bring. Certainly not any more knowlege of composites or airframes than they already have. If they do that without full out purchasing the company then they are just enabling a competitor to emerge by giving them the necessary technology to compete.

We often wonder about Boeing and Airbus competing against one another but I see no reason for either of them to want to make the regional jet builders healthy. You might as well kill them if you can do so with a reasonable return on your investment.
 
osiris30
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 10:51 pm

Quoting CygnusChicago (Reply 3):
Was that insightful prediction before or after the WSJ article spoke about a possible joint development of NSR between Airbus and either Sukhoi or Embraer in late 2005?

Well it's been something I've seen coming since the early 2000s to be honest with you. It's becoming increasingly apparant as time goes by that Embraer needs to be dealt with by Boeing/Airbus. One way to 'deal' with them is to put them under by invading their space.. the other is to partner up with them and eventually bring them into the fold. Ofcourse that logic leaves BBD in a similar position and likely leads to a similar fate. The wild card in all this is the Russian interests.

Quoting DAYflyer (Reply 8):
If they were able to develop a new platform based on the very economical E-190/195 series,

Unlikely to happen right now IMHO. A brand new platform would be an awful big undertaking for EMB alone.. or even with help from Airbus.

Either way it will be interesting to see what (if anything) comes of this.
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olle
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 11:26 pm

Even the A380 was shared with other actors like the SAAB and Volvo and probaby. Do anyone know what procentage of the A380 that was shared and how much is likeley to be shared of the new 320?
 
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 11:40 pm

Any kind of association between Embraer and Airbus would be unfortunate, awful indeed. Embraer and Boeing share an entrepreneurial mindset that Airbus does not have. Bombardier and Airbus on the other hand have many traits in common.
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aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 11:47 pm

It seems to me that if these news have substance, Airbus, because of the funding and other problems related to the A380 and A350, is giving away a part of their single aisle operation, which is their only real workhorse aside the short lived A330 successes.

If this is so, jointly with the Russian and Chinese intentions, this would be a classical example of weaken the good to support the problematic.

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osiris30
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RE: Airbus May Not Do A320 Replacement Alone

Tue Jul 03, 2007 11:53 pm

Quoting Incitatus (Reply 20):
Any kind of association between Embraer and Airbus would be unfortunate, awful indeed. Embraer and Boeing share an entrepreneurial mindset that Airbus does not have. Bombardier and Airbus on the other hand have many traits in common.

I completely disagree with the latter part of your statement (namely that BBD and Airbus have many traits in common). BBD is a radically different beast than Airbus is. While no company is perfect, BBD has historically been very entreprenurial (hence why BBD is comprised of the companies that make up BBD today).

Also, while Airbus and BBD share the fact they are the result of multiple organizations being amalgamated into one organization, BBD did so of their own accord, while Airbus/EADS was more at the urging of the local governments.
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cygnuschicago
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:04 am

Quoting NAV20 (Reply 13):
Boeing are clearly planning on an (all-composite) 737 replacement as their next project. No way that Airbus can follow suit and replace or upgrade the A320, unless they bring in a partner to share the costs.

Trouble is, a partner who shares the cost will also get to share the profits.

Well, Boeing is doing the same. They are in talks with Bombardier and Sukhoi about partnering on Y1.

On the 787, the Japanese government shouldered a large of the cost, and Spirit and Alenia have paid no small amount. They're getting a healthy portion of 787 profits. You could say, Airbus is merely copying Boeing  Smile
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bigjku
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:10 am

Quoting CygnusChicago (Reply 23):
Well, Boeing is doing the same. They are in talks with Bombardier and Sukhoi about partnering on Y1.

Sorry but I have not seen this anywhere. They have done some work with Sukhoi on the Sukhoi regional jet but I have seen nothing to indicate they want to bring in another OEM on any of their own airplanes. Certainly they might subcontract out some of the parts in the vein of the 787 program but nothing on the level of a joint project. Do you have a source that indicates otherwise?
 
cygnuschicago
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:10 am

Quoting Aminobwana (Reply 21):
irbus, because of the funding and other problems related to the A380 and A350, is giving away a part of their single aisle operation, which is their only real workhorse aside the short lived A330 successes.

Wrong. Boeing has already done this with the 787. They're looking at doing with Y1. Why is it suddenly so bad for Airbus?
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Stitch
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:20 am

Modern airliner programs are just becoming too expensive for a company even of the size of Boeing and Airbus to tackle alone. It's more then just "buying business" through sub-contracting now. Risk-sharing and deeper partnerships in both development and production are needed to make these programs a reality with an acceptable RoI.

