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vhtje
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Re: Airbus Is in Talks With British Airways on More A380s

Mon Jun 04, 2018 2:50 pm

Flyglobal wrote:
WW wanted a price below Emirates.


How do you know that? Do you have a source for that claim?
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Revelation
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Re: Airbus Is in Talks With British Airways on More A380s

Mon Jun 04, 2018 5:08 pm

Taxi645 wrote:
All not very important in the bigger scheme of things.

If you want to take that tact, BA deciding to buy or not buy 10 A380s also is not important in the great scheme of things either, yet here we are with 10 pages and 450+ posts.
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Re: Airbus Is in Talks With British Airways on More A380s

Mon Jun 04, 2018 5:40 pm

Revelation wrote:
Taxi645 wrote:
All not very important in the bigger scheme of things.

If you want to take that tact, BA deciding to buy or not buy 10 A380s also is not important in the great scheme of things either, yet here we are with 10 pages and 450+ posts.


I did not exclude a possible BA order in my post. ;)

Yes that's part of the nature of A-net, for some reason seeing a purpose for discussing the same arguments over and over again.
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N14AZ
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 10:43 am

LGWGate49 wrote:
Appears IAG have pulled out of talks with Airbus re more A380s... sigh...

http://www.travelweekly.co.uk/articles/ ... a380-talks

... and now CEO Walsh is trying to flirt with Airbus again.
"But if Airbus has an interesting offer to make, they have my cell number," Willie Walsh jokes


Some (more specific) statements made yesterday (sorry, I used google translator, my French, c'est une catastophe...:
And Willie Walsh is very satisfied: "we are probably one of the few companies to like the A380, "he says. "It's a tough plane but it's perfect for Heathrow.

He maintains that he sees quite the place for about twenty aircraft in the fleet of the British company, but it has been several months that he asks Airbus to make efforts on prices - he called them " unacceptable "at the beginning of the year and declared that he was waiting for a" real proposal "from the aircraft manufacturer. Since then, he announced that the negotiations were broken.

British Airways is also considering the possibility of acquiring second-hand aircraft. An option that does not consider lightly however. "All A380s have very different configurations and reconfiguring a British Airways A380 would be very expensive, between seats, galleys, systems, everything would be redone. It would cost us $ 30 million. "


Source: https://www.journal-aviation.com/actual ... irbus-a380

Dear Airbus, could you please give him eight A380s for free? This endless back-and-forth is distracting the civil aviation forum from more fruitful discussions (B757neo, cyrstall balls... )
 
uta999
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 11:40 am

Are BA not a big enough customer for Airbus to offer a 20-year lease on 10-20 new A380s? The more they lease, the better the deal.

The longer AB wait, the more out of date the A380 becomes, to the point where they either have to offer a NEO upgrade, or BA go with the 777-X instead.
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LewisNEO
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 11:40 am

N14AZ wrote:
LGWGate49 wrote:
Appears IAG have pulled out of talks with Airbus re more A380s... sigh...

http://www.travelweekly.co.uk/articles/ ... a380-talks

... and now CEO Walsh is trying to flirt with Airbus again.
"But if Airbus has an interesting offer to make, they have my cell number," Willie Walsh jokes


Some (more specific) statements made yesterday (sorry, I used google translator, my French, c'est une catastophe...:
And Willie Walsh is very satisfied: "we are probably one of the few companies to like the A380, "he says. "It's a tough plane but it's perfect for Heathrow.

He maintains that he sees quite the place for about twenty aircraft in the fleet of the British company, but it has been several months that he asks Airbus to make efforts on prices - he called them " unacceptable "at the beginning of the year and declared that he was waiting for a" real proposal "from the aircraft manufacturer. Since then, he announced that the negotiations were broken.

British Airways is also considering the possibility of acquiring second-hand aircraft. An option that does not consider lightly however. "All A380s have very different configurations and reconfiguring a British Airways A380 would be very expensive, between seats, galleys, systems, everything would be redone. It would cost us $ 30 million. "


Source: https://www.journal-aviation.com/actual ... irbus-a380

Dear Airbus, could you please give him eight A380s for free? This endless back-and-forth is distracting the civil aviation forum from more fruitful discussions (B757neo, cyrstall balls... )


Hahaha it almost sounds like that. It wouln't surprise me if somewhere in some office there is a (low profile) talk about the A380s going on. The ones that'l get free on the second hand market are till now only the very early birds that won't give the optimal efficiency. It sounds more like a strategic game, but this one takes really long before the finish is reached. We'll see, maybe there is more news in a couple of weeks.
B757neo, sounds great btw, maybe an item for a new topic? ;-)
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 11:43 am

IAG can have EK pricing, if they take an EK configuration, let Airbus package the deal so it's difficult to compare with others, and don't boast about THE price (especially to EK & SQ).
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 12:13 pm

In these monopolist negotiations it is always a cat & mouse play.
The only thing you can do is state you really don't need any, but still make sure they hope.
Announcing it works & you are planning more, boosts the price..

