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LAXintl
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Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 8:46 pm

Atlas Air exercised termination rights for three early build 747-8 Freighters due to delays and performance considerations.

Atlas Air now expects to receive three 747-8Fs in 2011, four in 2012, and two in 2013 with the first five having been placed under long-term ACMI contracts with customers already. (British Airways & Panalpina)

Story:
http://finance.yahoo.com/news/Atlas-...ovides-bw-1550953077.html?x=0&.v=1

Also updated today was confirmation that the carrier plans to retire its last 5 747-200 classics freighters in 2012.
From the desert to the sea, to all of Southern California
 
jetblueguy22
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 8:49 pm

Should be interesting to where these birds end up! Wasn't too unexpected after the announcement with Cargolux last week!
Blue

[Edited 2011-09-21 13:54:52]
Look at sweatpants guy. This is a 90 million dollar aircraft, not a Tallahassee strip club
 
kl911
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 8:53 pm

Is this the same issue as Cargolux had? What is the performance issue?
 
ikramerica
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 9:04 pm

This might add to the UPS rumors. If UPS can take the 5 early build birds at a 744F price or below, they might just do so. Their business model is a bit different and they could deal with the performance issues until the GE fixes are implemented in 2013.
Of all the things to worry about... the Wookie has no pants.
 
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BoeingVista
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 9:29 pm

Quoting ikramerica (Reply 3):
This might add to the UPS rumors. If UPS can take the 5 early build birds at a 744F price or below, they might just do so. Their business model is a bit different and they could deal with the performance issues until the GE fixes are implemented in 2013.

The GE fixes wont be implemented until first engine overhaul which will be in the 2016-2017 time scale
BV
 
wjcandee
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 9:35 pm

Kind of funny that Atlas is acting imperiously, given that Boeing allegedly screwed Evergreen and gave the VLF contract to Atlas to keep it happy vis a vis the 748 delays...
 
ikramerica
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 9:56 pm

Quoting BoeingVista (Reply 4):
The GE fixes wont be implemented until first engine overhaul which will be in the 2016-2017 time scale

This I just don't understand. GE should be offering to swap out engines if that's the case and then overhauling them and offering them as discounted spares. It's obvious they are not PIP changes, but that doesn't mean the overhaul can't happen earlier.

Or it may be that GE is within their contracted spec, so they don't feel any obligation to do this, but overall, it puts the airframe out of contracted spec, and means airlines can cancel. In which case GE and Boeing are going to have a bunch of lawyers working out who is the one who owes what in that F-up.
Of all the things to worry about... the Wookie has no pants.
 
BlueBus
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 10:10 pm

Wow, not good luck for Boeing this week huh? Let's hope the 787 goes on Monday.

Quote:
Atlas Air’s decision is “absolutely unrelated” to Cargolux delaying their first 747-8 delivery.

and

“Though the first airplanes off the line are slightly short of expectations, these early-build models nonetheless will be great airplanes with unparalleled efficiency and low costs. As with all programs, we’ll continue to focus on performance improvements that increase the value these airplanes will bring to our customers.”

Story also talking about a big drop in Atlas stock recently. Things aren't going so well for them either.

http://www.airlinereporter.com/2011/...n-rights-for-three-boeing-747-8fs/
 
glbltrvlr
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 10:10 pm

This is going to rapidly spin out of control if it hasn't started already. You have to think every other buyer on the order list is reevaluating their options.
 
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LAXintl
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 10:25 pm

Quoting BlueBus (Reply 7):
Things aren't going so well for them either.

 

Um they have been posting RECORD profitability for the last 3-years running, and are forecasting another $125mil+ profit this year.

If that is not 'well' then I don't know what is.

Stock price these days unfortunately does not very well reflect actual corporate performance. Atlas P/E is only about 8. Bargain of a stock.
From the desert to the sea, to all of Southern California
 
Newark727
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 10:26 pm

Quoting glbltrvlr (Reply 8):
This is going to rapidly spin out of control if it hasn't started already. You have to think every other buyer on the order list is reevaluating their options.

