Moderators: richierich, ua900, PanAm_DC10, hOMSaR

 
PPVRA
Posts: 8535
Joined: Fri Nov 12, 2004 7:48 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Wed Mar 06, 2019 8:12 pm

tommy1808 wrote:
bigjku wrote:
But the two things do very different things. The first adds profitability and margin to an entities operation. The second just hands them money on non-commercial terms.


One is subsidizing increased competition, the other bolsters existing companies/projects. As a tax payer I know what I rather see my money in, the one that drives down prices, which is the RLI way.


Reducing taxes increases profitability outlook, which increases the chance of any number of projects to be given the “go ahead”. That has an effect of competition, too.

Also, the A380 sucked up an enormous amount of engineering resources and time at Airbus who could instead have built a different aircraft that would have had a meaningful impact on the industry. In terms of competition, too, but in many other ways as well.

This has been a colossal misallocation of capital with negative implications for Airbus (despite being off the hook from a purely financial perspective), Europe, and in this globalized planet, the whole planet loses.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
tommy1808
Posts: 13546
Joined: Thu Nov 21, 2013 3:24 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 07, 2019 6:09 am

PPVRA wrote:
tommy1808 wrote:
bigjku wrote:
But the two things do very different things. The first adds profitability and margin to an entities operation. The second just hands them money on non-commercial terms.


One is subsidizing increased competition, the other bolsters existing companies/projects. As a tax payer I know what I rather see my money in, the one that drives down prices, which is the RLI way.


Reducing taxes increases profitability outlook, which increases the chance of any number of projects to be given the “go ahead”. That has an effect of competition, too.


Yes, you can design it that way, but that is not how it is done, is it? Iirc the 777x for example had its ATO half a year before Boeing decided which states Tax payers get to stuff its bottom line....

Also, the A380 sucked up an enormous amount of engineering resources and time at Airbus who could instead have built a different aircraft that would have had a meaningful impact on the industry. In terms of competition, too, but in many other ways as well.

This has been a colossal misallocation of capital with negative implications for Airbus (despite being off the hook from a purely financial perspective), Europe, and in this globalized planet, the whole planet loses.


Oh, i agree. Airbus should have canned it when jet Fuel prices exploded in 2003, because at that point the not-all-that-great fuel burn of the shrink they made first was a fringy case, but i guess they didn´t see 2008 coming either. It plunged right into a decade of airline playing it safe.......

Imagine how much they could have done with A380 engineering teams able to work on the A330/A320 family improvements. .......

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
Odan
Posts: 26
Joined: Fri Jul 27, 2018 8:34 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 07, 2019 9:08 pm

So, they tried and they failed. In the process they generated some 300x200Million of economic activity. That money is easily earned in taxes and social benefits.

Regards
 
User avatar
casinterest
Posts: 11873
Joined: Sat Feb 12, 2005 5:30 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 07, 2019 9:21 pm

Odan wrote:
So, they tried and they failed. In the process they generated some 300x200Million of economic activity. That money is easily earned in taxes and social benefits.

Regards



That money came from a fund that was paid for by taxes and social benefits, and it put the loss on the creditors instead of the company. Airbus was able to disrupt markets for an economically flawed plan and they don't have to pay for the ramifications of it all.
Where ever you go, there you are.
 
User avatar
Dutchy
Posts: 11906
Joined: Sat Nov 03, 2007 1:25 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 07, 2019 9:49 pm

casinterest wrote:
Odan wrote:
So, they tried and they failed. In the process they generated some 300x200Million of economic activity. That money is easily earned in taxes and social benefits.

Regards



That money came from a fund that was paid for by taxes and social benefits, and it put the loss on the creditors instead of the company. Airbus was able to disrupt markets for an economically flawed plan and they don't have to pay for the ramifications of it all.


Do you evidence that Airbus didn't have had any looses.
Many happy landings, greetings from The Netherlands!
 
User avatar
casinterest
Posts: 11873
Joined: Sat Feb 12, 2005 5:30 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 07, 2019 9:52 pm

Dutchy wrote:
casinterest wrote:
Odan wrote:
So, they tried and they failed. In the process they generated some 300x200Million of economic activity. That money is easily earned in taxes and social benefits.