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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 12:21 pm

LewisNEO wrote:
B757neo, sounds great btw, maybe an item for a new topic? ;-)

Another? :roll: :lol:
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 12:32 pm

Maybe they could just make an offer on some cheap A330-800 Neo planes and have them welded on top of their A350's ? Yeah that'll do it ! :lol:
 
Tedd
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 12:43 pm

uta999 wrote:
Are BA not a big enough customer for Airbus to offer a 20-year lease on 10-20 new A380s? The more they lease, the better the deal.

The longer AB wait, the more out of date the A380 becomes, to the point where they either have to offer a NEO upgrade, or BA go with the 777-X instead.


Good point made. I`m of the opinion this deal should have been done months ago....a bit more give & take on both sides
was needed obviously, & surely if this had happened both could have been satisfied? I think AB needs to bend a little more,
it could lead to more profitable business in the future with WW.
 
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N14AZ
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 1:03 pm

uta999 wrote:
The longer AB wait, the more out of date the A380 becomes, to the point where they either have to offer a NEO upgrade, or BA go with the 777-X instead.

:checkmark:

keesje wrote:
In these monopolist negotiations it is always a cat & mouse play.

That's a good description of what has been going on for years now...

LewisNEO wrote:
N14AZ wrote:
Dear Airbus, could you please give him eight A380s for free? This endless back-and-forth is distracting the civil aviation forum from more fruitful discussions (B757neo, cyrstall balls... )

B757neo, sounds great btw, maybe an item for a new topic? ;-)

I don't know, it's always a risk to start a thread about a new topic that has never ever been discussed before... ;-)

PS.: by the way, I made a mistake, I didn't mean "crystall balls" but snow globes.... ;-)
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 1:20 pm

Tedd wrote:
uta999 wrote:
Are BA not a big enough customer for Airbus to offer a 20-year lease on 10-20 new A380s? The more they lease, the better the deal.

The longer AB wait, the more out of date the A380 becomes, to the point where they either have to offer a NEO upgrade, or BA go with the 777-X instead.


Good point made. I`m of the opinion this deal should have been done months ago....a bit more give & take on both sides
was needed obviously, & surely if this had happened both could have been satisfied? I think AB needs to bend a little more,
it could lead to more profitable business in the future with WW.


We know Airbus runs the line to produce A380’s at a loss. Taking on an incremental order doesn’t make a lot of sense. It just means losing more money.

The A380 is such a strange situation for Airbus. You want to sell more but until you can find enough orders to increase your rate it doesn’t make you more money. If BA were part of a group of airlines ordering 100 of the things and rate could double it would be a done deal. Selling them 10 more in isolation doesn’t really help Airbus though.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 1:26 pm

bigjku wrote:
We know Airbus runs the line to produce A380’s at a loss. Taking on an incremental order doesn’t make a lot of sense. It just means losing more money.


It also means that they will get to sell maintenance for a few more units for years to come.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 1:55 pm

BA should have a trip to Boeing's sales team and discuss getting 748i's.....that'll bring the A380 price down !
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 1:58 pm

Personally I think the biggest issue with the A380 are it's engines and space efficiency.

The 350 and 787 both operate with next gen engines and greater seating density, particularly in Economy.
The 380 engines have got some PIPs but still way down.

Airbus has projects to fix density (11 across in Y and smaller main stairs) plus possibly their pods for lower deck toilets/ lounges.

But the engines are more difficult. I certainly can't see another dual choice being offered for such a small volume.

Best chance as I see it is for Airbus to force some form of commonality between the next 350 engine (call it 350neo) and the 380, so for a 2025+ introduction, possibly with a minor stretch and weight loss.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 2:13 pm

I like this thread, it reminds me of the ´No EK Order for 787s or 350s at Dubai thread as per STC ´ we had a wee while back ……..

