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

Thu Jul 05, 2018 1:43 pm

SC430 wrote:


The A380 has done very little to change the way people fly today.


In terms of comfort in flight, most passengers disagree with you.
 
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JerseyFlyer
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 1:47 pm

LupineChemist wrote:
Isn't it generally agreed that the EK order is largely to just keep the line going until they need to decide on doubling down and start replacing the whole 380 fleet or start downsizing? If that is truly the case, I'm sure EK would be happy to swap some production slots in order to kick that can a bit further down the road.


I agree EK would likely be very relaxed about slipping their deliveries to accommodate a non-direct competitor. They have options concerning retirement dates for early frames that enables them to adjust fleet size to cope with with slower new-build deliveries.

I don't see Airbus increasing the rate above six, unless 7, 8, or whatever could be sustained across the same timeframe as anticipated for currently booked orders. They need a constant production rate so they can focus cost and people resources on other projects, not a fluctuating rate.
 
travelin man
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 1:51 pm

Momo1435 wrote:
travelin man wrote:
I feel that BA’s recent network decisions (adding smaller cities such as AUS, BNA, MSY, etc) point to a need for 787/350 type of aircraft, not A380s.

That's also to make use of the 787s that continue to join the fleet. If they would order more A380s you would see more changes in the use of aircraft within the network to facilitate the new A380s. IAG has pretty much said this when mr. Walsh commented that more A380s could easily be absorbed into the BA network. But for some reason, he says acquisition costs, it hasn't resulted in a follow-up order.


They didn’t order the 787s and then say “hmm where should we fly these?” They ordered the 787s with an eye towards serving smaller P2P markets. The fact is that there are WAY more of those markets than A380 capable markets, and BA is following the money.
 
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Momo1435
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 2:43 pm

travelin man wrote:
Momo1435 wrote:
travelin man wrote:
I feel that BA’s recent network decisions (adding smaller cities such as AUS, BNA, MSY, etc) point to a need for 787/350 type of aircraft, not A380s.

That's also to make use of the 787s that continue to join the fleet. If they would order more A380s you would see more changes in the use of aircraft within the network to facilitate the new A380s. IAG has pretty much said this when mr. Walsh commented that more A380s could easily be absorbed into the BA network. But for some reason, he says acquisition costs, it hasn't resulted in a follow-up order.


They didn’t order the 787s and then say “hmm where should we fly these?” They ordered the 787s with an eye towards serving smaller P2P markets. The fact is that there are WAY more of those markets than A380 capable markets, and BA is following the money.

Well they actually did do exactly that, most of the new 787 routes were decided long after they placed the order. For the A380 order the intended routes were already in place when they placed it, which was actually around the same time as the 787 order. The 1st deliveries were also very close to each other.

Of course they saw more bread in the 787 routes, they did order more of those then they ordered the A380. But with more 787s coming in and also for longer period they simply needed to find more routes for the 787 then for the A380.
 
airbazar
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 3:17 pm

FlyHappy wrote:
Its not quite that simple.
EK , on its own - is not enough. Not enough to support a NEO/rewing program in the future. That will just create more losses in the next decade.
Airbus needs more carriers to buy into the A380 ecosystem, sooner the better. But it must happen under financially responsible terms.
[...]
The foundation for the program has to be built on solid commercial grounds.

I agree however every company has a different definition for "financial responsibility".
I believe that Airbus is more than willing to keep the A380 going at a loss. The only question is how much of a loss is too much for them?
There are too many factors, positive and negative for keeping it going. We only just now seeing the first used A380 go to a new operator. The success or failure of that too will factor into Airbus' decision for sure.

sergegva wrote:
SC430 wrote:
The A380 has done very little to change the way people fly today.

In terms of comfort in flight, most passengers disagree with you.

While making ULH flying viable for airlines and affordable for millions of people.
Ironically it was the A380 and not the 77L/A345 that made ULH flying acceptable and available for the masses.
 
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7BOEING7
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 3:39 pm

mjoelnir wrote:
7BOEING7 wrote:
Slug71 wrote:

Most of the development costs were paid up front, most of the rest (if not all of it) were written off. The losses Airbus currently incurs, are production losses.


Written off or taken up front they are still loses. $25 billion is pretty heavy and has affected the company.


Still lower than the current bill for the 787. More than 25 billion unrecovered development cost plus 28 billion deferred production losses.


Big difference is every 787 delivered for over the last year and continuing forward is putting $$$$ in Boeing's coffers -- every 380 delivered (except for 35+/-) has and continues to deplete Airbus's coffers.
 
jeffrey0032j
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 4:07 pm

sergegva wrote:
SC430 wrote:


The A380 has done very little to change the way people fly today.


In terms of comfort in flight, most passengers disagree with you.

Nothing spectacular that hasn't been seen in older planes, aside from the size. Plus, the standard 7 abreast 767 has wider seats than most other planes but nobody is raving about it.

And most passengers and even corporate accounts are more concerned about convenience and price than flight comfort. Opening new markets is the way to change the way people fly, less transfers, less layovers, less hassle. Flying, no matter how comfortable the plane is, is still not as comfortable as being on the ground, and more direct flights allow people to be in their homes/hotel/workplace faster, doing things that really matters to them.
 
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PW100
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 4:30 pm

7BOEING7 wrote:
sergegva wrote:
.