Regards



That money came from a fund that was paid for by taxes and social benefits, and it put the loss on the creditors instead of the company. Airbus was able to disrupt markets for an economically flawed plan and they don't have to pay for the ramifications of it all.


Do you evidence that Airbus didn't have had any looses.


I said "of it all".
And the worst part is they can still pay royalties out on other products with no effect form the loss on this one. Even though this product helped them get trained engineers, equipment, training, and customers.
Where ever you go, there you are.
 
User avatar
SheikhDjibouti
Posts: 2289
Joined: Sat Sep 30, 2017 4:59 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 07, 2019 10:51 pm

noviorbis77 wrote:
So the incomptence of Airbus means UK taxpayers are paying for this flop?

Not good enough. Airbus needs to pay.

Already done it mate.

The brilliance of Airbus means UK taxpayers made a profit on previous RLI deals.

Is that "good enough" for you?

BTW - what about European taxpayers suffering due to Rolls-Royce incompetence?

Or does the door only swing one way for you?
No need to answer that
Nothing to see here; move along please.
 
mwhcvt
Posts: 1007
Joined: Sun Oct 05, 2008 2:01 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sat Mar 09, 2019 2:51 am

It was an investment by the state, one that proved bad, however other investments the state has made into airbus over the years have been repaid many times over, case in point the UK government of the 80s put up money for the then newly proposed A320 family (I’m sure other home governments did too) IIRC that investment was based around 500 frames being produced, but those fix payments are still being repaid on each and every frame delivered, I know a few years ago airbus negotiated a per frame fee reduction from the UK but still some is paid
Must think up a new one soon, slow moving brain trying to get into gear ;)
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sat Mar 09, 2019 3:00 am

mwhcvt wrote:
It was an investment by the state, one that proved bad, however other investments the state has made into airbus over the years have been repaid many times over, case in point the UK government of the 80s put up money for the then newly proposed A320 family (I’m sure other home governments did too) IIRC that investment was based around 500 frames being produced, but those fix payments are still being repaid on each and every frame delivered, I know a few years ago airbus negotiated a per frame fee reduction from the UK but still some is paid


So is it an investment or not? Why on the ones you win would you take less? Because now I am confused. On the ones that go bad the state takes a loss. On the ones (one?) that went well eventually the state takes less?

Seems a big one sided doesn’t it?

And again if we want to just say on the whole money has been made why do RLI at all? Just issue bonds which would be covered by everything airbus does and thus insulate the state from losses?
 
User avatar
SheikhDjibouti
Posts: 2289
Joined: Sat Sep 30, 2017 4:59 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sat Mar 09, 2019 11:45 am

bigjku wrote:
So is it an investment or not? Why on the ones you win would you take less? Because now I am confused. On the ones that go bad the state takes a loss. On the ones (one?) that went well eventually the state takes less?

Seems a big one sided doesn’t it?

And again if we want to just say on the whole money has been made why do RLI at all? Just issue bonds which would be covered by everything airbus does and thus insulate the state from losses?

Because - and I realise this could be an alien concept to you - the "investment" isn't purely financial. It is also an investment in people, and it is the state's job to look after it's people.

Why on the ones you win would you take less?
Governments are not in the business of making a profit; that is not their raison d'être. (unlike a bank)
I am 100% certain that any extra re-payments they elected to forego, were exchanged for something called "goodwill". Or, just as likely, something more tangible.

Supposing I lend my brother $10,000 to set himself up with a burger cart.
If it goes well he will pay it all back, and more.
If it goes badly, I could no doubt insist he pays it all, if necessary taking him to court. But his kids are my family too, and ultimately I would lose out.