I had my own opinion on that one, wonder what surprises Farnborough will bring us this year...……??
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Flyglobal
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 2:28 pm

As I said before: The lowest Price for A380 is the one which Emirates pays. However: there are other issues between BA and Airbus to solve and that are the delays of the NEO.

I would expect that they finally will make a deal.

For next gen A380 (I believe that there will be one) - we may see a small Group of Airlines defining and agreeing the upgrade - incl. new engines and all may pay the same Price. A similar deal like for Military aircraft. (F35- just way smaller)

Flyglobal
Last edited by Flyglobal on Tue Jul 03, 2018 2:30 pm, edited 1 time in total.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 2:29 pm

cougar15 wrote:
I had my own opinion on that one, wonder what surprises Farnborough will bring us this year...……??

I guess there will be no news regarding BA's additional A380s at Farnborough. CEO Walsh just started to seduce Airbus again. I never was a womanizer (if you allow me the comparison) but I think there is not enough time from "you have my cell number" (see quote above) to ..... peeeeeep, well, you know what I mean ... , meaning to concluding a MoU, let alone a firm order at Farnborough in two weeks.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 3:38 pm

How many A380 orders are still unfilled?
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 4:52 pm

N14AZ wrote:
LewisNEO wrote:
N14AZ wrote:
Dear Airbus, could you please give him eight A380s for free? This endless back-and-forth is distracting the civil aviation forum from more fruitful discussions (B757neo, cyrstall balls... )

B757neo, sounds great btw, maybe an item for a new topic? ;-)

I don't know, it's always a risk to start a thread about a new topic that has never ever been discussed before... ;-)


Absolutely not, unless it includes discussion on fish hauling capacity....

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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 5:08 pm

N14AZ wrote:
cougar15 wrote:
I had my own opinion on that one, wonder what surprises Farnborough will bring us this year...……??

I guess there will be no news regarding BA's additional A380s at Farnborough. CEO Walsh just started to seduce Airbus again. I never was a womanizer (if you allow me the comparison) but I think there is not enough time from "you have my cell number" (see quote above) to ..... peeeeeep, well, you know what I mean ... , meaning to concluding a MoU, let alone a firm order at Farnborough in two weeks.


Stranger things have happened.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 7:19 pm

TC957 wrote:
BA should have a trip to Boeing's sales team and discuss getting 748i's.....that'll bring the A380 price down !


No one on earth would call that bluff :rotfl:
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 7:23 pm

Jayafe wrote:
TC957 wrote:
BA should have a trip to Boeing's sales team and discuss getting 748i's.....that'll bring the A380 price down !


No one on earth would call that bluff :rotfl:


Not to mention that the "i" specific parts are most likely no longer in production.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 7:52 pm

bigjku wrote:
We know Airbus runs the line to produce A380’s at a loss. Taking on an incremental order doesn’t make a lot of sense. It just means losing more money.


You have no clue about how many orders Airbus has in the pipeline. You have no clue about possible production rates if these orders materialise. You have no clue about delivery schedule.

To basically claim Airbus should actively try to avoid selling Superjumbos is one of the craziest things that I've read here and it's not even original thinking but already made by one A380 troll about a decade ago.
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 8:15 pm

moa999 wrote:
Personally I think the biggest issue with the A380 are it's engines and space efficiency.

But the engines are more difficult. I certainly can't see another dual choice being offered for such a small volume.

At the moment, there are no A380 engine options, the reason EK hasn't made a decision.

RR are very reluctant at the price and performance points EK and BA require. And EA have gracefully exited, for the same reasons. EK have leverage with the 787 engine choice still under negotiation.
 
bigjku
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 8:17 pm

Strato2 wrote:
bigjku wrote:
We know Airbus runs the line to produce A380’s at a loss. Taking on an incremental order doesn’t make a lot of sense. It just means losing more money.


You have no clue about how many orders Airbus has in the pipeline. You have no clue about possible production rates if these orders materialise. You have no clue about delivery schedule.

To basically claim Airbus should actively try to avoid selling Superjumbos is one of the craziest things that I've read here and it's not even original thinking but already made by one A380 troll about a decade ago.


One that isn’t what I said. I said taking on incremental orders doesn’t make sense. And in this context with an airline demanding a low low price in particularly doesn’t make sense if it’s not moving you towards a rate increase. So let me expand. Airbus doesn’t need to sell anymore aircraft at a loss and should be firm on its pricing unless it can amass sufficient orders to get back to a profitable production rate. Fair enough?