And before someone says "yeah, but Airbus gets free money from the EU", remember that the Repayable Launch Aid maxes out at around 1/3rd of the total projected program costs and it is not "free money", having to be repaid, albeit at favorable interest rates and terms.
 
aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:39 am

Quoting CygnusChicago (Reply 25):
Quoting Aminobwana (Reply 21):
irbus, because of the funding and other problems related to the A380 and A350, is giving away a part of their single aisle operation, which is their only real workhorse aside the short lived A330 successes.

Wrong. Boeing has already done this with the 787. They're looking at doing with Y1. Why is it suddenly so bad for Airbus?

The issues are absolutely not comparable.

Boeing has teamed up with several parts suppliers, under their full control, commercially is and will be the owner of the whole B787 product line. Airbus intends to do the same with the A350 and this perfectly OK.

Embraer is not a part supplier, but already a competitor on the lower end of the A320 spectrum and surly would become progressively for the whole line.
Teaming up with them would mean that Embraer will co-own the A320 product line, the today nucleus of Airbus.

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EI321
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:53 am

Quoting Aminobwana (Reply 27):
The issues are absolutely not comparable.

Boeing has teamed up with several parts suppliers, under their full control, commercially is and will be the owner of the whole B787 product line. Airbus intends to do the same with the A350 and this perfectly OK.

Ignoring the smaller suppliers that Airbus and Boeing both subcontract to (including each other), Boeing outsources major parts to companies like alenia and kawasaki. Airbus has been doing this type of manufacturing concept since its foundation, but the difference is that the multinational plants are actually owned by airbus, wheras the main boeing ones are subcontractors. And it has not started with the 787, Boeing have done it with the 767 and 777 also.

Quoting Aminobwana (Reply 27):
Teaming up with them would mean that Embraer will co-own the A320 product line, the today nucleus of Airbus.

Just like teaming up with JADC has led Japan to be co interest of Boeings main cash cows (787+777)

You appear to be on your usual agenda of its good if Boeing does it and its bad if airbus does it.

[Edited 2007-07-03 18:09:29]
 
bigjku
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 1:02 am

Quoting EI321 (Reply 28):
You appear to be on your usual agenda of its good if Boeing does it and its bad if airbus does it.

Agreed, and it serves no purpose. Honestly it is not a bad idea for Airbus to spread some work around. I just don't think the specifics of the A320 replacement work for either Airbus or Embraer unless Boeing comes out with a 2 plane attack that really eats into Embraer's market. At that point, without the technology or money to compete, they would find it beneficial to team up with Airbus, the real question is what do they bring to the table that makes them more valuable than any other subcontractor.

It would all depend on how it is setup really. If the status quo remains, and Boeing/Airbus just go after the currently strong portion of the 737/A320 market, then the regional jet buildres have little incentive to get on board with their smaller offerings and share those profits I would think. The only reason to do it is if Boeing/Airbus look to take over that market as well.
 
EI321
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 1:18 am

Quoting BigJKU (Reply 29):
the real question is what do they bring to the table that makes them more valuable than any other subcontractor.

I smell yet another foreign production line  Wink

I think Airbus needs to know that they can trust whoever they set up shop with that there wont be a screw up. I'm not sure how competently experienced Embraer are in the field of composites, considering that the A320 replacement (and Y1) will likely have somewhere in the region of 60% composite construction.
 
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 1:47 am

Quoting EI321 (Reply 30):
I smell yet another foreign production line

I think Airbus needs to know that they can trust whoever they set up shop with that there wont be a screw up. I'm not sure how competently experienced Embraer are in the field of composites, considering that the A320 replacement (and Y1) will likely have somewhere in the region of 60% composite construction.

That is about the only thing I can think of but there are a few factors against it I would think. Brazil is a heck of a long way from the other likley sources of parts but that can be overcome.

Secondly I can envision a huge backlash against this. The A320 line probably employees more people than any other at Airbus. While a drawdown is to be expected with the switch a complete leaving of that type of production will raise eyebrows.

You could split the production but why? Assembly of these aircraft will be quicker than anything else we have seen. As much as the 787 is a snap together there will be every incentive to make the new narrowbodies moreso. One large production line makes a lot more sense than two smaller ones.