But where do they go instead? The only alternatives I can think of would be the 777F (didn't CX spring for a few of these?) or more of the same (used 747 freighters or passenger conversions.)
 
FAEDC3
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 10:46 pm

Quoting LAXintl (Reply 9):
Um they have been posting RECORD profitability for the last 3-years running, and are forecasting another $125mil+ profit this year.

If that is not 'well' then I don't know what is.

Stock price these days unfortunately does not very well reflect actual corporate performance. Atlas P/E is only about 8. Bargain of a stock.

Could be a bargain, but any stock that has lost 34% of its price in the last 6 months (from close to $70 to $45) does sound an alarm in any portfolio. Don't get me wrong, I agree with you on the fact that the stock is a bargain... but the market seems to think otherwise....
 
CX747
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 10:47 pm

Over the past several days a "UPS Rumor" has been mentioned but I have yet to hear any details regarding said rumor. Can anyone elaborate on what the rumor currently consists of?

From an aircraft lover's perspective the above information is actually good. Boeing now has 3 747-8Fs to place with a carrier. It could be with a carrier that is already scheduled to operate the 747-8F or it could be with a NEW carrier that wasn't scheduled to fly 747-8Fs!

Also, if the 747-8 saga proves anything it is that marrying an airframe to one type of engine can be a headache in certain cases.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
babybus
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:00 pm

Quoting BlueBus (Reply 7):
“Though the first airplanes off the line are slightly short of expectations, these early-build models nonetheless will be great airplanes with unparalleled efficiency and low costs.

Hell, look at that for fantastic spin.

Surely the proof is in the eating. The fact that two airlines have got jittery about their new birds is not good at all.

Did BA order these miracle birds? If so what on Earth were they thinking?
and with that..cabin crew, seats for landing please.
 
CX747
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:06 pm

The Cargolux and Atlas Air issues are not one in the same. I know this is airliners.net but let's not try to muddy the waters.

What can be taken from both airlines actions is the desire to operate the type as entire orders have not been cancelled. IF those issues can be mended, then an airline that can deal with them would be wise to step in and get great deal on new aircraft.

One question that hasn't been answered is what will fill the shoes of the three 747-8Fs for Atlas? It would almost behoove them to ask Boeing about the last two 747-400Fs built that currently sit and await initial owners.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
lhrnue
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:18 pm

Quoting CX747 (Reply 14):
The Cargolux and Atlas Air issues are not one in the same.

Where do you know this from? Have both operators confirmed he detailed reason somewhere? Quite contrary both talking about performance as the reason.
 
tower
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:20 pm

I just hope Atlas gets them soon. I want to see them flying into CVG!
 
cosmofly
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:23 pm

I suspect Boeing already found a new home for these birds. It is difficult to assume Boeing would allow cancellation easily after the fact that Boeing forced Evergreen to let Atlas operate the Dreamlifter as compensation for the delay.

The timing of the Atlas news release also seems to align with the CV stunt which could have triggered interests from someone who think they can operate the early 748Fs efficiently. Let's see what Boeing has to say in the coming days. High season is coming fast and Boeing needs time to repaint the birds.

The economy forward is not looking rosy so there may be more reshuffling of orders.
 
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LAXintl
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:24 pm

Quoting FAEDC3 (Reply 11):
but the market seems to think otherwise....

Well the market has dragged down Atlas along with the rest of the airlines simply as it does not have a proper understanding of the airlines business model.

Atlas has virtually zero exposure to fuel prices, and has long term contracts that generate fixed revenues.

If you look at analyst opinions, of the 10 that follow the company, 7 recommend a "buy" or "strong buy", 2 a "hold" and only 1 says "sell". Target price of these analyst is $80 for the stock.

All in all the company has done and continues to do very well financially.