Two what I am saying has merit because, well, it’s exactly what Airbus appears to be doing. They have secured enough orders to limp along and see if they can amass enough orders to change the momentum abd profitability outlook of the program for a number of years. Delivering another 6-10 frames over several years to IAG isn’t going to change that and they clearly feel no need to give a deep discount to them for those orders. If they did the deal would be done and IAG wouldn’t be whining about pricing after all this time wouldn’t it?

Three to answer the broader implied question of should Airbus sell at a loss. Well...maybe. Presuming there is a plan and eventually you can sell the product at a profit it does make sense. As a shareholder I would presume that there is a plan. If you can increase backlog to 200 units and go back to building 2 a month I think there could be long term profit there.

But if we run through all these years producing 6 a year for basically EK and everyone is delivered at a loss then everyone who made the decision to agree to this latest deal and production plan needs to be fired. Because if in the end we find out there wasn’t a plan and production was continued for reasons of ego or to protect jobs then what am I as a shareholder to think?

To me the play with the EK order has always been to do an A380neo. Selling anymore regular planes at a loss makes little sense if that is the plan. One will need every last order to make that business case.

But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?
 
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Taxi645
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 9:48 pm

EK got that price because it's order gave Airbus strategic options far into the future. Considering the strategic value any marginal loss incurred because of this order could be viewed as opportunity cost.

Any other incremental A380 order does not offer this strategic value anymore so to expect the same price is unrealistic.

Although you can always try and see where you end up...
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 9:59 pm

bigjku wrote:
But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?

So you are now taking one Airbus official word over the Airbus experts on this site that they can only sell A380's at a loss?
One official who may be on his way out with the shuffle, maybe he has an agenda because he did not officially support the project...just trying to understand...
 
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 10:13 pm

par13del wrote:
bigjku wrote:
But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?

So you are now taking one Airbus official word over the Airbus experts on this site that they can only sell A380's at a loss?
One official who may be on his way out with the shuffle, maybe he has an agenda because he did not officially support the project...just trying to understand...


This loss, is it with or without the cost of development and capital cost? If it is just the production cost then I expect a NEO :D
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RobertPhoenix
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 10:16 pm

bigjku wrote:
But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?


It all depends on what you mean by a loss. It is true that there is no point in reducing the companies bottom line by taking the orders.

However, when you talk about a loss on a sale you are usually comparing the sale price to the sum of three basic items. Material cost, direct labor cost, and overhead. As the bean counters compute it, any sale price that is less than the sum of those costs is a loss. However, usually the total cost of the overhead is relatively fixed, so any sale at a price that is more than the materials and direct labor is better than no sale, assuming that you are not then filling up your production space that could have been used on a more profitable sale.
 
JamesCousins
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 10:35 pm

I'd be shocked if British Airways don't order 8 or 10 more, to say the plane is "perfect" for their operations tells you everything you need to know. I bet it kills BA having 747 and 77W's full with little wiggle room for increasing frequencies...
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Re: Airbus Is in Talks With British Airways on More A380s

Tue Jul 03, 2018 10:45 pm

Strato2 wrote:
To basically claim Airbus should actively try to avoid selling Superjumbos is one of the craziest things that I've read here and it's not even original thinking but already made by one A380 troll about a decade ago.


The troll was right! Airbus has only lost money on the A380; cancelling this program a decade ago or at any time before or since would have been smart.

It's ridiculous for the (few remaining) A380 partisans to continue impugning the motives of A380 critics.
That'd be like the Trojans calling Cassandra a false prophet after the fall of Troy.
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questions
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 12:51 am

Why did BA, historically a 747 operator, go with the 380 instead of the 748? Would BA have been better off with the 748?
 
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 1:52 am

JannEejit wrote:
Maybe they could just make an offer on some cheap A330-800 Neo planes and have them welded on top of their A350's ? Yeah that'll do it ! :lol:


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Slug71
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 2:31 am

bigjku wrote:
Strato2 wrote:
bigjku wrote:
We know Airbus runs the line to produce A380’s at a loss. Taking on an incremental order doesn’t make a lot of sense. It just means losing more money.


You have no clue about how many orders Airbus has in the pipeline. You have no clue about possible production rates if these orders materialise. You have no clue about delivery schedule.