I think one of the main important factors in how this is setup is that the 787 production system will allow for production to be scaleable with less pain involved. The low amount of final assembly workers, the moveable nature of the tooling ect will allow the line to scale back without losing a lot of efficiency. I think that will be a primary goal of any new final assembly location.

That being the case I cannot see much benefit in doing 2 assembly lines for narrowbody aircraft and if you can only have one as Airbus I doubt it will be in Brazil. I would think it is much more likley that the parts of the plane are built elsewhere and the final assembly is done in France or Germany. If that is the case there are likley better partners than Embraer to make sub-assemblies.
 
aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 1:50 am

Quoting Stitch (Reply 26):
remember that the Repayable Launch Aid maxes out at around 1/3rd of the total projected program costs and it is not "free money", having to be repaid, albeit at favorable interest rates and terms.

But you must add that the repayment is prorate aircraft sold over a prestablished total quantity. If the sales do not reach this figure, the correspondent repayments are not due. In extreme, if the aircraft is not sold at all, it becomes free money,as youcall it !!

aminobwana
 
cygnuschicago
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 2:06 am

Quoting BigJKU (Reply 24):
Do you have a source that indicates otherwise?

Too lazy to do a lit search. But read this [url=http://www.airliners.net/discussions/general_aviation/read.main/3454634/?searchid=3454634&s=boeing sukhoi#ID3454634]thread[/url] for some pointers

Quoting Aminobwana (Reply 32):
If the sales do not reach this figure, the correspondent repayments are not due.

Two things that you seem unaware of:

1) That has not yet happened to ANY of the Airbus product lines.
2) Not only is the launch aid repayable if the model passes breakeven, Airbus also has to pay royalties on every sale. In fact, the very success of the A320 means that it is STILL paying royalties, providing quite a nice income to the governments (the appropriate term would be investors) that provided the launch aid. The A320 repayments and royalties total far more than Airbus would have had to pay had they gone to normal debt markets.

Launch aid is not free money. It is risk management. Like any risk management tool, it has a long term cost.
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EI321
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 2:10 am

Quoting BigJKU (Reply 31):
Secondly I can envision a huge backlash against this. The A320 line probably employees more people than any other at Airbus. While a drawdown is to be expected with the switch a complete leaving of that type of production will raise eyebrows.

This is very true, and I doubt France will have sold off the French govt share be then. Any attempt to move jobs overseas would potentially have a massive political backlash, enough to sink such a plan IMO. Unless airbus can manage to maintain a full workforce on the existing lines. For these reasons I think it is more likely that if any of the major A320 parts manufacturing types were to move to Brazil, it would be associated with the British and Spanish sides.
 
aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 2:10 am

{quote=Stitch,reply=26]Modern airliner programs are just becoming too expensive for a company even of the size of Boeing and Airbus to tackle alone.[/quote]

The A320NG program will surly not cost more as the A350XWB's. And it seems to me that for Airbus, the former is far more important as the latter

Quoting BigJKU (Reply 31):
Quoting EI321 (Reply 30):
I smell yet another foreign production line

I think Airbus needs to know that they can trust whoever they set up shop with that there wont be a screw up. I'm not sure how competently experienced Embraer are in the field of composites, considering that the A320 replacement (and Y1) will likely have somewhere in the region of 60% composite construction.

That is about the only thing I can think of but there are a few factors against it I would think. Brazil is a heck of a long way from the other likley sources of parts but that can be overcome.

Secondly I can envision a huge backlash against this. The A320 line probably employees more people than any other at Airbus. While a drawdown is to be expected with the switch a complete leaving of that type of production will raise eyebrows.

I am not sure that these are the main issues. As far I seem to understand, what Airbus is looking is to implement a joint venture with Embraer. And in such case, to obtain lower costs. doing as much as possible in Brazil, where the costs are a fraction of Europe, will be the right place. Different as in case of China (in lesser grade of Russia) , the capability of Embraer to do so with first class quality is already demonstrated

Of cause, such, combined with the fact that parts will come also largely outside the EU Airbus organization and outside the EU itself, would generate a insurmountable political backlash

As obviously EADS/Airbus are aware of such, what they are trying to implement must be something else. I pass.

aminobwana
 
EI321
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 2:35 am

Quoting CygnusChicago (Reply 33):
Not only is the launch aid repayable if the model passes breakeven, Airbus also has to pay royalties on every sale. In fact, the very success of the A320 means that it is STILL paying royalties, providing quite a nice income to the governments (the appropriate term would be investors) that provided the launch aid. The A320 repayments and royalties total far more than Airbus would have had to pay had they gone to normal debt markets.