Finally, I'm under the impression that some people here underestimate the overall impact of the A380 for Airbus. From a strictly financial point of view, the programme may not have brought them any money. But until proven otherwise, it did not cause heavy losses either.


You're calling $20-25 billion (conservatively) in development costs plus another few billion in losses on the almost 200 airplanes they delivered at a loss not a heavy loss for Airbus? Whoa!!!


Just to be sure, are you suggesting/claiming that Airbus lost "$20-25 billion (conservatively) . . . plus another few billion in losses" on the A380 program to date?




7BOEING7 wrote:
From what has been discussed in the press and on here, they barely made a profit on the production in 2015 and after that the rate dropped and profitability became questionable. They delivered 27 airplanes in 2015 and they've delivered about 226 airplanes -- do the math. Conservatively you could probably say 190 if you want, makes no difference, it's in a deep, deep hole, getting deeper..


Admittedly, as an engineer I have no deep knowledge in finance world. However it was my understanding that some of the per-frame cost included cost to repay loans, RLI etc. So even if each frame then was delivered at (some) loss, some of that loss went to reduce the "$20-25 billion (conservatively) in development costs'
If that is correct, then there seems to quite some double-counting in losses going on.
Now as I stated, I'm by no means a financial expert, so I’ll be happily corrected if you have better information.




Slug71 wrote:
Most of the development costs were paid up front, most of the rest (if not all of it) were written off. The losses Airbus currently incurs, are production losses.


Is that a fact? Isn’t there some portion of repaying loans and RLI factored into that per-frame loss?




LupineChemist wrote:
As mentioned elsewhere obviously profit = revenue - costs so taking a loss means the costs are higher than the revenue...so why continue?


Perhaps because in the per-frame loss repaying loans and RLI may be included to some extent. If Airbus would not continue production, that still needs to be repaid (to some extent). SO stopping production will not stop that part of the losses. Perhaps, there may be some incentive in there to not stop production at this point.
Not sure, but perhaps RLI requires Airbus commitment to continue production for a certain amount of time. Perhaps RLI payback can only be stopped/waived after 20 years of production/deliveries.




SC430 wrote:
In the case of the 787 you would be 100% wrong. With block accounting the development cost are factored in to the first 1,300 frames delivered.


Again, not a financial expert here. But I could swear that I have been assured multiple times on here that development cost is not and may not be included in deferred cost. Only production cost and tooling cost could be deferred. Development cost (R&D) are accounted for as they occur. Apparently.




7BOEING7 wrote:
Big difference is every 787 delivered for over the last year and continuing forward is putting $$$$ in Boeing's coffers -- every 380 delivered (except for 35+/-) has and continues to deplete Airbus's coffers.


Every A380 delivered continues to pay-off debts and RLI through royalties. Stopping production would not take those costs away. I think. Happy to be corrected if wrong.
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incitatus
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 6:00 pm

Besides engines and efficient utilization of its floor space, I would add another drag on the A380 performance: Its structure was over-designed in two ways. First, the program was devised and engineered with a stretch in mind. Second, the A380 has too much range that most airlines do not use. 80% of its missions are under 6000 statute miles. 95% of its missions are under 7500 statute miles. In full-but-impossible hindsight, a much lighter A380 with 800 nm shorter range would have much better financial performance.

I do not expect BA to buy new frames. I think they will go for used ones. The relevance of refurbishment cost is overstated: Interiors have to be purchased for new or used aircraft regardless. It may just be they have a bigger quantity than 6 in mind, or they to not want to purchase early production ones.
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Jayafe
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 6:38 pm

7BOEING7 wrote:
You're calling $20-25 billion (conservatively) in development costs plus another few billion in losses on the almost 200 airplanes they delivered at a loss not a heavy loss for Airbus? Whoa!!!


That's simply not true.

SC430 wrote:
The 787 and A350 have created hundreds of city pairs that did no exist prior to their availability.

Hundres. Can I have a list with 200 routes "created" by the 787/350? I'm putting 1 month of my salary on the table.

travelin man wrote:
I feel that BA’s recent network decisions (adding smaller cities such as AUS, BNA, MSY, etc) point to a need for 787/350 type of aircraft, not A380s.


And BA still seem to disagree shouting to anyone who asks they'd like to get more A380. So curious...
 
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Revelation
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 7:46 pm

frmrCapCadet wrote:
...want to emphasize that were the 380 to stop production for even 5 years restarting likely would not happen.

And since we're making bold statements, A380 rising from the ashes and justifying a reboot of the production line in the mid 2020s likely will not happen either.
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airbazar
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Re: Airbus Is in Talks With British Airways on More A380s

Thu Jul 05, 2018 8:07 pm

7BOEING7 wrote:
Big difference is every 787 delivered for over the last year and continuing forward is putting $$$$ in Boeing's coffers -- every 380 delivered (except for 35+/-) has and continues to deplete Airbus's coffers.

On the flip side if they're not selling that many aircraft then they're not really losing that much :)
Selling 10 frames at a loss might be acceptable. Selling 200 at a loss might not. Only Airbus knows what they can and can't handle.
jeffrey0032j wrote:
In terms of comfort in flight, most passengers disagree with you.

Nothing spectacular that hasn't been seen in older planes, aside from the size.

Isn't that true for any modern airplane, including the 787 and A350? What exactly do these newer planes bring that is so spectacular?
I've never flown on an A350 but I've flown on a 789 and I noticed no difference compared to anything else. It's just a "metal" tube with seats.

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