To basically claim Airbus should actively try to avoid selling Superjumbos is one of the craziest things that I've read here and it's not even original thinking but already made by one A380 troll about a decade ago.


One that isn’t what I said. I said taking on incremental orders doesn’t make sense. And in this context with an airline demanding a low low price in particularly doesn’t make sense if it’s not moving you towards a rate increase. So let me expand. Airbus doesn’t need to sell anymore aircraft at a loss and should be firm on its pricing unless it can amass sufficient orders to get back to a profitable production rate. Fair enough?

Two what I am saying has merit because, well, it’s exactly what Airbus appears to be doing. They have secured enough orders to limp along and see if they can amass enough orders to change the momentum abd profitability outlook of the program for a number of years. Delivering another 6-10 frames over several years to IAG isn’t going to change that and they clearly feel no need to give a deep discount to them for those orders. If they did the deal would be done and IAG wouldn’t be whining about pricing after all this time wouldn’t it?

Three to answer the broader implied question of should Airbus sell at a loss. Well...maybe. Presuming there is a plan and eventually you can sell the product at a profit it does make sense. As a shareholder I would presume that there is a plan. If you can increase backlog to 200 units and go back to building 2 a month I think there could be long term profit there.

But if we run through all these years producing 6 a year for basically EK and everyone is delivered at a loss then everyone who made the decision to agree to this latest deal and production plan needs to be fired. Because if in the end we find out there wasn’t a plan and production was continued for reasons of ego or to protect jobs then what am I as a shareholder to think?

To me the play with the EK order has always been to do an A380neo. Selling anymore regular planes at a loss makes little sense if that is the plan. One will need every last order to make that business case.

But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?


Airbus is in the business of selling planes. Like any company in sales, you take any sale you can get!
The ANA order was for 3. You are talking about a single product that lists for well over $400 MILLION. Not a few hundred or thousand or hundred thousands of dollars! So do you want $400 MILLION or do you want $0?? If the current loss is dissolvable, adding an extra frame or 3 or 6 per year would only make things easier. The suppliers would welcome it as it is more work for them too. Mindblowing that you would turn down a $1 BILLION+ (at list) sale. You must be a great salesman. Airlines don't run on Monopoly money.

RR is in a good position to push for the T7000 on the A380 in a pitch to lower prices to supply EK's 787s (The T7000 is essentially the T1000 TEN). Higher production of the T1000 TEN (and T7000) will lower prices for 3 aircraft types, including both A and B.

If predictions are correct about the Industry doubling in the 2030s, then I have little doubt that there will be a A380NEO (more than just new engines). Right now it's too early to tell. So keeping the line going at a dissolvable loss is absolutely the right decision for now. Until a decision can be made to NEO it or kill it.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 3:00 am

Slug71 wrote:
bigjku wrote:
Strato2 wrote:

You have no clue about how many orders Airbus has in the pipeline. You have no clue about possible production rates if these orders materialise. You have no clue about delivery schedule.

To basically claim Airbus should actively try to avoid selling Superjumbos is one of the craziest things that I've read here and it's not even original thinking but already made by one A380 troll about a decade ago.


One that isn’t what I said. I said taking on incremental orders doesn’t make sense. And in this context with an airline demanding a low low price in particularly doesn’t make sense if it’s not moving you towards a rate increase. So let me expand. Airbus doesn’t need to sell anymore aircraft at a loss and should be firm on its pricing unless it can amass sufficient orders to get back to a profitable production rate. Fair enough?

Two what I am saying has merit because, well, it’s exactly what Airbus appears to be doing. They have secured enough orders to limp along and see if they can amass enough orders to change the momentum abd profitability outlook of the program for a number of years. Delivering another 6-10 frames over several years to IAG isn’t going to change that and they clearly feel no need to give a deep discount to them for those orders. If they did the deal would be done and IAG wouldn’t be whining about pricing after all this time wouldn’t it?

Three to answer the broader implied question of should Airbus sell at a loss. Well...maybe. Presuming there is a plan and eventually you can sell the product at a profit it does make sense. As a shareholder I would presume that there is a plan. If you can increase backlog to 200 units and go back to building 2 a month I think there could be long term profit there.

But if we run through all these years producing 6 a year for basically EK and everyone is delivered at a loss then everyone who made the decision to agree to this latest deal and production plan needs to be fired. Because if in the end we find out there wasn’t a plan and production was continued for reasons of ego or to protect jobs then what am I as a shareholder to think?

To me the play with the EK order has always been to do an A380neo. Selling anymore regular planes at a loss makes little sense if that is the plan. One will need every last order to make that business case.

But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?


Airbus is in the business of selling planes. Like any company in sales, you take any sale you can get!
The ANA order was for 3. You are talking about a single product that lists for well over $400 MILLION. Not a few hundred or thousand or hundred thousands of dollars! So do you want $400 MILLION or do you want $0?? If the current loss is dissolvable, adding an extra frame or 3 or 6 per year would only make things easier. The suppliers would welcome it as it is more work for them too. Mindblowing that you would turn down a $1 BILLION+ (at list) sale. You must be a great salesman. Airlines don't run on Monopoly money.

RR is in a good position to push for the T7000 on the A380 in a pitch to lower prices to supply EK's 787s (The T7000 is essentially the T1000 TEN). Higher production of the T1000 TEN (and T7000) will lower prices for 3 aircraft types, including both A and B.

If predictions are correct about the Industry doubling in the 2030s, then I have little doubt that there will be a A380NEO (more than just new engines). Right now it's too early to tell. So keeping the line going at a dissolvable loss is absolutely the right decision for now. Until a decision can be made to NEO it or kill it.


I mean maybe you should talk to Airbus? They are the ones that haven’t yet closed the deal yet after all so they must have a bottom line below which they won’t go right? If it’s such a no brainer to just sell them why isn’t the deal done?

Clearly there is more to it than just it’s a billion in revenue so let’s do the deal. Or Airbus is stupid to make a beef about a few tens of millions of dollars. After all its a billion dollars in revenue right?
 
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Matt6461
Posts: 2956
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 3:37 am

Slug71 wrote:
Airbus is in the business of selling planes. Like any company in sales, you take any sale you can get!


I will buy your house for $1.
It's a sale you can get; you can't turn it down. DM for closing documents.
 
JayBCNLON
Posts: 318
Joined: Thu Aug 15, 2013 1:13 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 4:33 am

Boy you’re on a mission Matt! It’s just an airplane!
 
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Slug71
Posts: 1480
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 4:39 am

bigjku wrote:
Slug71 wrote:
bigjku wrote:

One that isn’t what I said. I said taking on incremental orders doesn’t make sense. And in this context with an airline demanding a low low price in particularly doesn’t make sense if it’s not moving you towards a rate increase. So let me expand. Airbus doesn’t need to sell anymore aircraft at a loss and should be firm on its pricing unless it can amass sufficient orders to get back to a profitable production rate. Fair enough?

Two what I am saying has merit because, well, it’s exactly what Airbus appears to be doing. They have secured enough orders to limp along and see if they can amass enough orders to change the momentum abd profitability outlook of the program for a number of years. Delivering another 6-10 frames over several years to IAG isn’t going to change that and they clearly feel no need to give a deep discount to them for those orders. If they did the deal would be done and IAG wouldn’t be whining about pricing after all this time wouldn’t it?

Three to answer the broader implied question of should Airbus sell at a loss. Well...maybe. Presuming there is a plan and eventually you can sell the product at a profit it does make sense. As a shareholder I would presume that there is a plan. If you can increase backlog to 200 units and go back to building 2 a month I think there could be long term profit there.

But if we run through all these years producing 6 a year for basically EK and everyone is delivered at a loss then everyone who made the decision to agree to this latest deal and production plan needs to be fired. Because if in the end we find out there wasn’t a plan and production was continued for reasons of ego or to protect jobs then what am I as a shareholder to think?

To me the play with the EK order has always been to do an A380neo. Selling anymore regular planes at a loss makes little sense if that is the plan. One will need every last order to make that business case.

But I leave it to you. What benefit does Airbus get from selling 6-10 more A380’s to IAG at a loss?


Airbus is in the business of selling planes. Like any company in sales, you take any sale you can get!
The ANA order was for 3. You are talking about a single product that lists for well over $400 MILLION. Not a few hundred or thousand or hundred thousands of dollars! So do you want $400 MILLION or do you want $0?? If the current loss is dissolvable, adding an extra frame or 3 or 6 per year would only make things easier. The suppliers would welcome it as it is more work for them too. Mindblowing that you would turn down a $1 BILLION+ (at list) sale. You must be a great salesman. Airlines don't run on Monopoly money.

RR is in a good position to push for the T7000 on the A380 in a pitch to lower prices to supply EK's 787s (The T7000 is essentially the T1000 TEN). Higher production of the T1000 TEN (and T7000) will lower prices for 3 aircraft types, including both A and B.

If predictions are correct about the Industry doubling in the 2030s, then I have little doubt that there will be a A380NEO (more than just new engines). Right now it's too early to tell. So keeping the line going at a dissolvable loss is absolutely the right decision for now. Until a decision can be made to NEO it or kill it.


I mean maybe you should talk to Airbus? They are the ones that haven’t yet closed the deal yet after all so they must have a bottom line below which they won’t go right? If it’s such a no brainer to just sell them why isn’t the deal done?

Clearly there is more to it than just it’s a billion in revenue so let’s do the deal. Or Airbus is stupid to make a beef about a few tens of millions of dollars. After all its a billion dollars in revenue right?


Why just Airbus then? Any deal involves BOTH parties. It most importantly has to work with IAG and BA's business model and future plans. They also have to have the capital/means to make any deal happen. So maybe BA hasn't closed the deal. Timing is everything, maybe now is not the time. Maybe BA want the same efficiency improvements and guarantees that EK is looking for. Airbus would naturally want a decent order or commitment from BA in return. It's a catch 22. Another problem is that RR have said they don't want to do any more PIPs on the T900. The GP7000 is done, so RR doesn't have a reason to be motivated to so. The money would be better spent on resolving the T1000 TEN (which has way more orders) issues. Discontinuing the T900 to focus those resources on the T7000 (and T1000 TEN) would streamline the product across the A380, A33XNEO, and 787. You also have a streamlined parts supply with high commonality, in turn gaining efficiency and lowering costs on the maintenance side.
It will also free up resources for RR to focus on the next generation engines (which sounds like it might be a streamlined product). Both Boeing and Airbus would be happy to lower their prices. After all, they will soon face competition from China and Russia.

So of course there's more to it (the money). Their whole business depends on it to survive! Not many people or business could survive losing the kind of money you are talking about. The prior recession would be nothing in comparison. Again, they aren't exchanging Monopoly money.
The point is that you are prepared to taking nothing over $400 million. You must be a rich man to be making such big decisions.

Deals don't close over night. Especially such big ones. Headlines like this are also no guarantee that a deal may happen. Airbus (and Boeing said every other manufacturer) are "in talks with airlines" all the time. They sell planes. For some reason this one got headlines. My guess would be, most likely due to EK wanting more A380 sales to other customers. BA is a likely customer and a logical approach. No guarantees though.
 
blackwidow
Posts: 48
Joined: Fri Feb 15, 2008 5:56 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 4:53 am

Isn't Farnborough coming up soon...?!? Zzzzzzzzz
 
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Slug71
Posts: 1480
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 4:58 am

Matt6461 wrote:
Slug71 wrote:
Airbus is in the business of selling planes. Like any company in sales, you take any sale you can get!


I will buy your house for $1.
It's a sale you can get; you can't turn it down. DM for closing documents.


I wasn't selling a house. I'm also not in sales, but market sets the value, and I command a price. You don't tell me how much you'll take it from me though. I'll show you the door.
So that would be an A380 at the AGREED price between Airbus and BA. Even if that the sale price was half of list, or even less at a round $200 million, youre crazy if you would turn down a single order. Increasing the production rate by even 1or 2 a year is not going to hurt any more than the current dissolvable loss. So turning a single sale (at a realistic price) down, would be very foolish. $0 < $200 million. That's $200 million that could be used to study the feasibility of a NEO. Or pay/hire employees, pay the light bill, fund your next projects etc..
 
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Matt6461
Posts: 2956
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 5:43 am

Slug71 wrote:
That's $200 million that could be used to study the feasibility of a NEO. Or pay/hire employees, pay the light bill, fund your next projects etc..


By definition, loss-making production means you have no money left over - less than none actually - after you pay the suppliers and workers required to build the next A380.
 
sabby
Posts: 438
Joined: Fri Jun 01, 2018 5:11 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 5:55 am

I have the same question as Dutchy. When Airbus say they are losing money on the A380, do they mean including development cost or they are selling less than production cost ? If it is former then even 1 sale is better than none as it will cut down the loss from development cost a little bit.
 