Since the EU-U.S. Agreement in 1992, it has repaid European governments more than U.S.$6.7 billion - 40% more than it has received.
 
incitatus
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 3:28 am

Quoting Osiris30 (Reply 22):
While no company is perfect, BBD has historically been very entreprenurial

Not in the commercial aircraft market. Witness the difficulty that Bombardier is going through developing its future lineup. Bombardier is indeed running the risk of not having commercial jets to sell in the future. The ability to innovate in locomotives or snow mobiles does not permeate to commercial aircraft. Bombardier would be a bad choice for Boeing and Airbus would be a bad choice for Embraer.
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aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 3:52 am

Quoting CygnusChicago (Reply 33):
1) That has not yet happened to ANY of the Airbus product lines

This is not the point. The government is taking a huge risk away from the manufacturer
By the way: if, as widely expected the A380 will not break even, we would have the first case.

Quoting CygnusChicago (Reply 33):
Launch aid is not free money. It is risk management. Like any risk management tool, it has a long term cost.

Agreed. As said above, the risk is transferred to the Government.

Quoting EI321 (Reply 36):
Since the EU-U.S. Agreement in 1992, it has repaid European governments more than U.S.$6.7 billion - 40% more than it has received.

Thanks for the data: to be meaningful, the repayments after 1992, which in a large part correspond to launch help before this year, cannot be compared with new launch help after 1992
Of course, a large part of the repayments must correspond to interests.

As you have the data available: Since 1970, date of the Airbus Consortium creation, how much money they received and how much they repaid ?? Thanks in advance for this info

aminobwana
 
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Stitch
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 5:04 am

Quoting Aminobwana (Reply 32):
But you must add that the repayment is prorate aircraft sold over a prestablished total quantity. If the sales do not reach this figure, the correspondent repayments are not due. In extreme, if the aircraft is not sold at all, it becomes free money,as youcall it !!

That has never been shown to be true so far.

The A320 program repaid the entire RLA amount and now is paying huge royalties. The A330 and A340 program continue to repay their RLA amounts, and considering how strong the A330's sales are at the moment, those payments will continue to be coming in.And starting in October, the A380 program will start making her payments.

Quoting Aminobwana (Reply 35):
The A320NG program will surly not cost more as the A350XWB's. And it seems to me that for Airbus, the former is far more important as the latter

No it will not, but it will still be many billions of dollars. And those costs are no doubt playing a role in Boeing not launching Y1 and Y3 in the near term.
 
cygnuschicago
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 5:11 am

Quoting Aminobwana (Reply 38):
By the way: if, as widely expected the A380 will not break even, we would have the first case

Actually wrong again. It is likely that the first case may be the A340NG.

Quoting Aminobwana (Reply 38):
Since 1970, date of the Airbus Consortium creation, how much money they received and how much they repaid

You know, given all the "facts" that you post about Airbus, you seem to also have to ask others for data. Why is that? and how do you come up with all these "facts" if you don't even have the most basic data with which to crunch basic numbers? I suggest you read my signature line  Smile
If you cannot do the math, your opinion means squat!
 
PPVRA
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 5:17 am

Quoting BigJKU (Reply 31):
That being the case I cannot see much benefit in doing 2 assembly lines for narrowbody aircraft and if you can only have one as Airbus I doubt it will be in Brazil. I would think it is much more likley that the parts of the plane are built elsewhere and the final assembly is done in France or Germany. If that is the case there are likley better partners than Embraer to make sub-assemblies.

Don't expect to see Embraer as a parts supplier, or a sub-contractor. Either EMB's current or last CEO has said that they want to partner, but they want to make design/engineering decisions, and not be just a contractor. Embraer is no different than A or B - they design planes, they don't built the parts (some they do, but generally speaking).

Quoting EI321 (Reply 34):
This is very true, and I doubt France will have sold off the French govt share be then. Any attempt to move jobs overseas would potentially have a massive political backlash, enough to sink such a plan IMO. Unless airbus can manage to maintain a full workforce on the existing lines. For these reasons I think it is more likely that if any of the major A320 parts manufacturing types were to move to Brazil, it would be associated with the British and Spanish sides.

Would be nice, maybe cheaper, to built in Brazil, but there is no real need to bring it over unless Boeing decides to built the 737RS somewhere else (say Russia or India).
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
planemaker
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 5:33 am

Quoting Osiris30 (Reply 19):
While no company is perfect, BBD has historically been very entreprenurial (hence why BBD is comprised of the companies that make up BBD today).

He was referring to the extravegant government support that BBD has and continues to receive. For example, BBD were "gifted" Canadair after the govt wrote off $1-billion in debt. And they got de Havilland in two tranches of only $50-million which is a fraction of the cost of the real estate the Downsview facility sits on... not to mention the $ millions in ongoing subsidies at the federal and provincial govt level. That is not being very entrepeneurial. Likewise, they were gifted the Montreal metro contract when they had absolutely no experience in rail transport... and they were also gifted UTDC and CanCar by the govt of Ontario... etc, etc, etc.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 6:40 am

Quoting EI321 (Reply 25):
Quoting Aminobwana (Reply 27):
The issues are absolutely not comparable.

Boeing has teamed up with several parts suppliers, under their full control, commercially is and will be the owner of the whole B787 product line. Airbus intends to do the same with the A350 and this perfectly OK.

Ignoring the smaller suppliers that Airbus and Boeing both subcontract to (including each other), Boeing outsources major parts to companies like alenia and kawasaki. Airbus has been doing this type of manufacturing concept since its foundation, but the difference is that the multinational plants are actually owned by airbus, wheras the main boeing ones are subcontractors. And it has not started with the 787, Boeing have done it with the 767 and 777 also

Let me clarify fmy statement "under their full control:.I mean that the teaming effort is under their control, not the subcontracting companies themselves.

Quoting EI321 (Reply 25):
Just like teaming up with JADC has led Japan to be co interest of Boeings main cash cows (787+777)

The co-interest of JADC means that instead a fixed price paid by Boeing to them, this price and the timing will be in dependence of the results of Boeing (I assume resulting from a formula). But JADC, ALENIA and any other are not co-owners of the B787 product line and the decision are made there by Boeing alone. This is very different if two aircraft builders as Airbus and Embraer associate themselves, in this case, none of them can decide alone.

Quoting EI321 (Reply 25):
You appear to be on your usual agenda of its good if Boeing does it and its bad if airbus does it.

As I already wrote, Airbus wants to do the same as Boeing with the A350 and you have not heard anything from me suggesting it is bad !! Just the contrary !!

The reference to my usual agenda is unwarranted. I have not said that if AIRBUS and EMBRAER associate themselves for the A320NG, this is "BAD" for the A320NG. Just the contrary , I think it is a good idea from the product point of view.
But what is bad for Airbus is to loose a part of control of their main and respected product line. If I were the Airbus basher you and other admirers accuse me to be , I would be very happy and certainly not object it !!

Obviously, I could be wrong and open for arguments. I always consider and answer them.

So, for once: can we discuss this objectively and without accusations, but with arguments ??


Thank you in advance

aminobwana



[
 
elvis777
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 6:44 am

Howdy El321,

Quoting EI321 (Reply 31):
This is very true, and I doubt France will have sold off the French govt share be then. Any attempt to move jobs overseas would potentially have a massive political backlash, enough to sink such a plan IMO. Unless airbus can manage to maintain a full workforce on the existing lines. For these reasons I think it is more likely that if any of the major A320 parts manufacturing types were to move to Brazil, it would be associated with the British and Spanish sides.

Or perhaps chinese?

Peace

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Stitch
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 6:57 am

Quoting Elvis777 (Reply 41):


Quoting EI321,reply=31:
This is very true, and I doubt France will have sold off the French govt share be then. Any attempt to move jobs overseas would potentially have a massive political backlash, enough to sink such a plan IMO. Unless airbus can manage to maintain a full workforce on the existing lines. For these reasons I think it is more likely that if any of the major A320 parts manufacturing types were to move to Brazil, it would be associated with the British and Spanish sides.

Or perhaps chinese?

TLS' and XFW's A320 production is being ramped up equal to, if not greater(?), then the maximum planned production on the Chinese line, so I expect labor wasn't too distressed about the plan.

This would be more like Airbus moving all A318 production to China without a corresponding replacement in A319/A320/A321 production.
 
EI321
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 7:49 am

Quoting Elvis777 (Reply 41):
Howdy El321,

Quoting EI321 (Reply 31):
This is very true, and I doubt France will have sold off the French govt share be then. Any attempt to move jobs overseas would potentially have a massive political backlash, enough to sink such a plan IMO. Unless airbus can manage to maintain a full workforce on the existing lines. For these reasons I think it is more likely that if any of the major A320 parts manufacturing types were to move to Brazil, it would be associated with the British and Spanish sides.