Quoting CX747 (Reply 14):
One question that hasn't been answered is what will fill the shoes of the three 747-8Fs for Atlas?

Atlas stated it is taking 3 later build models instead.

"three more recently built, better-performing 747-8 freighters were moved to the 2011 delivery positions."

Also remember Atlas has has long term options/purchase rights for additional tails that its free to exercise as appropriate.
From the desert to the sea, to all of Southern California
 
JoeCanuck
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:34 pm

I can see quite a difference in the Atlas and Cargolux situations.

Atlas didn't go on record as recently as 3 weeks ago raving about how great the planes are, going as far as calling them game changers, planning a huge party then cancelling it at the last minute.

If Cargolux had acting in a similar manner as Atlas, nobody would have given it a second thought, especially since the same thing happend to the first few 787's.
What the...?
 
col
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Wed Sep 21, 2011 11:54 pm

Damn, just how bad are these test aircraft!

Boeing may need to find homes for 3 to 5 underperforming 747's until PIPs can get them back in line. Obviously the cut throat nature of CV and Atlas business makes it difficult for them to accept these birds as is, or without proper compensation. It looks like they cannot afford the risk of fuel prices against operating these birds. I certainly see some definite relationship between the present decisions of these two carriers, even with the spin. Not good at present, but I am sure they will get placed.
 
redflyer
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 12:03 am

It would appear the Atlas cancellation is related purely to these birds being the first three that were going to be delivered to them, and which had performance issues as the early-builds:

Quote:
Atlas said the three 747-8s it rejected had been set to be the first ones it received, starting next month, before Boeing rescheduled them to early 2012 and pulled forward three others that were in better shape.
http://www.bloomberg.com/news/2011-0...ighters-on-performance-delays.html

It would appear if Atlas wanted better performing birds it really had no choice but to cancel these three, and probably because of the way the contract was written. These three are being swapped with later builds.
My other home is in the sky inside my Piper Cherokee 180.
 
sunrisevalley
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 12:03 am

Quoting LAXintl (Reply 18):
Atlas stated it is taking 3 later build models instead.

Since these would be delivered still in 2011 it would seem to me that it is not an engine performance problem, this is going to take longer to fix. See reply 3.
 
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BoeingVista
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 12:04 am

Quoting cosmofly (Reply 17):
It is difficult to assume Boeing would allow cancellation easily after the fact that Boeing forced Evergreen to let Atlas operate the Dreamlifter as compensation for the delay.

Allow cancellation? Altas air excersized a termination option in the contract as they stated in their press release, there in no ambiguity here they had the right to cancel the order and they did.

Quoting JoeCanuck (Reply 19):
Atlas didn't go on record as recently as 3 weeks ago raving about how great the planes are, going as far as calling them game changers, planning a huge party then cancelling it at the last minute.

If Cargolux had acting in a similar manner as Atlas, nobody would have given it a second thought, especially since the same thing happend to the first few 787's.

Rubbish, if CV had cancelled some would still see have seen the hand of Al Bakka behind it, because of the board change. He is the current industry bogeyman.
BV
 
sstsomeday
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:00 am

Quoting Babybus (Reply 13):
Hell, look at that for fantastic spin.

Surely the proof is in the eating. The fact that two airlines have got jittery about their new birds is not good at all.

Did BA order these miracle birds? If so what on Earth were they thinking?

WIth respect, your post sounds a bit like spin, no? It is not particularly substantive... Are you taking into consideration the acknowledged difference between the first three 8F's and subsequent frames.
I come in peace
 
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Stitch
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:04 am

Quoting SUNRISEVALLEY (Reply 22):
Since these would be delivered still in 2011 it would seem to me that it is not an engine performance problem, this is going to take longer to fix.

Indeed. Or that even with the 2.7% SFC miss, GE themselves are within contracted spec and it's only the overweight condition that is triggering the termination clause for Atlas and the rejection clause for Cargollux.

But if these birds are indeed only a ton or so over OEW, as I believe has been reported, I'd be surprised if that is having a significant impact on performance in and of itself.
 
travelhound
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:11 am

I have just read through the Atlas Air press release to try and decipher what is happening.

Quoting LAXintl (Reply 18):
Also remember Atlas has has long term options/purchase rights for additional tails that its free to exercise as appropriate.

The press release from Atlas is headlined "Atlas Air Worldwide Provides Fleet Update".

The press release states the remaining nine 747-8's will be delivered by the end of year 2013, with five of the 747-8's placed with customers.

Five 747-200's will be retired and 2 747-400BCF will be returned to lessors in the 2014-15 period.

If we add nine new 747-8's and minus the seven 747's that will be retired or returned to lessors than as of today's date Atlas are going to have a surplus of two aircraft.

http://www.atlasair.com/holdings/news-events.asp?Pressid=558

Quoting col (Reply 20):
Damn, just how bad are these test aircraft!

They might not be that bad. It might simply be the case Atlas Air have used the conditions of the contract to help them align their requirements for aircraft against their supply of aircraft. Canceling the first three 747-8's and exercising options as required might have made the most financial sense.

Quoting CX747 (Reply 14):
IF those issues can be mended, then an airline that can deal with them would be wise to step in and get great deal on new aircraft.

It all comes down to who would be in a position to buy them. It also might not be in Boeing's interest to fire sale the aircraft if this impacts on future sales campaigns. It might be better for Boeing to send them to their commercial division and lease them out.

Quoting BoeingVista (Reply 23):
Allow cancellation? Altas air excersized a termination option in the contract as they stated in their press release, there in no ambiguity here they had the right to cancel the order and they did.

At this stage this all we can deduce from their press release!

[Edited 2011-09-21 18:24:21]
 
aviasian
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:14 am

I get the feeling that delay in deliveries, overweight, performance issues ... are all mere scrapegoats for what is generally a softening of the freight market.

IATA's latest forecast released on 20 September indicated that air freight has stagnated since the start of 2011 and the full-year growth forecast for 2011 is a paltry 1.4%. Although growth in 2012 is forecast at 4.2%, no improvement in yield is expected.

KC Sim
 
flythere
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:40 am

Quoting LAXintl (Thread starter):
Atlas Air exercised termination rights for three early build 747-8 Freighters due to delays and performance considerations.

Oh dear, that must cost a lot of headache to Boeing in all these contractual issue after all the engineering ones.
Guess the produced planes had to sit on the tarmac for longer while.
 
embrider
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:45 am

Any reason to truely believe the same issue wont plague the 747-i ?
 
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BoeingVista
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:45 am

Quoting Stitch (Reply 25):

But if these birds are indeed only a ton or so over OEW, as I believe has been reported, I'd be surprised if that is having a significant impact on performance in and of itself.

It is being reported by Scott Hamilton that currently produced frames are 5000 to 6000lbs overweight, that is over Boeings revised plan with the heavy wing, so thats 2.3 to 2.7 tonnes.
BV
 
PlanesNTrains
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:46 am

Quoting lhrnue (Reply 15):
Where do you know this from? Have both operators confirmed he detailed reason somewhere? Quite contrary both talking about performance as the reason.

CargoLux-related articles and rumors are out there, and many point to the hand of AAB at QR as an instigator. It doesn't mean that the aircraft doesn't have issues, but clearly CV wants those that it has on order. In fact, rumor now is that they will take delivery of the first one next week.

Quoting BoeingVista (Reply 23):
ubbish, if CV had cancelled some would still see have seen the hand of Al Bakka behind it, because of the board change. He is the current industry bogeyman.

Rubbish? It's pretty much accepted that he is behind the CV circus. Again, it doesn't mean that the aircraft doesn't have issues, but CV does not appear to be cancelling their order.

-Dave
-Dave
 
col
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 1:59 am

Quoting Stitch (Reply 25):
Indeed. Or that even with the 2.7% SFC miss, GE themselves are within contracted spec and it's only the overweight condition that is triggering the termination clause for Atlas and the rejection clause for Cargollux.

But if these birds are indeed only a ton or so over OEW, as I believe has been reported, I'd be surprised if that is having a significant impact on performance in and of itself.

Stitch, are we dealing with two separate misses here? I am not sure of the line sequence of the 5 units being delayed/canx, but if they are the first 5, could they be missing by more than 2.7%. Is 2.7% the later birds, which are in spec margins?

Also, I do take on board the point of the softening market, which could give people an out, which may make it difficult for Boeing to place these 3 to 5 units.
 
mdword1959
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:14 am

Quoting BoeingVista (Reply 30):
Scott Hamilton

Hamilton would be a far more credible source of information and "analysis" if his only significant paying client wasn't reportedly the North American subsidiary of a certain European OEM.  

[Edited 2011-09-21 19:25:46]
 
JoeCanuck
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:19 am

Quoting BoeingVista (Reply 23):

Rubbish, if CV had cancelled some would still see have seen the hand of Al Bakka behind it, because of the board change. He is the current industry bogeyman.

Call it rubbish if you like...I can only speak for myself but it was the manner of the postponement that make me think Al Baker had a hand in it, not the postponement itself. As it turns out, it's looking more and more like I, and many others, were right. If the bogeyman label fits...

Quoting BoeingVista (Reply 30):

It is being reported by Scott Hamilton that currently produced frames are 5000 to 6000lbs overweight, that is over Boeings revised plan with the heavy wing, so thats 2.3 to 2.7 tonnes.

...which is not exactly the latest news since it has been known for quite some time.
What the...?
 
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flylku
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:23 am

Performance is an interesting thing. The aircraft can be compared to itself, in which case it has initially missed expectations, or it can be compared to alternatives, in which case it is superior by most measures to nearly all options.

Could it be they are forecasting slower growth and looking for an excuse for an out?
...are we there yet?
 
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par13del
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:32 am

Quoting BoeingVista (Reply 4):
The GE fixes wont be implemented until first engine overhaul which will be in the 2016-2017 time scale

In the Cargolux thread a poster mentioned GE having a PIP for 2013, that was not challenged so is your 2016-2017 something unrelated to the pending PIP?

Quoting BoeingVista (Reply 23):
Altas air excersized a termination option in the contract as they stated in their press release, there in no ambiguity here they had the right to cancel the order and they did.

Which all carriers have built into their contracts, hence the reason why Atlas action is not generating the same responses.
Now are you saying there is some ambiguity in the action of Cargolux?
 
PlanesNTrains
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:44 am

Quoting par13del (Reply 36):
ting BoeingVista (Reply 23):
Altas air excersized a termination option in the contract as they stated in their press release, there in no ambiguity here they had the right to cancel the order and they did.

Which all carriers have built into their contracts, hence the reason why Atlas action is not generating the same responses.
Now are you saying there is some ambiguity in the action of Cargolux?

BV was replying to this:

Quoting cosmofly (Reply 17):
It is difficult to assume Boeing would allow cancellation easily after the fact that Boeing forced Evergreen to let Atlas operate the Dreamlifter as compensation for the delay.

Basically, he's saying that it wasn't up to Boeing to allow Atlas to cancel, that instead Atlas had the right as per their contract. It really is a separate point from CV.

-Dave
-Dave
 
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Stitch
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:46 am

Even with the cancellation of their first three frames, Boeing was still able to accommodate Atlas with three deliveries this year, so if the cargo market is going soft, companies that can defer or walk away from their freighter commitments (be it 747-8F, 777F or A330-200F) now can save hundreds of millions in capital / avoid hundreds of millions in new debt, which should keep the shareholders happy.

At worse, the OEMs can lease the frames until they find customers willing to buy.
 
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BoeingVista
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 2:58 am

Quoting par13del (Reply 36):
Which all carriers have built into their contracts, hence the reason why Atlas action is not generating the same responses.
Now are you saying there is some ambiguity in the action of Cargolux?

Nope. Others are saying that.

Quoting par13del (Reply 36):

In the Cargolux thread a poster mentioned GE having a PIP for 2013, that was not challenged so is your 2016-2017 something unrelated to the pending PIP?

GE say that the PIP will be implemented at first engine overhaul, they put this at between 5 and 7 years of engine life. It may all work out better for everyone if GE arrange a swap out when the PIP becomes available in 2013.
BV
 
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mariner
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 3:14 am

Quoting PlanesNTrains (Reply 31):
It's pretty much accepted that he is behind the CV circus.

He may be (or his team), but I don't assign any ulterior motives to that.

Quoting PlanesNTrains (Reply 31):
CargoLux-related articles and rumors are out there, and many point to the hand of AAB at QR as an instigator. It doesn't mean that the aircraft doesn't have issues, but clearly CV wants those that it has on order.

I don't think it is about aircraft issues. I think it is about contract issues.

I don't think anyone should be surprised that there may be sharper (or tougher) contract minds at work at Cargolux since last week - that what may have been acceptable to the previous Board is not acceptable to this new Board.

mariner
aeternum nauta
 
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par13del
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 3:15 am

Quoting BoeingVista (Reply 39):
It may all work out better for everyone if GE arrange a swap out when the PIP becomes available in 2013.

I do not know the details but I would assume that carriers are probably offered a choice since the engines are not up to the specs promised, X dollars in compensation thru normal overhaul time or Y dollars in compensation until the PIP is available. Depending on how "bad" the engine issue is, I could see those carriers who need the full range of the a/c opting to have the engines replaced ASAP as the operating effects of the shortfall may be greater.

Will be interesting to see what happens with the early frames, if they are more efficient than existing 747 cargo a/c a case can be made for replacement if the proper terms and a financial case can be made, keeping them in the yard benefits no one.
 
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 3:27 am

Quoting ikramerica (Reply 3):
This might add to the UPS rumors. If UPS can take the 5 early build birds at a 744F price or below, they might just do so. Their business model is a bit different and they could deal with the performance issues until the GE fixes are implemented in 2013.

It'll be interesting to see if this is what ends up happening. UPS took some of the last-build 747-400Fs presumably at a good price, and unfortunately one of those frames was lost to an on-board fire (RIP).

Quoting redflyer (Reply 21):
It would appear the Atlas cancellation is related purely to these birds being the first three that were going to be delivered to them, and which had performance issues as the early-builds:

Quote:
Atlas said the three 747-8s it rejected had been set to be the first ones it received, starting next month, before Boeing rescheduled them to early 2012 and pulled forward three others that were in better shape.
http://www.bloomberg.com/news/2011-0...ighters-on-performance-delays.html

It would appear if Atlas wanted better performing birds it really had no choice but to cancel these three, and probably because of the way the contract was written. These three are being swapped with later builds.

Yes, but significantly as the link points out, this means Atlas will receive 9 instead of 12 frames. Given the current economic circumstances, good news for Atlas, bad news for Boeing, maybe good news for UPS.

Quoting BoeingVista (Reply 23):
Allow cancellation? Altas air excersized a termination option in the contract as they stated in their press release, there in no ambiguity here they had the right to cancel the order and they did.

        

Some here seem to have a hard time saying that Boeing certainly has three white-tail 747-8Fs from Atlas on their hands now, and quite likely has two more from Cargolux.

As much as we talked here on a.net about airlines rejecting A380s, now it's actually happening with 747-8Fs, and no one was predicting this even a week ago. Quite a noteworthy event, IMHO.
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ikramerica
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 3:33 am

Quoting Revelation (Reply 42):
As much as we talked here on a.net about airlines rejecting A380s, now it's actually happening with 747-8Fs, and no one was predicting this even a week ago. Quite a noteworthy event, IMHO.

True. It's funny how these airlines were tolerant of the delays in the program during the economic downturn, but finally now that the planes are ready for delivery, and the economy still hasn't improved, the carriers are finding creative ways to cancel them.
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PlanesNTrains
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 3:36 am

Quoting mariner (Reply 40):
He may be (or his team), but I don't assign any ulterior motives to that.

It will make an interesting story if it all ever comes out one day.

Quoting mariner (Reply 40):
I don't think anyone should be surprised that there may be sharper (or tougher) contract minds at work at Cargolux since last week - that what may have been acceptable to the previous Board is not acceptable to this new Board

Sure, but fortunately it sounds like it is resolving itself.

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tdscanuck
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 3:48 am

Quoting BoeingVista (Reply 4):
The GE fixes wont be implemented until first engine overhaul which will be in the 2016-2017 time scale

That's when the PIP goes into the initial delivery engines...there's nothing preventing carriers from strapping newly built PIP engines onto their aircraft as soon as the PIP engines become available ~2013.

Quoting embrider (Reply 29):

Any reason to truely believe the same issue wont plague the 747-i ?

Lufthansa has already come out and said the better-than-expected aerodynamics of the 747-8I (which are different than the 747-8F) compensate for the weight/engine side.

Tom.
 
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LAXintl
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 4:10 am

Quoting aviasian (Reply 27):
I get the feeling that delay in deliveries, overweight, performance issues ... are all mere scrapegoats for what is generally a softening of the freight market.
Quoting Revelation (Reply 42):
Yes, but significantly as the link points out, this means Atlas will receive 9 instead of 12 frames. Given the current economic circumstances, good news for Atlas, bad news for Boeing, maybe good news for UPS.
Quoting ikramerica (Reply 43):
and the economy still hasn't improved, the carriers are finding creative ways to cancel them.

You guys fail to note, Atlas is not reducing it deliveries in 2011 or 2012 arguably the period of greatest global economic uncertainty, but instead it has swapped 3 later build tails to still give it the same exact planned number deliveries over both years (3 and 4 respectively). Atlas also publicly confirms it has placed 5 of the first tails already with customers (BA & Panalpina).
All the cancellations do is drop tail end deliveries in 2013-2014 off the order book, which might very well be back filled with the options and purchase rights the carrier holds for the model anyhow.

Also remember unlike Cargolux, Atlas does not have day to day exposure to fuel cost, nor does it bear the economic burden of beating on doors and filling planes with cargo tonnage. Instead its a wet-lease operator with long term agreement with parties such as the 20-year one with DHL.
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aircal62
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 4:17 am

an aside. When Boeing was doing test flying out of the former Norton AFB (SBD) there was one evening as I recall that the 747-8F took off from SBD and flew all of 15 miles to ONT. So happens that UPS has a hub located at ONT. I am sure nothing to it other than another test flight, but interesting in light of the UPS rumors.
 
travelhound
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 4:25 am

Quoting LAXintl (Reply 46):
Atlas does not have day to day exposure to fuel cost, nor does it bear the economic burden of beating on doors and filling planes with cargo tonnage

Good point .... and it just might be the case with the Atlas business model and the contracts it has with its clients the performance shortfall of the 747 might be more material to the bottom line, than it would be for another carrier.
 
wjcandee
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RE: Atlas Air Cancels 3 747-8F Due Delay, Performance

Thu Sep 22, 2011 4:35 am

I read the Atlas Air press release to mean one thing, pure and simple: they weren't able to place 6 aircraft with carriers in 2011, only 3, and therefore opted out of the three that they hadn't placed. Had they placed those aircraft, and needed them now, they wouldn't be exercising the option. Perfect or not, those aircraft are more efficient than a 744. Easy enough to compensate Atlas for the performance (i.e. fuel usage) difference via a reduction in purchase price, which is probably what they would have demanded and received if they had a use for the aircraft.

[Edited 2011-09-21 21:36:08]

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