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Momo1435
Posts: 1159
Joined: Sat Aug 25, 2012 2:33 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 6:13 am

sabby wrote:
I have the same question as Dutchy. When Airbus say they are losing money on the A380, do they mean including development cost or they are selling less than production cost ? If it is former then even 1 sale is better than none as it will cut down the loss from development cost a little bit.
It's on production, they are losing money with every delivered A380. The development costs have all been written off and will never be recovered by the A380 sales on it's own. Luckily Airbus has been making enough money from the A320 & A330 and hopefully also soon from the A350 program.
 
Fitlikemin
Posts: 73
Joined: Tue Oct 11, 2016 6:20 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 6:35 am

questions wrote:
Why did BA, historically a 747 operator, go with the 380 instead of the 748? Would BA have been better off with the 748?


Good question. Economics, capacity probably have much to do with it, the B748 looks a superb aircraft but it's not really sold in sufficient passenger config.

Lufthansa seem happy enough with theirs.
 
FlyHappy
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 6:43 am

Slug71 wrote:
or even less at a round $200 million, youre crazy if you would turn down a single order.


Honestly, can you hear yourself typing?
Okay, I'm trying not to be the classic a.net ass, but what do you do for a living? Cuz you don't seem familiar with basic ideas involved in the cost of complex manufacturing. You don't just turn on and off the complex supply chain that makes up the build of such capital intensive and long lead time projects. Employees don't come for free, nor do they want to be out of job in a year. Your suppliers aren't interested in building specialized parts for 1 or 2 or even 5 aircraft. Everyone, no matter the industry, wants - neigh, needs stability.

Slug71 wrote:
Increasing the production rate by even 1or 2 a year is not going to hurt any more than the current dissolvable loss. So turning a single sale (at a realistic price) down, would be very foolish. $0 < $200 million.


How do you even know $200 million covers costs?

Slug71 wrote:

That's $200 million that could be used to study the feasibility of a NEO. Or pay/hire employees, pay the light bill, fund your next projects etc..


No, that's not "money in the pocket". It'll be spent - and probably even more, paying for the cost of production.
Funding your next project is probably best accomplished by NOT building and selling at the cost BA (and seemingly every other carrier) deems is prudent for them.
Just as BA knows what the value of a new build A380 is to them (oh, and they could have certainly acquired used frames for much less, but they haven't, no?) , I'm quite certain that Airbus has a better idea of what is "crazy" and what isn't.
 
Waterbomber
Posts: 849
Joined: Sat Jul 09, 2016 11:51 am

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 8:06 am

The base airframe and final assembly is relatively inexpensive. Even for an A380, between labor and materials, you're probably looking at less than 20 million USD.
But an airplane is much more than that. It's a combination of subassemblies, systems, engines and control surfaces. Most of those are built by suppliers who want top dollar for their products, given intellectual property, R&D investments, certification requirements and costs, their own set of raw materials, labor, overhead, etc...
Luckily for Airbus, just because it's big, the A380 doesn't necessarily have more of each of those. For instance, an A380 still has a single cockpit, a single rudder, etc...

So at the end of the day, how good Airbus is at negotiating with their suppliers determines how cheaply they can build and sell the thing.
If Airbus had everything under its control, BA could probably get a killer deal.

Imo, what Airbus can do is to force suppliers to lower their prices or threaten to move things in-house.
 
FlyHappy
Posts: 1115
Joined: Sat May 13, 2017 1:06 pm

Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 8:32 am

Waterbomber wrote:
Imo, what Airbus can do is to force suppliers to lower their prices or threaten to move things in-house.


and if they could wave a magic wand, and do that, there'd be no such thing as suppliers and subcontractors in the industry.
A380, everything built "in house"..... double the price.

how exactly does one "force" a supplier to reduce prices on a product with such an uncertain future? Do you think all the suppliers are as anxious to earn less (than likely already contracted for) to gamble on highly speculative future earnings as a.net members seem think they are?
 
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N14AZ
Posts: 4137
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Re: Airbus Is in Talks With British Airways on More A380s

Wed Jul 04, 2018 8:33 am

Waterbomber wrote:
Imo, what Airbus can do is to force suppliers to lower their prices or threaten to move things in-house.

IF they are able to produce parts at lower cost. As Flyhappy, I very much doubt that an organization like Airbus can prodcue anything at lower cost compared to a specialised sub-contractor.

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