Or perhaps chinese?

Doubt it. By the time Airbus get to the phase where they will be lining up partners for the 320 replacement the Chinese line will have only opened recently. And as far as I know the chinese line is not a 100% airbus entity anyway.

Quoting Stitch (Reply 42):
TLS' and XFW's A320 production is being ramped up equal to, if not greater(?), then the maximum planned production on the Chinese line, so I expect labor wasn't too distressed about the plan.

The chinese line is only planning 4/mth, or 300 in total. And the chinese A320's will only be for the chinese home market. With new developmets like the ARJ21, I think we will see chine attempting a direct Airbus / Boeing competitor in the next decade. Under current plans berlin and toulouse will produce at least 34/mth between them
 
NAV20
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 11:21 am

Quoting EI321 (Reply 43):
And as far as I know the chinese line is not a 100% airbus entity anyway.

51% Airbus, 49% Chinese 'firms' (i.e. quasi-government agencies):-

"Upon the creation of the joint venture, Airbus will hold 51 per cent of the shares, while the Chinese Consortium will hold 49 per cent.

"The construction on the Airbus A320 Family Final Assembly Line (FAL) in Tianjin was officially kicked off on 15th May 2007. The assembly of the first aircraft in China will start in August 2008 and it will be delivered in the first half of 2009. The ramp up production for the Final Assembly Line in Taijin will reach four aircraft a month in 2011."


http://www.eads.com/1024/en/pressdb/...s/20070628_airbus_fal_tianjin.html

No information on how much the plant is costing to set up - I saw a press report that the estimated upfront cost was about $1B. each way, but have never seen any firm figures.

However, given that this deal is now inked, if Airbus is going to partner anyone on developing an A320 replacement, the Chinese would undoubtedly have a very good case for asking why it should not be them?
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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PM
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 11:36 am

Quoting Aminobwana (Reply 18):
the short lived A330 successes.

Why so grudging? Why so mean-spirited? The A330 has been selling for some twenty years and looks like being in production (through the A330F) for another decade or more. Current firm sales exceed 700 and they took another 80 firm orders at Paris. An eventual production run of 1,000 over 20 or 25 years seems perfectly realistic.

We all have our preferences - and you wear yours on your sleeve - but you simply diminish your own arguments by this kind of small-minded pettiness.
 
Shenzhen
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 11:43 am

Quoting NAV20 (Reply 44):
No information on how much the plant is costing to set up - I saw a press report that the estimated upfront cost was about $1B. each way, but have never seen any firm figures.

However, given that this deal is now inked, if Airbus is going to partner anyone on developing an A320 replacement, the Chinese would undoubtedly have a very good case for asking why it should not be them?

I recall Airbus promised Hamburg the A320 replacement when they took away the A380 and gave it, and the A350, to Toulouse. Does anyone really believe that the replacement would be assembeled anywhere other then Germany?

At most this would be risk sharing on sub assemblies, but very very very very unlikely that any airplane will be assembled an first flight in Brazil.

Cheers
 
aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 12:16 pm

Quoting PM (Reply 45):
Quoting Aminobwana (Reply 18):
the short lived A330 successes.

Why so grudging?

Sorry. Sometimes you must bear with my bad English. I wanted to say:"successful for still a short time" I was not referring to the past, where the A330, together with the A320 line, was no doubt a success

aminobwana
 
EI321
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RE: Airbus May Not Do A320 Replacement Alone

Wed Jul 04, 2007 7:16 pm

Quoting Aminobwana (Reply 47):
Quoting PM (Reply 45):
Quoting Aminobwana (Reply 18):
the short lived A330 successes.

Why so grudging?

Sorry. Sometimes you must bear with my bad English. I wanted to say:"successful for still a short time" I was not referring to the past, where the A330, together with the A320 line, was no doubt a success

The A330 entered service in 1994 - 13 years ago, and its been steadily rising in sales success year on year. 2007 has already been its best sellling year to date, and there is still have of the year to go. Now there is also a new freighter version which is outselling most peoples expectations. Short lived success indeed  Wink
 
aminobwana
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RE: Airbus May Not Do A320 Replacement Alone

Thu Jul 05, 2007 1:03 am

Quoting Aminobwana (Reply 47):
The A330 entered service in 1994 - 13 years ago

I received the same message from PM and hours before I received yours had clarified/corrected my text
with reply 47

aminobwana