Airbus' own "children" are their employees; why would I want to put the squeeze on them? A bank would, but RLI helps avoid this scenario.

why do RLI at all?
You will need to scroll back upthread to read where I posted the UK Government's reasoning behind RLI. It is very simple and answers your question.
You may also recognise the quote from the last time you asked the question. Does it not show up in your browser? Am I on your ignore list? :wave:

Forget the $$$. It is all about the people.
Nothing to see here; move along please.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sat Mar 09, 2019 1:17 pm

SheikhDjibouti wrote:
bigjku wrote:
So is it an investment or not? Why on the ones you win would you take less? Because now I am confused. On the ones that go bad the state takes a loss. On the ones (one?) that went well eventually the state takes less?

Seems a big one sided doesn’t it?

And again if we want to just say on the whole money has been made why do RLI at all? Just issue bonds which would be covered by everything airbus does and thus insulate the state from losses?

Because - and I realise this could be an alien concept to you - the "investment" isn't purely financial. It is also an investment in people, and it is the state's job to look after it's people.

Why on the ones you win would you take less?
Governments are not in the business of making a profit; that is not their raison d'être. (unlike a bank)
I am 100% certain that any extra re-payments they elected to forego, were exchanged for something called "goodwill". Or, just as likely, something more tangible.

Supposing I lend my brother $10,000 to set himself up with a burger cart.
If it goes well he will pay it all back, and more.
If it goes badly, I could no doubt insist he pays it all, if necessary taking him to court. But his kids are my family too, and ultimately I would lose out.

Airbus' own "children" are their employees; why would I want to put the squeeze on them? A bank would, but RLI helps avoid this scenario.

why do RLI at all?
You will need to scroll back upthread to read where I posted the UK Government's reasoning behind RLI. It is very simple and answers your question.
You may also recognise the quote from the last time you asked the question. Does it not show up in your browser? Am I on your ignore list? :wave:

Forget the $$$. It is all about the people.


I don’t ignore anyone (and frankly doing so seems childish anyway) and read your answer before. And yes it provides and explaination that is in some parts true and some parts false.

Frankly we are in agreement on the why. I fully get that it’s about people and jobs. It is what it is. It would be significantly more honest were the parties engaging it to say we do this to help Airbus compete and keep jobs here. Deal with it.

What I object to is the idea that there is a market deficiency. Airbus could very well borrow the necessary funds in bonds at a very competitive interest rate (particularly given that most investors will look at it as if you are loaning money to France or Germany for the most part). They would have little trouble doing this. There is no market deficiency. After all RLI doesn’t finance everything so on the A380 Airbus got the other $15-20 billion from a combination of ongoing revenue and commercial markets right?

I just think everyone should be honest about what it is. It’s cut rate financing. I don’t agree with it but nations will do what they do. What I find laughable is the public defense that it’s correcting a market deficiency (it’s not) and that it’s done on commercial terms. And I think we agree on that too. After all you said a bank wouldn’t renegotiate the royalty.
 
User avatar
SheikhDjibouti
Posts: 2289
Joined: Sat Sep 30, 2017 4:59 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sat Mar 09, 2019 1:48 pm

bigjku wrote:
I don’t ignore anyone (and frankly doing so seems childish anyway) and read your answer before.

Genuinely glad to hear it. I read what everyone has to say on things, good and bad. And then I will choose which ones to respond to. It sounds like you do the same. :bigthumbsup:

bigjku wrote:
Frankly we are in agreement on the why. I fully get that it’s about people and jobs. It is what it is. It would be significantly more honest were the parties engaging it to say we do this to help Airbus compete and keep jobs here.
Agreed, and I'm sure politicians in various countries have made statements saying exactly that. If that has been less than obvious here on a.net, I apologise.

bigjku wrote:
What I object to is the idea that there is a market deficiency. Airbus could very well borrow the necessary funds in bonds at a very competitive interest rate (particularly given that most investors will look at it as if you are loaning money to France or Germany for the most part). They would have little trouble doing this. There is no market deficiency. After all RLI doesn’t finance everything so on the A380 Airbus got the other $15-20 billion from a combination of ongoing revenue and commercial markets right?

I just think everyone should be honest about what it is. It’s cut rate financing. I don’t agree with it but nations will do what they do. What I find laughable is the public defense that it’s correcting a market deficiency (it’s not) and that it’s done on commercial terms. And I think we agree on that too. After all you said a bank wouldn’t renegotiate the royalty.

It is the last bit that nails it.
"A bank wouldn’t renegotiate the royalty" because it is only interested in $$$
However a Government can renegotiate the royalty because Airbus can offer them other things.
Hence my statement;
I am 100% certain that any extra re-payments they elected to forego, were exchanged for something called "goodwill". Or, just as likely, something more tangible.

Be assured that these alternative deals still cost Airbus money, levelling up the playing field.

For instance, to keep the various governments happy, they ended up with a fleet of Ro-ro carriers to transport wing sections and other parts from all around Europe.
Itinéraire à Grand Gabarit

Image

Image

Thx wikipedia
Nothing to see here; move along please.
 
PPVRA
Posts: 8535
Joined: Fri Nov 12, 2004 7:48 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sun Mar 10, 2019 12:57 am

It is the last bit that nails it.
"A bank wouldn’t renegotiate the royalty" because it is only interested in $$$
However a Government can renegotiate the royalty because Airbus can offer them other things.
Hence my statement;


The government isn’t interested in commercial terms. They’re interested in subsidizing.

They want to drop money in the right pockets and whether it achieves a sustainable goal or not, they do not care. It’s about getting elected.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
tommy1808
Posts: 13546
Joined: Thu Nov 21, 2013 3:24 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Sun Mar 10, 2019 7:16 am

bigjku wrote:
mwhcvt wrote:
It was an investment by the state, one that proved bad, however other investments the state has made into airbus over the years have been repaid many times over, case in point the UK government of the 80s put up money for the then newly proposed A320 family (I’m sure other home governments did too) IIRC that investment was based around 500 frames being produced, but those fix payments are still being repaid on each and every frame delivered, I know a few years ago airbus negotiated a per frame fee reduction from the UK but still some is paid


So is it an investment or not? Why on the ones you win would you take less? Because now I am confused. On the ones that go bad the state takes a loss. On the ones (one?) that went well eventually the state takes less?

Seems a big one sided doesn’t it?


Less royalties per frame is not the same as less royalties. Airbus is cutting costs to not just make more profit, but also to sell more aircraft. More airceaft at lower royalties per frame may end up being a higher sum total in royalties.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
B777LRF
Posts: 2715
Joined: Sun Nov 02, 2008 4:23 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Mon Mar 11, 2019 9:11 am

PPVRA wrote:
Subsidizing a product reduces the economic viability of competitors. That’s a negative all around.


That would be correct if only one of a number of manufacturers had that advantage. As it is, not a single modern airliner has been launched without some sort of subsidy.
Signature. You just read one.
 
PPVRA
Posts: 8535
Joined: Fri Nov 12, 2004 7:48 am

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Tue Mar 19, 2019 8:07 pm

B777LRF wrote:
PPVRA wrote:
Subsidizing a product reduces the economic viability of competitors. That’s a negative all around.


That would be correct if only one of a number of manufacturers had that advantage. As it is, not a single modern airliner has been launched without some sort of subsidy.


Unfortunately, it also means that non-subsidized competitors are going to be kept away. That means the chances of breaking the duopoly are also a lot smaller.

Subsidies raise barriers of entry to the politically well connected.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
tommy1808
Posts: 13546
Joined: Thu Nov 21, 2013 3:24 pm

Re: A380 “state-sponsored” in the end? Credits might get never paid back...

Thu Mar 21, 2019 12:51 am

PPVRA wrote:
B777LRF wrote:
PPVRA wrote:
Subsidizing a product reduces the economic viability of competitors. That’s a negative all around.


That would be correct if only one of a number of manufacturers had that advantage. As it is, not a single modern airliner has been launched without some sort of subsidy.


Unfortunately, it also means that non-subsidized competitors are going to be kept away. That means the chances of breaking the duopoly are also a lot smaller.

Subsidies raise barriers of entry to the politically well connected.


While I can see how a new comer would have trouble using tax credits a decade or more down the line, I don't see why, let's say a Dornier reboot, a new entrant won't be able to get an RLI.

Best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6

Who is online

Users browsing this forum: Dutchy, Kent350787, olle, System07 and 42 guests

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos