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hinckley
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 4:24 pm

flyingclrs727 wrote:
hinckley wrote:
Boeing's bet that market fragmentation was the (near-term) future has proved to be right. But that will only take us so far and limited infrastructure will begin to drive the market. imo, that's when VLAs will make a come-back. But by then, they'll probably be VLA twins, not quads.

The 777X is a VLA! The 779X is equivalent to a 744 in capacity. The 778X has slightly less capacity than a 77W but better range than a 77L. The rumored 7710X would have the capacity of the 748i.


I agree completely . . . and I think it furthers my point. We now have efficient VLA twins that are approaching the capacity of the 778 and A380. And how are they selling?? Not so great. I just don't think that there's a large market for VLAs . . . yet.
 
aaexecplat
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 4:26 pm

hinckley wrote:
aaexecplat wrote:
EChid wrote:
And I've got to say, all this crap about the hatred of the A380 in the US is so silly. The A380 is absolutely the wrong product for US carriers. And remember, most (not all) large US carries started dumping the 747 before anyone else for the same reasons that they never bought the A380. So could we just stop that stuff.


You clearly misunderstood my point. I agree that the A380 is the wrong aircraft for US carriers. What I mean is that there is a clear hatred among a disproportionately large percentage of US participants on this board towards the A380 no matter what country or airline said airplane operates in. I know that is an uncomfortable subject, but in my experience, largely true.
 
ScottB
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 5:06 pm

EChid wrote:
there is a value of brand image to maintain.

EK has worked extremely hard on that, so to millions around the world, EK means in-flight showers, first-class suites, and upper deck luxury. It's their brand. Yes, few will experience that, and the 777s can partially replace some of those aspects, but the A380 is closely linked to their brand. People know it and dream of being on it. That's awfully powerful. It doesn't mean it has to be their brand forever, but there is monetary value in that brand, and aspirational value because it directs people to purchase EK flights (even if just Y or J) when they may have pleanty of cheaper options, and that has to be part of their consideration when they make investment decisions.


But really there's only one aspect of the luxury branding which would be unique to the A380, and that's the upper deck. Everything else you cite can be implemented on the 777 or A350 or 787. Heck, we even see suites on the A321. Even if A380 production were to cease tomorrow, EK would still have decades of life left in the A380 fleet -- a very long time to promote every other aspect of luxury they offer. In the end, their brand is Emirates, not A380, and they should promote the brand they control.

aaexecplat wrote:
The hatred towards the A380 is so great (in particular from here in the US) that they cannot and will not see the positive impact the aircraft can have for certain carriers nor how fantastic of an airplane it is for pax to fly on (many have argued it is a terrible aircraft to fly on only to admit later they hadn't themselves flown on it). There is simply no aguing with that kind of preconceived attitude.


Been on it. I found it uncomfortable largely because the window seats are too far from the side wall in economy, making it impossible to lean against the wall to sleep without the armrest digging into your side and your pillow falling into the row behind. On AF, the IFE system was so outdated and slow as to be near-unusable, but that's an airline thing. I far prefer smaller widebodies -- smaller crowds waiting to board, shorter immigration queues, less of a cluster- at baggage claim.

NameOmitted wrote:
I guess my point is that any new work that Airbus did world have to be able to compete with the pricing that Boeing could offer on a line that has been paid off. Even if Boeing never sells another Intercontinental, their ability to offer it becomes as a "fleet in being" against any new A380 development and sales.


That might be the case if the -8i and -8F were close to identical, but there are enough differences that maintaining the ability to produce the -8i comes with costs that Boeing may not be willing to eat when the -8i competes with the 777-9 as well as the A380.

Waterbomber wrote:
We are talking about a 200 million a piece aircraft. Every sale is huge. This is the equivalent of 7-10 A220's or 5-7 A320's, and yet the A380 still has only 1 cockpit, 4 engines and one structure to assemble. How big of a production cost difference is there really between an A320 designed in the 1980's and an A380 designed 20 years later? Have you asked yourself that question.


There's a huge production cost difference. The A320 doesn't require costly production convoys and the high production rate means that Airbus gains significant economies of scale in manufacturing and leverage in dealing with suppliers. You're implying that Airbus is stupid or lying when they publicly state that they are near break-even on production costs for A380. And trust me, the customers have a good idea of what the plane costs to make and what a reasonable margin would be for the manufacturer.

Even if they bring in 200 million in revenue for each A380, it's pointless if they have to sell for a loss and there's no realistic scenario which leads to future A380s being sold for attractive margins. It'd be more justifiable if they could leverage the A380 to induce EK to buy A350 which hasn't worked or in some sort of Airbus Variety Pack order like Kingfisher's.

Waterbomber wrote:
If in the next 15 years there is a significant advance in propulsion efficiency, everything changes. Everybody will be able to afford to fly, resulting in huge volume increase.


You don't think both Airbus & Boeing have a good handle on where technology in the industry will be in 15 years? Even with some sort of step-change improvement, A380 with its 1990s technology will be a poor competitor against a 2030-designed clean-sheet VLA from Boeing.
 
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NWAROOSTER
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 5:08 pm

aaexecplat wrote:

Quite possibly the best post in this entire thread. You clearly "get" marketing and branding. As a professional in that industry, it is particularly critical to distinguish yourself in a space where you are selling a commodity product/service (which is what the airlines do). The hatred towards the A380 is so great (in particular from here in the US) that they cannot and will not see the positive impact the aircraft can have for certain carriers nor how fantastic of an airplane it is for pax to fly on (many have argued it is a terrible aircraft to fly on only to admit later they hadn't themselves flown on it). There is simply no aguing with that kind of preconceived attitude.

I will agree that the raw financial comparing the A380 with the 779 do not look like it has long-term viability unless Airbus invests in improvements though. That point could be quite a bit into the future.

There is NO hatred to speak of in the United States for the A380. It is simply that the three dominate airlines in the US do not have a need for this aircraft. They are not even buying the 747-8i. :old:
Procrastination Is The Theft Of Time.......
 
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Revelation
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 5:24 pm

aaexecplat wrote:
I basically agree. That said, I will go on the record here and state that IF the RR order is out the window, EK will order EA engines for the 36 orders at risk. EK are brinksmen in negotiations and I'd expect nothing less than a red line in the sand that will shift when they believe they have squeezed every ounce of value out of Airbus, RR and EA.

I just don't see where there is any more value to be extracted.

viewtopic.php?t=776629 showed the last RR PIP only provided 0.5% - 0.8% and the thread starter here claimed it didn't actually reach that standard. Somewhere on this grand forum there's some quotes saying the PIP mining has reached the point of no return and a big spend is now needed to improve T900 to any significant degree.

EA is a few PIPs behind but it'd be a big ask to get GE to crack open the scaled GE90 core on GP7200 and make enough changes to catch up, and do so for a 2020 deadline. In this thread we read EA would need 50 confirmed orders rather than 20+16 which is now on the table.

Airbus itself was said to be starting the process of figuring out how to wind down the line before this engine-less deal closed ( ref: https://www.reuters.com/article/us-airb ... SKBN1EL11L ).

My best bet is RR making some face-saving guarantees regarding performance rather than EA spinning up the production line to produce engines with less performance than the current T900s. That's the only outcome I can see making any sense.
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Channex757
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 5:40 pm

There is another part to the GP7200 story. Pratt and Whitney.

With Pratt's ongoing cash burn over the GTF motors as well as their focus on that gearbox technology as the future driver for them, can anyone see them ponying up their half for multiple nested PIPs on an outdated engine for a relatively small order?

The EA is NOT an exclusive GE product. Pratt would still be responsible for their share, the fan and low pressure assembly.
 
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Slug71
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 5:51 pm

Revelation wrote:
aaexecplat wrote:
I basically agree. That said, I will go on the record here and state that IF the RR order is out the window, EK will order EA engines for the 36 orders at risk. EK are brinksmen in negotiations and I'd expect nothing less than a red line in the sand that will shift when they believe they have squeezed every ounce of value out of Airbus, RR and EA.


My best bet is RR making some face-saving guarantees regarding performance rather than EA spinning up the production line to produce engines with less performance than the current T900s. That's the only outcome I can see making any sense.


RR has already said there won't be any more performance improvements to the T900. So I just dont see any face-saving guarantees. Especially since the last updates fell short.
Theres really no incentive right now for RR or EA to make any further investments to the current A380 powerplants.
And like I said previously, if GP7200 production was slated to end this year, I dont see how they can keep it going until these deliveries are supposed to begin.

Channex757 wrote:
There is another part to the GP7200 story. Pratt and Whitney.

With Pratt's ongoing cash burn over the GTF motors as well as their focus on that gearbox technology as the future driver for them, can anyone see them ponying up their half for multiple nested PIPs on an outdated engine for a relatively small order?

The EA is NOT an exclusive GE product. Pratt would still be responsible for their share, the fan and low pressure assembly.


I don't see it. And likely neither does EA, which is why they dont appear to be making an aggressive push.
It would be in GE's favour to get the GEnx on the A380 too.

EA/GE and RR would be better off pooling further development money to get the T7000 and GEnx certified on the A380.
 
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Revelation
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:02 pm

Channex757 wrote:
There is another part to the GP7200 story. Pratt and Whitney.

With Pratt's ongoing cash burn over the GTF motors as well as their focus on that gearbox technology as the future driver for them, can anyone see them ponying up their half for multiple nested PIPs on an outdated engine for a relatively small order?

The EA is NOT an exclusive GE product. Pratt would still be responsible for their share, the fan and low pressure assembly.

Sure, and if we want to dig deeper, GE subs to Safran and PW subs to MTU, and there's many others when you consider engine accessories, nacelles, etc.

MTU Aero Engines is a major partner of the programme, with 22.5% share. The German company produces the high-pressure turbine, the low-pressure turbine and the turbine center frame. Safran with 17.5% designs and produces the low-pressure compressor.

Ref: https://en.wikipedia.org/wiki/Engine_Alliance_GP7000

As noted earlier in the thread, the last GP7200 order for EA had an EIS of 2015 so it's hard to imagine all the participants could restart production in a short time span, never mind design, build and test the PIPs needed get the performance up to and/or above the T900 for a 2020 deadline.

It seems EK's choices are disappointing fuel burn from RR or even more disappointing fuel burn from EA.
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Wake now, discover that you are the song that the morning brings
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morrisond
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:05 pm

With the A351 rumored to be up to 321T MTOW - Airbus could be really smart to kill the 380 and use the Production space and resources to expand A350 production and add an mimimum change 350-1100.

Using the same Wing and gear as the 1000 - stretched to 80M. How much would it add in Empty Weight? 359 to 351 is only 16T with heavier wing and gear - would it be max 15T for the extra 7M?

Probably 1,000NM less range - but 7,400NM for EK trunk routes would be more than fine - the extra 7M could add another 8 rows of Y seats or 72 seats - call it +50 in reality. It would be the CASM champ at 321T MTOW.
 
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par13del
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:07 pm

Slug71 wrote:
RR has already said there won't be any more performance improvements to the T900. So I just dont see any face-saving guarantees. Especially since the last updates fell short.
Theres really no incentive right now for RR or EA to make any further investments to the current A380 powerplants.

So the promises that RR made to get the contract to switch engines does or did not have any penalties for non-compliance?
 
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seahawk
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:12 pm

Let us look at the engine OEMs. All 3 have new programs that have met costly problems, GE is even developing the 777 engine right now and all 3 will be up for the 797 engine deal. There is zero incentive to find some small but costly fuel burn reduction in an an old engine with a very limited market.
 
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flyingclrs727
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:15 pm

ScottB wrote:
EChid wrote:
there is a value of brand image to maintain.

EK has worked extremely hard on that, so to millions around the world, EK means in-flight showers, first-class suites, and upper deck luxury. It's their brand. Yes, few will experience that, and the 777s can partially replace some of those aspects, but the A380 is closely linked to their brand. People know it and dream of being on it. That's awfully powerful. It doesn't mean it has to be their brand forever, but there is monetary value in that brand, and aspirational value because it directs people to purchase EK flights (even if just Y or J) when they may have pleanty of cheaper options, and that has to be part of their consideration when they make investment decisions.


But really there's only one aspect of the luxury branding which would be unique to the A380, and that's the upper deck. Everything else you cite can be implemented on the 777 or A350 or 787. Heck, we even see suites on the A321. Even if A380 production were to cease tomorrow, EK would still have decades of life left in the A380 fleet -- a very long time to promote every other aspect of luxury they offer. In the end, their brand is Emirates, not A380, and they should promote the brand they control.


What can EK do with the upper deck on the A380 that can't be done on an A330 or A350? The A380 upper deck basically has the floor space of an A330 passenger deck. All the premium seating is located on an upper deck that has a similar cross section to passenger decks of other aircraft built by Airbus and Boeing. The A350 actually has a slightly wider cross section. Airlines can offer separate boarding jetways for premium classes on single deck aircraf if the jetways at a gate are so configured. Showers? They are doable on large twin wide bodies too. Apartments? How has that worked out for Etihad? At some point the amenities start to rival the cost of chartering a private jet but with none of the flexibility.
 
Waterbomber
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:28 pm

There is no evidence to suggest that the B779 will burn less per seat than an A380.

The A380 is a 12 ton per hour aircraft and in terms of floor space, it is a 900+ seater in all Y configuration.
The B779 will only burn 12% less than the B77W ending up in the high 7 tons per hours as a max 600 seater.
CASM is much more than just fuel too and there are many high value maintenance expenses that cost as much regardless of the number of seats.
In terms of capital cost, Airbus should be able to match the B779 on price, again for 1.5 times more seats.
The A380 still offers per seat cost benefits over the B779 provided that the seats can be filled.
This is the tricky part. While most operators don't have a problem filling an A380 in the high season at high yields and virtually print loads of money, the issue is what do they do with it in the low season? Many carriers are choosing to go for smaller aircraft for this very reason.
Small aircraft can make a small profit in the low season and a medium profit in high season. So yes, they can be overall more profitable than operating an A380 with mega profits in the high season while operating at a loss in the low season.
However, at the same time, these smaller aircraft are shaping the market in favor of the A380. Has anyone noticed that high season tickets are now higher priced and more and more people are choosing to take holidays in the lower seasons?
Airlines operatinh smaller aircraft have to try to maximise the revenue of the lower amount of seats at their disposal by increasing fares in the high season.
This phenomenon will continue to reduce seasonality effects and spread traffic more evenly over the year as people are adapting.
At the same time, the A380 is becoming a cheaper aircraft to buy, so that it may become easier to park in the low season.

I don't think that the current A380 is a very optimised aircraft. As many point out, its mass is not fully converted into efficiency, there is a lot of waste in the corners.
However, it can be a great platform for whatever comes next.

As for growing from below ie bigger narrowbodies, it's a nice story. But those bigger narrowbodies are not going to carry more pax unless feeding larger widebodies.
 
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lightsaber
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:46 pm

Waterbomber wrote:
There is no evidence to suggest that the B779 will burn less per seat than an A380.

The A380 is a 12 ton per hour aircraft and in terms of floor space, it is a 900+ seater in all Y configuration.
The B779 will only burn 12% less than the B77W ending up in the high 7 tons per hours as a max 600 seater.
CASM is much more than just fuel too and there are many high value maintenance expenses that cost as much regardless of the number of seats.
In terms of capital cost, Airbus should be able to match the B779 on price, again for 1.5 times more seats.
The A380 still offers per seat cost benefits over the B779 provided that the seats can be filled.
This is the tricky part. While most operators don't have a problem filling an A380 in the high season at high yields and virtually print loads of money, the issue is what do they do with it in the low season? Many carriers are choosing to go for smaller aircraft for this very reason.
Small aircraft can make a small profit in the low season and a medium profit in high season. So yes, they can be overall more profitable than operating an A380 with mega profits in the high season while operating at a loss in the low season.
However, at the same time, these smaller aircraft are shaping the market in favor of the A380. Has anyone noticed that high season tickets are now higher priced and more and more people are choosing to take holidays in the lower seasons?
Airlines operatinh smaller aircraft have to try to maximise the revenue of the lower amount of seats at their disposal by increasing fares in the high season.
This phenomenon will continue to reduce seasonality effects and spread traffic more evenly over the year as people are adapting.
At the same time, the A380 is becoming a cheaper aircraft to buy, so that it may become easier to park in the low season.

The 77W already burns less per seat in a 2 or 3 class. The 779 will burn 20% less per seat than the A388.

There is no high density A388 as you propose.

Do not count on Boeing missing promise.

http://www.opshots.net/2015/04/aircraft ... -expenses/

$140,000 of fuel for a 77W with 360 pax is $388 per passenger

$244,539 of fuel for the A388 for 591 pax is $413 per passenger.

Yes, because of other items, the A388 costs less per passenger.

You do realize the 779 will cut fuel burn to about $312 per passenger, cut maintenance about 10% thanks to predictive maintenance improvements, and cuts other expenses per passenger by merit if carrying 420 passengers rather than 360.

Sorry, but there is already evidence the A388 is a bit of a high fuel burner. Not surprising, it was developed in a world of sub $30/oil.

The 77W of today burns what, 6% less than at A380 launch.

I like the A380 concept, I just must be 4 to 10 meters longer to be efficient. It must receive engines at least as modern as the GE9x to be competitive.

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flyingclrs727
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 6:57 pm

Slug71 wrote:
Revelation wrote:
aaexecplat wrote:
I basically agree. That said, I will go on the record here and state that IF the RR order is out the window, EK will order EA engines for the 36 orders at risk. EK are brinksmen in negotiations and I'd expect nothing less than a red line in the sand that will shift when they believe they have squeezed every ounce of value out of Airbus, RR and EA.


My best bet is RR making some face-saving guarantees regarding performance rather than EA spinning up the production line to produce engines with less performance than the current T900s. That's the only outcome I can see making any sense.


RR has already said there won't be any more performance improvements to the T900. So I just dont see any face-saving guarantees. Especially since the last updates fell short.
Theres really no incentive right now for RR or EA to make any further investments to the current A380 powerplants.
And like I said previously, if GP7200 production was slated to end this year, I dont see how they can keep it going until these deliveries are supposed to begin.

Channex757 wrote:
There is another part to the GP7200 story. Pratt and Whitney.

With Pratt's ongoing cash burn over the GTF motors as well as their focus on that gearbox technology as the future driver for them, can anyone see them ponying up their half for multiple nested PIPs on an outdated engine for a relatively small order?



The EA is NOT an exclusive GE product. Pratt would still be responsible for their share, the fan and low pressure assembly.


I don't see it. And likely neither does EA, which is why they dont appear to be making an aggressive push.
It would be in GE's favour to get the GEnx on the A380 too.

EA/GE and RR would be better off pooling further development money to get the T7000 and GEnx certified on the A380.


The GEnx doesn't have enough thrust. The GEnx-2B is about 8-10 thousand pounds of thrust short of the existing EA GP-7200. GE didn't even want to make a larger variant for the A350. It may be way too expensive to make an uprated GEnx-2. The only engine GE could offer inexpensively would be a derated GE9x, but that would not be optimal for the A380. The GE 9X is about 40% higher thrust than needed for the A380. It looks like the A380 has become the 757 of the VLA engine market. The available modern engines are either too small or or too large, and there isn't a big enough market to justify building an optimized engine.
 
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lightsaber
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 7:07 pm

What is Airbus strategy to keep the A380 in production? This order is now void. That doesn't matter as much as it is now too late to order long lead items for 2020 delivery. Airbus must already cut 2020 and 2021 A380 production (does not impact 2019) due to this RR/EK fued.

Obviously EK doesn't like the current terms. Obviously, RR outbid EA, but didn't meet promise. At most penalties pay 25% of the added fuel expenses and most likely, the penalty cap has already been hit (maximum quarterly payments will be paid). Heck, it is possible RR has hit the contract limit already and has ceased paying penalties.

I specialize in recovery plans. What is the recovery plan for Airbus, if any?

Also, there are two other A380 threads on a stretch and the A380F. This thread is shorter term.

Airbus' new CEO needs to put a stop to cancelled and renegotiated orders such as this one.

With this order expiration, does that leave only 22 A388s for EK? Note I'm asking. The backlog is light on other airlines that will take theirs after ANA receives 3.

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flyingclrs727
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 7:11 pm

Ironically the EU rules that kept the EA engines off of aircraft needing ETOPS compliant engines like the proposed 767-400ERX meant the EA engines had no customer other than the A380. The unavailabilty of an engine for the 767-400ERX meant Boeing halted the program. Boeing then started researching a Sonic Cruiser. When airines said they were more interested in using that technology to create a more efficient plane than a faster plane, Boeing changed the direction of their research to the 7E7 which became the 787.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 7:39 pm

flyingclrs727 wrote:
Ironically the EU rules that kept the EA engines off of aircraft needing ETOPS compliant engines like the proposed 767-400ERX meant the EA engines had no customer other than the A380.

At the risk of thread drift, could you please elaborate on this issue?

V/F
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aaexecplat
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 7:54 pm

lightsaber wrote:
http://www.opshots.net/2015/04/aircraft ... -expenses/

$140,000 of fuel for a 77W with 360 pax is $388 per passenger

$244,539 of fuel for the A388 for 591 pax is $413 per passenger.


Where are you getting these numbers from?
 
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Revelation
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 8:14 pm

VirginFlyer wrote:
flyingclrs727 wrote:
Ironically the EU rules that kept the EA engines off of aircraft needing ETOPS compliant engines like the proposed 767-400ERX meant the EA engines had no customer other than the A380.

At the risk of thread drift, could you please elaborate on this issue?

V/F

https://www.flightglobal.com/news/artic ... rk--66153/ perhaps?
Wake up to find out that you are the eyes of the world
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flyingclrs727
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 8:17 pm

VirginFlyer wrote:
flyingclrs727 wrote:
Ironically the EU rules that kept the EA engines off of aircraft needing ETOPS compliant engines like the proposed 767-400ERX meant the EA engines had no customer other than the A380.

At the risk of thread drift, could you please elaborate on this issue?

V/F



The Engine Alliance engines were allowed on the A380 on the stipulation that they would not be offered for ETOPS applications like the proposed 767-400ERX. This limited the market for the EA engines and limited the opportunites for the EA to invest in upgrades to the EA engines. This was a blatently protectionist move by the EU to protect Airbus. It came back to bite Airbus in the butt. GE and PW have been unwilling to make improvements in the EA engines unless a pretty large minimum order is met.
 
Bald1983
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 8:18 pm

Noshow wrote:
Let's move away from programs to the overall market for a second:
Air traffic keeps growing, infrastructure gets congested, industry is consolidating. This is no PR-spin these seem to be the facts.
This is why I see a future need for big aircraft. Maybe we have not the right ones for the real big size?


One never knows, but when the time arrives, there will probably be larger twins that make the A-380 even more obsolete. It will be a long time before we really need an A-380 size aircraft. When that time arrives, 777x, A-350, to name a few.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 8:18 pm

Revelation wrote:
VirginFlyer wrote:
flyingclrs727 wrote:
Ironically the EU rules that kept the EA engines off of aircraft needing ETOPS compliant engines like the proposed 767-400ERX meant the EA engines had no customer other than the A380.

At the risk of thread drift, could you please elaborate on this issue?

V/F

https://www.flightglobal.com/news/artic ... rk--66153/ perhaps?


Thanks!
 
smartplane
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 8:22 pm

Slug71 wrote:
I don't see it. And likely neither does EA, which is why they dont appear to be making an aggressive push.
It would be in GE's favour to get the GEnx on the A380 too.

EA/GE and RR would be better off pooling further development money to get the T7000 and GEnx certified on the A380.

EA didn't initially even make an offer.

But it's not just GE/EA between a rock and a hard place.

B holds conditional EK orders for the 777 and 787. Six months ago, B were bullish of the possibility the EK A380 order would fall through, with the collateral damage being extra orders for them.

Now, we could see an industry first. Boeing may fund GE to make a seriously aggressive EA lifetime engine bid, and a PiP. Or it might be cheaper for Boeing to fund RR to do the same. For a competitor to make a sale.

Why would B do this? Apart from requiring pivotal 777X, and rather less important 787 sales to go unconditional, it also means a competitor will be distracted with A380 production / development(?) for another decade or more.

Can you imagine the forces unleashed at Airbus (and EK) if the top up order is cancelled, giving A justification to cancel the A380? We will have engine gate. Will EK become another QR when it comes to accepting new aircraft (cancellation unlikely due to launch pricing)? Will the 787 order be lost? Will A use the resources and facilities released to launch the A350X, A322 and others, and / or become RR's white knight?
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 8:47 pm

aaexecplat wrote:
lightsaber wrote:
http://www.opshots.net/2015/04/aircraft ... -expenses/

$140,000 of fuel for a 77W with 360 pax is $388 per passenger

$244,539 of fuel for the A388 for 591 pax is $413 per passenger.


Where are you getting these numbers from?

Since you quoted my link, I assume you wonder about my math.

The fuel numbers (cost() was from the link as was the 591 pax, I just divided for cost. I used EK's seat count as I consider it the most equivalent.

The 77W has always burned less fuel per passenger. At sub $30/bbl, it saved money elsewhere. At today's oil prices and next generation of aircraft, it is easy to understand the lack of sales.

I assume EK's economics of scale and negotiation position allowed them to cut purchase costs and parts costs that worked for EK when they announced this order. I do wonder if the numbers work at higher oil prices?

I wish I could share what I've seen on the GE9x. (See techops discussion on the engine). It will have many CMC parts (I found out via that discussion that the CMC turbine blades are out, but other high turbine cmc parts remained).

So now we have a 779 a lighter CFRP wing, greater aspect ratio (required for laminar flow, so high aspect ratio wings save more fuel than the back of the envelope equations suggest). Far more fuel efficient engines and many small optimizations.

A 20% cut in fuel burn per passenger is required in a world with the A35K and 78J. Every year we aerospace engineers work to cut costs about 1% per passenger. It can be self diagnostic sensors to cut maintenance, new material and shapes to cut fuel burn, details in the engines. Or scale. Like ships, it is a 3 for 2 rule unless a step change (penalty narrowbody to widebody or 1 to 2 decks unless large).

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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 9:27 pm

morrisond wrote:
With the A351 rumored to be up to 321T MTOW - Airbus could be really smart to kill the 380 and use the Production space and resources to expand A350 production and add an mimimum change 350-1100.

Using the same Wing and gear as the 1000 - stretched to 80M. How much would it add in Empty Weight? 359 to 351 is only 16T with heavier wing and gear - would it be max 15T for the extra 7M?

Probably 1,000NM less range - but 7,400NM for EK trunk routes would be more than fine - the extra 7M could add another 8 rows of Y seats or 72 seats - call it +50 in reality. It would be the CASM champ at 321T MTOW.

The A350-1100 would require more engine thrust. Even with the same MTOW you have extra fuselage drag. The Trent XWB might not be able to get the required thrust without big investment.

RR had to make big changes already for the A350-1000 engine. It is now sub-optimal compared to the A350-900 engine. They had to enlarge the core while keeping the fan size the same which means inferior fuel efficiency.

IMO this is one of the contributing factors why the A350-1000 is not selling well. The CASM of the 1000 is very similar to the smaller 900 length. This is fairly unique as in most families the longer variant has better CASM. If two aircraft have equal CASM the sales are always heavily in favour to the smaller aircraft.

The 787-10 requires 7% more thrust than the 787-9. Both have the same MTOW just extra fuselage drag. So a stretched A350-1100 might require 103klb of thrust or suffer reduced performance. In theory the A350-1100 would have better CASM than both the 900 and 1000 model but airlines demand a minimum improvement in CASM to satisfy the risk of extra capacity.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 10:03 pm

lightsaber wrote:
Waterbomber wrote:
There is no evidence to suggest that the B779 will burn less per seat than an A380.

The A380 is a 12 ton per hour aircraft and in terms of floor space, it is a 900+ seater in all Y configuration.
The B779 will only burn 12% less than the B77W ending up in the high 7 tons per hours as a max 600 seater.
CASM is much more than just fuel too and there are many high value maintenance expenses that cost as much regardless of the number of seats.
In terms of capital cost, Airbus should be able to match the B779 on price, again for 1.5 times more seats.
The A380 still offers per seat cost benefits over the B779 provided that the seats can be filled.
This is the tricky part. While most operators don't have a problem filling an A380 in the high season at high yields and virtually print loads of money, the issue is what do they do with it in the low season? Many carriers are choosing to go for smaller aircraft for this very reason.
Small aircraft can make a small profit in the low season and a medium profit in high season. So yes, they can be overall more profitable than operating an A380 with mega profits in the high season while operating at a loss in the low season.
However, at the same time, these smaller aircraft are shaping the market in favor of the A380. Has anyone noticed that high season tickets are now higher priced and more and more people are choosing to take holidays in the lower seasons?
Airlines operatinh smaller aircraft have to try to maximise the revenue of the lower amount of seats at their disposal by increasing fares in the high season.
This phenomenon will continue to reduce seasonality effects and spread traffic more evenly over the year as people are adapting.
At the same time, the A380 is becoming a cheaper aircraft to buy, so that it may become easier to park in the low season.

The 77W already burns less per seat in a 2 or 3 class. The 779 will burn 20% less per seat than the A388.

There is no high density A388 as you propose.

Do not count on Boeing missing promise.

http://www.opshots.net/2015/04/aircraft ... -expenses/

$140,000 of fuel for a 77W with 360 pax is $388 per passenger

$244,539 of fuel for the A388 for 591 pax is $413 per passenger.

Yes, because of other items, the A388 costs less per passenger.

You do realize the 779 will cut fuel burn to about $312 per passenger, cut maintenance about 10% thanks to predictive maintenance improvements, and cuts other expenses per passenger by merit if carrying 420 passengers rather than 360.

Sorry, but there is already evidence the A388 is a bit of a high fuel burner. Not surprising, it was developed in a world of sub $30/oil.

The 77W of today burns what, 6% less than at A380 launch.

I like the A380 concept, I just must be 4 to 10 meters longer to be efficient. It must receive engines at least as modern as the GE9x to be competitive.

Lightsaber


I just had a read of the article linked in the post. It does qualify the numbers against information from the internet, so I'd suggest the writer has not used primary data. As such, I would only use this information as a reference in general terms (which is probably the best we can do on A.Net).

I do question some of the numbers. I'd suggest the QANTAS A380 numbers could be skewed because of EFTPOS / diversion requirements which make the A380 fuel burn numbers look worse than what they actually are. I'd suggest from a starting point CASM for the A380 is on par with the 77W.

Notwithstanding, the economics of the A380 or for the matter long haul aircraft aren't that great. I think we have to remember with the advent of the ME3 and the Chinese airlines, long haul travel yields hit an almost immediate brick wall. If I remember correctly, in the midst of the QANTAS financial woes, ticket prices reduced by approximately 15%, whilst at the same time the price of fuel had substantial increases. I think it is fair to say there was a step change in market conditions, which almost immediately made some aircraft types obsolete.

For me, regardless of economics the business case for an A380 is limited.

If we again use QANTAS as an example, their twelve A380's with an average age of 9.2 years have a book value in the region of $1.2 billion. To put this in perspective the total book value of the QANTAS fleet including Jetstar consisting of 354 aircraft has a book value in the region of $7.5 billion. As such the 12 A380's represent 16% of the total value of all aircraft in the QANTAS fleet.

To further expand on the business case of the A380 we could argue, where Malaysia Airlines got 6 A380's, Tony Fernandes got Air Asia. This is probably why Alan Joyce once said he would have to be extremely drunk to order more A380's.

I'd suggest until such time long haul yields improve the business case for VLA aircraft with a limited market centered around Legacy Carriers will always be limited. From where I sit it could be another ten years before we see a paradigm shift in the market.

As such we are seeing legacy carriers order 787's on mass. This could be a consequence of the aircraft's broad appeal, just as much as it is its base economics. I think we are yet to see the P2P business model play out in the way it is was first envisaged when the 787 was first released,so we are simply seeing this aircraft type being brought because of its base economics and liquidity, the same reason why we are not seeing new orders for the A380.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 10:20 pm

flyingclrs727 wrote:
The GEnx doesn't have enough thrust. The GEnx-2B is about 8-10 thousand pounds of thrust short of the existing EA GP-7200. GE didn't even want to make a larger variant for the A350.


Sure it does. The GEnx-1B76 is rated to 76K lb-ft of thrust -- above the GP7270. You're correct about GE not wanting to go higher in thrust for the A350, but that was more about being unable or unwilling to scale up for the A350-1000, which was itself positioned to compete against the 777-300ER on which GE holds exclusive rights to supply engines.

A GEnx (or a Trent XWB) would be a fine engine choice for the A380 if the market actually existed to support the cost of certifying the new engines.

flyingclrs727 wrote:
The Engine Alliance engines were allowed on the A380 on the stipulation that they would not be offered for ETOPS applications like the proposed 767-400ERX. This limited the market for the EA engines and limited the opportunites for the EA to invest in upgrades to the EA engines. This was a blatently protectionist move by the EU to protect Airbus.


Actually I think it was more about protecting Rolls-Royce than Airbus, given that a combined GE-PW engine business probably would have had insurmountable technological and financial advantages.

Waterbomber wrote:
As for growing from below ie bigger narrowbodies, it's a nice story. But those bigger narrowbodies are not going to carry more pax unless feeding larger widebodies.


And those larger widebodies will appear by way of the 777-9, 777-8, A350-1000, A350-900, 787-10, etc. replacing 767s, A330s, and older 777s. The larger narrowbodies will also be feeding other larger narrowbodies -- just as we've seen at WN, where the airline has gone from zero 175-seat 737-800s to 230 in under six-and-a-half years; prior to that their largest planes seated 143.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 10:22 pm

I just don’t think it’s that complicated. The A380 is a technological marvel and a great airplane that is in a death spiral.

The “Mk.1” never made money and it’s been in the market long enough to be overtaken by competition. In order to stay competitive it requires a “Mk.2” upgrade NOBODY wants to pay for. It’s dead. The only question is how long it will take everybody to reach the same conclusion.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 10:59 pm

ScottB wrote:
flyingclrs727 wrote:
The GEnx doesn't have enough thrust. The GEnx-2B is about 8-10 thousand pounds of thrust short of the existing EA GP-7200. GE didn't even want to make a larger variant for the A350.


Sure it does. The GEnx-1B76 is rated to 76K lb-ft of thrust -- above the GP7270. You're correct about GE not wanting to go higher in thrust for the A350, but that was more about being unable or unwilling to scale up for the A350-1000, which was itself positioned to compete against the 777-300ER on which GE holds exclusive rights to supply engines.


That's a bleedless variant. It would take quite a bit of modification to add the bleed air equipment to that model. How much of a thrust hit would there be?
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Wed Oct 10, 2018 11:09 pm

travelhound wrote:
lightsaber wrote:
Waterbomber wrote:
There is no evidence to suggest that the B779 will burn less per seat than an A380.

The A380 is a 12 ton per hour aircraft and in terms of floor space, it is a 900+ seater in all Y configuration.
The B779 will only burn 12% less than the B77W ending up in the high 7 tons per hours as a max 600 seater.
CASM is much more than just fuel too and there are many high value maintenance expenses that cost as much regardless of the number of seats.
In terms of capital cost, Airbus should be able to match the B779 on price, again for 1.5 times more seats.
The A380 still offers per seat cost benefits over the B779 provided that the seats can be filled.
This is the tricky part. While most operators don't have a problem filling an A380 in the high season at high yields and virtually print loads of money, the issue is what do they do with it in the low season? Many carriers are choosing to go for smaller aircraft for this very reason.
Small aircraft can make a small profit in the low season and a medium profit in high season. So yes, they can be overall more profitable than operating an A380 with mega profits in the high season while operating at a loss in the low season.
However, at the same time, these smaller aircraft are shaping the market in favor of the A380. Has anyone noticed that high season tickets are now higher priced and more and more people are choosing to take holidays in the lower seasons?
Airlines operatinh smaller aircraft have to try to maximise the revenue of the lower amount of seats at their disposal by increasing fares in the high season.
This phenomenon will continue to reduce seasonality effects and spread traffic more evenly over the year as people are adapting.
At the same time, the A380 is becoming a cheaper aircraft to buy, so that it may become easier to park in the low season.

The 77W already burns less per seat in a 2 or 3 class. The 779 will burn 20% less per seat than the A388.

There is no high density A388 as you propose.

Do not count on Boeing missing promise.

http://www.opshots.net/2015/04/aircraft ... -expenses/

$140,000 of fuel for a 77W with 360 pax is $388 per passenger

$244,539 of fuel for the A388 for 591 pax is $413 per passenger.

Yes, because of other items, the A388 costs less per passenger.

You do realize the 779 will cut fuel burn to about $312 per passenger, cut maintenance about 10% thanks to predictive maintenance improvements, and cuts other expenses per passenger by merit if carrying 420 passengers rather than 360.

Sorry, but there is already evidence the A388 is a bit of a high fuel burner. Not surprising, it was developed in a world of sub $30/oil.

The 77W of today burns what, 6% less than at A380 launch.

I like the A380 concept, I just must be 4 to 10 meters longer to be efficient. It must receive engines at least as modern as the GE9x to be competitive.

Lightsaber


I just had a read of the article linked in the post. It does qualify the numbers against information from the internet, so I'd suggest the writer has not used primary data. As such, I would only use this information as a reference in general terms (which is probably the best we can do on A.Net).

I do question some of the numbers. I'd suggest the QANTAS A380 numbers could be skewed because of EFTPOS / diversion requirements which make the A380 fuel burn numbers look worse than what they actually are. I'd suggest from a starting point CASM for the A380 is on par with the 77W.

Notwithstanding, the economics of the A380 or for the matter long haul aircraft aren't that great. I think we have to remember with the advent of the ME3 and the Chinese airlines, long haul travel yields hit an almost immediate brick wall. If I remember correctly, in the midst of the QANTAS financial woes, ticket prices reduced by approximately 15%, whilst at the same time the price of fuel had substantial increases. I think it is fair to say there was a step change in market conditions, which almost immediately made some aircraft types obsolete.

For me, regardless of economics the business case for an A380 is limited.

If we again use QANTAS as an example, their twelve A380's with an average age of 9.2 years have a book value in the region of $1.2 billion. To put this in perspective the total book value of the QANTAS fleet including Jetstar consisting of 354 aircraft has a book value in the region of $7.5 billion. As such the 12 A380's represent 16% of the total value of all aircraft in the QANTAS fleet.

To further expand on the business case of the A380 we could argue, where Malaysia Airlines got 6 A380's, Tony Fernandes got Air Asia. This is probably why Alan Joyce once said he would have to be extremely drunk to order more A380's.

I'd suggest until such time long haul yields improve the business case for VLA aircraft with a limited market centered around Legacy Carriers will always be limited. From where I sit it could be another ten years before we see a paradigm shift in the market.

As such we are seeing legacy carriers order 787's on mass. This could be a consequence of the aircraft's broad appeal, just as much as it is its base economics. I think we are yet to see the P2P business model play out in the way it is was first envisaged when the 787 was first released,so we are simply seeing this aircraft type being brought because of its base economics and liquidity, the same reason why we are not seeing new orders for the A380.

Please post better numbers. It is easy to keep saying those aren't good enough. However, they are within a few percent of proprietary numbers I've seen. For a decade we've noted the CASK break even is when oil hits $150/bbl.

The T900 was burning more fuel on long missions than the GP7200 before the PIP.

The evidence points to the 777-300ER having a cost advantage, otherwise BA, AF, JAL, ANA, UA, DL and others would have bought more.

The mk2 777 beat the A388 in the market. Now the mk3 is due in 2 years. That doesn't bode well...

What matters is can EK earn enough of a revenue premium (e.g., the bar) to reorder.

Lightsaber
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 12:05 am

lightsaber wrote:
travelhound wrote:
lightsaber wrote:
The 77W already burns less per seat in a 2 or 3 class. The 779 will burn 20% less per seat than the A388.

There is no high density A388 as you propose.

Do not count on Boeing missing promise.

http://www.opshots.net/2015/04/aircraft ... -expenses/

$140,000 of fuel for a 77W with 360 pax is $388 per passenger

$244,539 of fuel for the A388 for 591 pax is $413 per passenger.

Yes, because of other items, the A388 costs less per passenger.

You do realize the 779 will cut fuel burn to about $312 per passenger, cut maintenance about 10% thanks to predictive maintenance improvements, and cuts other expenses per passenger by merit if carrying 420 passengers rather than 360.

Sorry, but there is already evidence the A388 is a bit of a high fuel burner. Not surprising, it was developed in a world of sub $30/oil.

The 77W of today burns what, 6% less than at A380 launch.

I like the A380 concept, I just must be 4 to 10 meters longer to be efficient. It must receive engines at least as modern as the GE9x to be competitive.

Lightsaber


I just had a read of the article linked in the post. It does qualify the numbers against information from the internet, so I'd suggest the writer has not used primary data. As such, I would only use this information as a reference in general terms (which is probably the best we can do on A.Net).

I do question some of the numbers. I'd suggest the QANTAS A380 numbers could be skewed because of EFTPOS / diversion requirements which make the A380 fuel burn numbers look worse than what they actually are. I'd suggest from a starting point CASM for the A380 is on par with the 77W.

Notwithstanding, the economics of the A380 or for the matter long haul aircraft aren't that great. I think we have to remember with the advent of the ME3 and the Chinese airlines, long haul travel yields hit an almost immediate brick wall. If I remember correctly, in the midst of the QANTAS financial woes, ticket prices reduced by approximately 15%, whilst at the same time the price of fuel had substantial increases. I think it is fair to say there was a step change in market conditions, which almost immediately made some aircraft types obsolete.

For me, regardless of economics the business case for an A380 is limited.

If we again use QANTAS as an example, their twelve A380's with an average age of 9.2 years have a book value in the region of $1.2 billion. To put this in perspective the total book value of the QANTAS fleet including Jetstar consisting of 354 aircraft has a book value in the region of $7.5 billion. As such the 12 A380's represent 16% of the total value of all aircraft in the QANTAS fleet.

To further expand on the business case of the A380 we could argue, where Malaysia Airlines got 6 A380's, Tony Fernandes got Air Asia. This is probably why Alan Joyce once said he would have to be extremely drunk to order more A380's.

I'd suggest until such time long haul yields improve the business case for VLA aircraft with a limited market centered around Legacy Carriers will always be limited. From where I sit it could be another ten years before we see a paradigm shift in the market.

As such we are seeing legacy carriers order 787's on mass. This could be a consequence of the aircraft's broad appeal, just as much as it is its base economics. I think we are yet to see the P2P business model play out in the way it is was first envisaged when the 787 was first released,so we are simply seeing this aircraft type being brought because of its base economics and liquidity, the same reason why we are not seeing new orders for the A380.

Please post better numbers. It is easy to keep saying those aren't good enough. However, they are within a few percent of proprietary numbers I've seen. For a decade we've noted the CASK break even is when oil hits $150/bbl.

The T900 was burning more fuel on long missions than the GP7200 before the PIP.

The evidence points to the 777-300ER having a cost advantage, otherwise BA, AF, JAL, ANA, UA, DL and others would have bought more.

The mk2 777 beat the A388 in the market. Now the mk3 is due in 2 years. That doesn't bode well...

What matters is can EK earn enough of a revenue premium (e.g., the bar) to reorder.

Lightsaber



The B787's broad appeal is that it doesn't lose money in the winter.
The A380 does.
JAL will replace the domestic B777 by smaller A359.

Airlines are optimising capacity around the low season as opposed to trying to make a killing only in the high season.
The strategy has some merits to it, but it also brings risks.
Airlines are stabilising their profits rather than trying to earn the most possible from every route.
The risks are higher overhead costs per seat (think marketing costs, presence at outstations, etc...), congesting their own hubs, bad value perception, and losing relevance on the routes and their own hub.

It's a short-sighted strategy.
An airline is much more than making a stable profit on every route it operates.

I think that in 20 years time, there could be a major advance in aircraft propulsion. So much so that fuel burn and fuel cost becomes an irrelevant part of a ticket price.
When fuel burn and fuel prices will no longer be a factor, airlines will be scrambling to get the biggest and best aircraft possible.
At that moment, the B787 will become obsolete and the A380 will be the default platform.
Last edited by Waterbomber on Thu Oct 11, 2018 12:11 am, edited 1 time in total.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 12:09 am

Noshow wrote:
Let's move away from programs to the overall market for a second:
Air traffic keeps growing, infrastructure gets congested, industry is consolidating. This is no PR-spin these seem to be the facts.
This is why I see a future need for big aircraft. Maybe we have not the right ones for the real big size?


Its called the Boeing 777-10X.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 1:12 am

Waterbomber wrote:
lightsaber wrote:
travelhound wrote:

I just had a read of the article linked in the post. It does qualify the numbers against information from the internet, so I'd suggest the writer has not used primary data. As such, I would only use this information as a reference in general terms (which is probably the best we can do on A.Net).

I do question some of the numbers. I'd suggest the QANTAS A380 numbers could be skewed because of EFTPOS / diversion requirements which make the A380 fuel burn numbers look worse than what they actually are. I'd suggest from a starting point CASM for the A380 is on par with the 77W.

Notwithstanding, the economics of the A380 or for the matter long haul aircraft aren't that great. I think we have to remember with the advent of the ME3 and the Chinese airlines, long haul travel yields hit an almost immediate brick wall. If I remember correctly, in the midst of the QANTAS financial woes, ticket prices reduced by approximately 15%, whilst at the same time the price of fuel had substantial increases. I think it is fair to say there was a step change in market conditions, which almost immediately made some aircraft types obsolete.

For me, regardless of economics the business case for an A380 is limited.

If we again use QANTAS as an example, their twelve A380's with an average age of 9.2 years have a book value in the region of $1.2 billion. To put this in perspective the total book value of the QANTAS fleet including Jetstar consisting of 354 aircraft has a book value in the region of $7.5 billion. As such the 12 A380's represent 16% of the total value of all aircraft in the QANTAS fleet.

To further expand on the business case of the A380 we could argue, where Malaysia Airlines got 6 A380's, Tony Fernandes got Air Asia. This is probably why Alan Joyce once said he would have to be extremely drunk to order more A380's.

I'd suggest until such time long haul yields improve the business case for VLA aircraft with a limited market centered around Legacy Carriers will always be limited. From where I sit it could be another ten years before we see a paradigm shift in the market.

As such we are seeing legacy carriers order 787's on mass. This could be a consequence of the aircraft's broad appeal, just as much as it is its base economics. I think we are yet to see the P2P business model play out in the way it is was first envisaged when the 787 was first released,so we are simply seeing this aircraft type being brought because of its base economics and liquidity, the same reason why we are not seeing new orders for the A380.

Please post better numbers. It is easy to keep saying those aren't good enough. However, they are within a few percent of proprietary numbers I've seen. For a decade we've noted the CASK break even is when oil hits $150/bbl.

The T900 was burning more fuel on long missions than the GP7200 before the PIP.

The evidence points to the 777-300ER having a cost advantage, otherwise BA, AF, JAL, ANA, UA, DL and others would have bought more.

The mk2 777 beat the A388 in the market. Now the mk3 is due in 2 years. That doesn't bode well...

What matters is can EK earn enough of a revenue premium (e.g., the bar) to reorder.

Lightsaber



The B787's broad appeal is that it doesn't lose money in the winter.
The A380 does.
JAL will replace the domestic B777 by smaller A359.

Airlines are optimising capacity around the low season as opposed to trying to make a killing only in the high season.
The strategy has some merits to it, but it also brings risks.
Airlines are stabilising their profits rather than trying to earn the most possible from every route.
The risks are higher overhead costs per seat (think marketing costs, presence at outstations, etc...), congesting their own hubs, bad value perception, and losing relevance on the routes and their own hub.

It's a short-sighted strategy.
An airline is much more than making a stable profit on every route it operates.

We going off topic as to all the reasons the A380 didn't sell.

I'm pointing out how with higher oil EK won't make as much profit with the A380.

I calculate 14% more profit per flight with a 779. I calculate about the same profit per flight or a few percent more with the A35K than an A380. That is over a year with little down time.

I provided background to my numbers. I'd like to know the numbers behind your thinking. For the A388 competes with the mk2 777 and now has much more profitable competition.

Lightsaber
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travelhound
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 2:34 am

lightsaber wrote:
Waterbomber wrote:
lightsaber wrote:
Please post better numbers. It is easy to keep saying those aren't good enough. However, they are within a few percent of proprietary numbers I've seen. For a decade we've noted the CASK break even is when oil hits $150/bbl.

The T900 was burning more fuel on long missions than the GP7200 before the PIP.

The evidence points to the 777-300ER having a cost advantage, otherwise BA, AF, JAL, ANA, UA, DL and others would have bought more.

The mk2 777 beat the A388 in the market. Now the mk3 is due in 2 years. That doesn't bode well...

What matters is can EK earn enough of a revenue premium (e.g., the bar) to reorder.

Lightsaber



The B787's broad appeal is that it doesn't lose money in the winter.
The A380 does.
JAL will replace the domestic B777 by smaller A359.

Airlines are optimising capacity around the low season as opposed to trying to make a killing only in the high season.
The strategy has some merits to it, but it also brings risks.
Airlines are stabilising their profits rather than trying to earn the most possible from every route.
The risks are higher overhead costs per seat (think marketing costs, presence at outstations, etc...), congesting their own hubs, bad value perception, and losing relevance on the routes and their own hub.

It's a short-sighted strategy.
An airline is much more than making a stable profit on every route it operates.

We going off topic as to all the reasons the A380 didn't sell.

I'm pointing out how with higher oil EK won't make as much profit with the A380.

I calculate 14% more profit per flight with a 779. I calculate about the same profit per flight or a few percent more with the A35K than an A380. That is over a year with little down time.

I provided background to my numbers. I'd like to know the numbers behind your thinking. For the A388 competes with the mk2 777 and now has much more profitable competition.

Lightsaber


I wasn't disagreeing with your post or the intent being made. From where I sit there are a lot of numbers out there, with very few allowing us to come to a definant conclusion.

On the whole I agree with your post. I would argue with the in service of the A350 the 77W is now almost obsolete. With the 77W being a far more successful plane than the A380, we shouldnt have too many problems coming to similar conclusions about it as well. As such my conclusions are similar to yours. I just got there a different way.

I would like to reinforce your conclusions about the A380 business case. There are other newer plane options out there that simply make more business sense. The only caveat I have is that smaller is likely going to be more popular than bigger.
 
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 2:43 am

they could order a version powered by the Trent 1000 or...... if they want to go down the stretch path the Trent xwb. The wing was designed to support a stretch, airbus's design cost will be minimal. Truth being known they already have the larger design plans done. just do the cheap solution..... what Boeing did with the 747-400. the worlds airlines are changing. we don't need as many of them. get the CASM down and you'll start seeing carriers like cathay and United sign up. But thats the key. if the smaller jets get similar seat mile costs theres less risk and a reduce in capacity rises average ticket prices. thats why we are seeing the likes of Norwegian an Jetstar fly long haul. It must have a BIG cost difference.
 
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Revelation
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 2:56 am

Lufthansa wrote:
they could order a version powered by the Trent 1000 or...... if they want to go down the stretch path the Trent xwb. The wing was designed to support a stretch, airbus's design cost will be minimal. Truth being known they already have the larger design plans done. just do the cheap solution..... what Boeing did with the 747-400. the worlds airlines are changing. we don't need as many of them. get the CASM down and you'll start seeing carriers like cathay and United sign up. But thats the key. if the smaller jets get similar seat mile costs theres less risk and a reduce in capacity rises average ticket prices. thats why we are seeing the likes of Norwegian an Jetstar fly long haul. It must have a BIG cost difference.

We went through all of this three years ago, and the outcome was Airbus Sees Revamp of Superjumbo After 2022 Amid Slow A380 Sales which says:

It may be almost a decade or longer before Airbus Group SE debuts an improved version of its little-loved A380 superjumbo jet as the European planemaker tries to convince airlines that there’s demand for such a large plane, the chief executive officer of the airliner unit said.

Some carriers “don’t love the A380” because many have become more conservative in recent years, focusing on protecting market share rather than expanding with larger planes, Airbus CEO Fabrice Bregier said Thursday at the monthly Wings Club luncheon in New York. A newer model, which could feature a stretched cabin and improved engines, probably won’t be available until after 2022, he said.

So if Airbus's CEO was saying a NEO won't happen till after 2022 then we should probably stop suggesting there is a cheap and easy solution to be had.

If you recall from July 2017 Paris Air Show: Emirates' Clark concerned about A380 continuity the big concern was the continuity of the program:

Emirates President Tim Clark has said he "wants to know what Airbus will do with the programme" suggesting he is not ready to back the A380 unless the manufacturer can provide assurances over the programme's long term viability and sell the aircraft to more airlines.

“I’m concerned about continuity of production,” Clark told reporters at a media briefing during the Paris Airshow. “We’ll need to retire aircraft fairly soon and we would probably take some more. But I don’t want to be left with a pup. I don’t want to be left with aeroplanes that are headed for obsolescence,” he was quoted as saying by Bloomberg.

So the concern really isn't about A380neo, the concern is keeping A380 alive till after 2022 so there might be an A380neo.
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AvObserver
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 3:10 am

[quote="Waterbomber"
I think that in 20 years time, there could be a major advance in aircraft propulsion. So much so that fuel burn and fuel cost becomes an irrelevant part of a ticket price.
When fuel burn and fuel prices will no longer be a factor, airlines will be scrambling to get the biggest and best aircraft possible.
At that moment, the B787 will become obsolete and the A380 will be the default platform.[/quote]
In 20 years, the A380 will also be obsolete, if indeed still in production. Without substantial modifications, it will no longer be a relevant platform. Your postulation that they can make a twin of it seems unlikely. A complete wing redesign and maybe elevation to add clearance for the surely unprecedentedly large engines? That's a tall order for a program just barely coasting along at a minimum rate and with few new orders in sight. And do you really think a major propulsion advance will find a most ready home on such a by then aged platform? Unlikely. I think. VLA's may make a comeback and proliferate by then but on entirely new and optimized platforms, maybe with novel fuselage and wing designs to save even more fuel. I can understand you having an affinity for the magnificent A380 but I just don't think there will be a place for new build examples in 20 years with all of the advances we can likely expect in that timeframe. Seems to me whatever mods it will need would be so major, it would be better to start out with a clean sheet design.
 
EChid
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 3:43 am

ScottB wrote:
But really there's only one aspect of the luxury branding which would be unique to the A380, and that's the upper deck. Everything else you cite can be implemented on the 777 or A350 or 787. Heck, we even see suites on the A321. Even if A380 production were to cease tomorrow, EK would still have decades of life left in the A380 fleet -- a very long time to promote every other aspect of luxury they offer. In the end, their brand is Emirates, not A380, and they should promote the brand they control.


I would argue that right now Emirates is very much the A380, and intentionally. You're right otherwise though, but my argument wasn't that EK can't ever shift their marketing, just that there has to be a consideration made for the value that their current product offers.

As for showers and such, several people have stated that its possible on A350s and 77s. So then, why has no one done it? EK is rolling out great new 77 products, so why not that as well? It would make their product much more consistent. But I think if they did, would start knocking CASM down to some ugly figures that might be uncomfortably close to A380 numbers.
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 4:51 am

I would argue that right now Emirates is very much the A380, and intentionally. You're right otherwise though, but my argument wasn't that EK can't ever shift their marketing, just that there has to be a consideration made for the value that their current product offers.

As for showers and such, several people have stated that its possible on A350s and 77s. So then, why has no one done it? EK is rolling out great new 77 products, so why not that as well? It would make their product much more consistent. But I think if they did, would start knocking CASM down to some ugly figures that might be uncomfortably close to A380 numbers.[/quote]

Right here in BNE.... it's the time everyone goes to Europe to enjoy the Southern European summer. There's many many choices. I spoke to a friend about a month ago who is a dr. I, well would have gone myself but have too much going on to leave, as him which carrier are you taking? His reply..... don't be stupid EK. About 3 hours later a BMW arrived, thanks to emirates to pick him up after we finished our dinner and he was on his way to Rome. He could have flown everyone from Air China, China Airlines, Thai International, and even Air Canada but everyone wants to pick EK. If you think the A380 doesn't draw a crowd on certain routes think again. Some of those carriers offer tickets thousands of dollars cheaper than Emirates but EK goes out full on that flight every night. That upper deck is always full. And having drinks in that lounge at the back is like a private jet but with a lot more staff. Everybody has a great time. As good as they are.... the 787 and A350 haven't stamped this market out. They have their place. But remember the 747-100/200 had a hard time getting traction initially too.... it was only the -400 that really saw things take off. And by the way....the 779 isn't exactly selling well..... its main customer is the same company Emirates.... everybody says is crazy.
 
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seahawk
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 5:19 am

Waterbomber wrote:
lightsaber wrote:
travelhound wrote:

I just had a read of the article linked in the post. It does qualify the numbers against information from the internet, so I'd suggest the writer has not used primary data. As such, I would only use this information as a reference in general terms (which is probably the best we can do on A.Net).

I do question some of the numbers. I'd suggest the QANTAS A380 numbers could be skewed because of EFTPOS / diversion requirements which make the A380 fuel burn numbers look worse than what they actually are. I'd suggest from a starting point CASM for the A380 is on par with the 77W.

Notwithstanding, the economics of the A380 or for the matter long haul aircraft aren't that great. I think we have to remember with the advent of the ME3 and the Chinese airlines, long haul travel yields hit an almost immediate brick wall. If I remember correctly, in the midst of the QANTAS financial woes, ticket prices reduced by approximately 15%, whilst at the same time the price of fuel had substantial increases. I think it is fair to say there was a step change in market conditions, which almost immediately made some aircraft types obsolete.

For me, regardless of economics the business case for an A380 is limited.

If we again use QANTAS as an example, their twelve A380's with an average age of 9.2 years have a book value in the region of $1.2 billion. To put this in perspective the total book value of the QANTAS fleet including Jetstar consisting of 354 aircraft has a book value in the region of $7.5 billion. As such the 12 A380's represent 16% of the total value of all aircraft in the QANTAS fleet.

To further expand on the business case of the A380 we could argue, where Malaysia Airlines got 6 A380's, Tony Fernandes got Air Asia. This is probably why Alan Joyce once said he would have to be extremely drunk to order more A380's.

I'd suggest until such time long haul yields improve the business case for VLA aircraft with a limited market centered around Legacy Carriers will always be limited. From where I sit it could be another ten years before we see a paradigm shift in the market.

As such we are seeing legacy carriers order 787's on mass. This could be a consequence of the aircraft's broad appeal, just as much as it is its base economics. I think we are yet to see the P2P business model play out in the way it is was first envisaged when the 787 was first released,so we are simply seeing this aircraft type being brought because of its base economics and liquidity, the same reason why we are not seeing new orders for the A380.

Please post better numbers. It is easy to keep saying those aren't good enough. However, they are within a few percent of proprietary numbers I've seen. For a decade we've noted the CASK break even is when oil hits $150/bbl.

The T900 was burning more fuel on long missions than the GP7200 before the PIP.

The evidence points to the 777-300ER having a cost advantage, otherwise BA, AF, JAL, ANA, UA, DL and others would have bought more.

The mk2 777 beat the A388 in the market. Now the mk3 is due in 2 years. That doesn't bode well...

What matters is can EK earn enough of a revenue premium (e.g., the bar) to reorder.

Lightsaber



The B787's broad appeal is that it doesn't lose money in the winter.
The A380 does.
JAL will replace the domestic B777 by smaller A359.

Airlines are optimising capacity around the low season as opposed to trying to make a killing only in the high season.
The strategy has some merits to it, but it also brings risks.
Airlines are stabilising their profits rather than trying to earn the most possible from every route.
The risks are higher overhead costs per seat (think marketing costs, presence at outstations, etc...), congesting their own hubs, bad value perception, and losing relevance on the routes and their own hub.

It's a short-sighted strategy.
An airline is much more than making a stable profit on every route it operates.



You are looking a the individual plane not the fleet. More smaller aircraft improve your flexibility and you can adjust to the market much easier. You can schedule maintenance events in the low season or you can keep some older planes as back-up, that cost no money when stored during winter. If you have them you are even in a better position to counter any problems encountered during daily ops and the number of flights that are cancelled is reduced.
 
pa747sp
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 6:30 am

EChid wrote:
The criticism of the A380 and the suggestion that it should be shut down in this thread is all fair, but I think the people that have highlighted the emotional aspect of this have a more interesting insight. By that I'm not meaning that the purchases and decisions are emotional, but that there is a value of brand image to maintain.

EK has worked extremely hard on that, so to millions around the world, EK means in-flight showers, first-class suites, and upper deck luxury. It's their brand. Yes, few will experience that, and the 777s can partially replace some of those aspects, but the A380 is closely linked to their brand. People know it and dream of being on it. That's awfully powerful. It doesn't mean it has to be their brand forever, but there is monetary value in that brand, and aspirational value because it directs people to purchase EK flights (even if just Y or J) when they may have pleanty of cheaper options, and that has to be part of their consideration when they make investment decisions.

The one thing anet seems to forget about sometimes is the value of branding, and it's a powerful thing in the airline industry and part of the reason EK does so well.

Additionally, EK is already struggling to find pilots. They make not be super excited about reducing capacity and increasing frequencies as a way forward, especially since the pilot shortage doesn't show any signs of getting better. That said, they've clearly stated that they are prepared to make the 779 their flagship if need be.


I will second this. The A380 is a powerful selling tool. From first hand experience a surprising number of passengers will choose to fly with EK simply because of the A380. I've never had a passenger stipulate that they want to fly on a 777 operated EK flight, but plenty say they want an A380 operated EK flight.

If low cost carriers continue to make inroads into long haul travel, it could be an increasingly valuable product differentiation.
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rlwynn
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 7:43 am

The 747 was designed as a freighter first and foremost, .


That is not true at all.
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Channex757
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 8:13 am

I see a lot of reasoned figures coming out above, but is everyone taking into account that the RR/EK A380s coming off the line at the moment are the circa 600 seat ones? The new Mercedes-esque interior variant with blond woods instead of the garish variety.

It seems they are happy with the existing number of first class equipped aircraft and are instead taking the higher capacity ones. Another part of the equation is noise. I live under a departure track where a lunchtime flight is on a First equipped aircraft, invariably with the EA motors. Later in the day a high capacity RR one passes over and it is definitely quieter. The PW fan is much more of a growler.

Might this also play in to the deal? EK operates into many noise-constrained airports.
 
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Slug71
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 8:42 am

ScottB wrote:
A GEnx (or a Trent XWB) would be a fine engine choice for the A380 if the market actually existed to support the cost of certifying the new engines.


The TXWB is too heavy, but the T7000 will work.
 
Noshow
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 8:52 am

GE is a risk sharing partner on the 777X program. Chances are low to see some GEnx on any A380.
 
marcelh
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 9:59 am

Noshow wrote:
GE is a risk sharing partner on the 777X program. Chances are low to see some GEnx on any A380.


IMO the 777X isn’t a true competitor for the A380. At least not at Emirates.
 
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Revelation
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 1:10 pm

marcelh wrote:
Noshow wrote:
GE is a risk sharing partner on the 777X program. Chances are low to see some GEnx on any A380.

IMO the 777X isn’t a true competitor for the A380. At least not at Emirates.

Yet the primary reason STC is balking about taking more A380s with fuel burn shortfalls has to be fear of being undermined by more efficient competitors.

He said as much already ( ref: #137 above ):

Emirates President Tim Clark has said he "wants to know what Airbus will do with the programme" suggesting he is not ready to back the A380 unless the manufacturer can provide assurances over the programme's long term viability and sell the aircraft to more airlines.

“I’m concerned about continuity of production,” Clark told reporters at a media briefing during the Paris Airshow. “We’ll need to retire aircraft fairly soon and we would probably take some more. But I don’t want to be left with a pup. I don’t want to be left with aeroplanes that are headed for obsolescence,” he was quoted as saying by Bloomberg.

IMHO it's hard to avoid the conclusion that 777X is a competitor at EK.

His choices will be to keep ordering large numbers of A380s and hope that perceived marketing advantages overcome the fuel burn disadvantage and the poor resale market, or lock in the superior fuel burn and traditionally active resale market of 777 family and find a creative way to market the 777X to customers.

If he wasn't worried about the competitors and was all in on A380 we would not see him missing the engine ordering deadline, IMHO.
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Qf648
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 1:41 pm

pa747sp wrote:
EChid wrote:
The criticism of the A380 and the suggestion that it should be shut down in this thread is all fair, but I think the people that have highlighted the emotional aspect of this have a more interesting insight. By that I'm not meaning that the purchases and decisions are emotional, but that there is a value of brand image to maintain.

EK has worked extremely hard on that, so to millions around the world, EK means in-flight showers, first-class suites, and upper deck luxury. It's their brand. Yes, few will experience that, and the 777s can partially replace some of those aspects, but the A380 is closely linked to their brand. People know it and dream of being on it. That's awfully powerful. It doesn't mean it has to be their brand forever, but there is monetary value in that brand, and aspirational value because it directs people to purchase EK flights (even if just Y or J) when they may have pleanty of cheaper options, and that has to be part of their consideration when they make investment decisions.

The one thing anet seems to forget about sometimes is the value of branding, and it's a powerful thing in the airline industry and part of the reason EK does so well.

Additionally, EK is already struggling to find pilots. They make not be super excited about reducing capacity and increasing frequencies as a way forward, especially since the pilot shortage doesn't show any signs of getting better. That said, they've clearly stated that they are prepared to make the 779 their flagship if need be.


I will second this. The A380 is a powerful selling tool. From first hand experience a surprising number of passengers will choose to fly with EK simply because of the A380. I've never had a passenger stipulate that they want to fly on a 777 operated EK flight, but plenty say they want an A380 operated EK flight.

If low cost carriers continue to make inroads into long haul travel, it could be an increasingly valuable product differentiation.


Totally agree with this the A388 is a great plane to fly on. Ive had QF pilots (Boeing fanboy actually) remark that is is great if you're a passenger. Would seek out a A388 for that alone, Im tall and I like space.

But I recently did the PER-LHR flight on the 787, returning on QF2 (A388 Singapore). 4 of us travelling as a family. All of us agreed after that we would do the direct flight no question after.

The one stop to a destination ended up being a PITA. Just having to get off the plane, take a slash, get re-screened, get told to dump items (which passed screening in LHR) was an eye opener in SIN. I also lamented the lack of DXB (which was actually better on the re screen) on the return journey, The trip SIN->SYD is 7.5 hours, so by the time they got everyone settled it was only about 3 hours of sleep. The old DXB route gave you 12 hours - and a good night sleep in comparison.

Think QF is onto a winner with project sunrise, as much as I hate to say it, because I really do like the whale.

I'd like to think it has a future, on high density routes to and from the US and Asia the trick is to be able to fill the bloody thing.
 
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Matt6461
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Re: Bloomberg: A380-Saving Emirates Deal Is Stalled Due to Engine Impasse

Thu Oct 11, 2018 1:55 pm

Revelation wrote:
You don't seem to be considering how much money they will be giving away by flying A380s while their competitors fly A350-1000/777-9.


A380 is worse on cash operating costs than the big new twins but basically even when acquisition cost comes in.
A380 gets you ~52% more capacity than 779 for maybe 15% higher price. That's a sucky deal for Airbus of course - and explains why they keep losing money here - but it's the only thing makes the A380 remotely attractive.

IMO the 20+16 deal showed that EK is somewhat desperate to keep the A380 alive. STC is now looking at 2030 for a transfer to DWC and even that seems doubtful. So if EK wants to grow or just maintain its scale it absolutely needs the A380.

An EK that no longer has an intrinsic fleet-efficiency advantage (as it did/does with A380/77W versus older competition) is still an airline with an intrinsic labor cost advantage and tremendous brand value and network momentum.

There's of course some operating efficiency hit that even EK can't take to maintain its scale, but I'll be surprised if the margin for that hit exceeds the minuscule fuel burn figures usually offered by a PIP. I'd guess EK and RR find a way to work this out - EK is under the gun here, not RR and/or EA/GE/PW.

Lightsaber wrote:
This order is now void.


What you makes you so seemingly sure that the contract has been breached? Is it a surmise from the long-lead items or an inference from what has been reported?

It would seem strange to me if airliner sales contracts were drafted in such a way that any delay-inducing holdup with third parties (i.e. engine OEM) would emancipate the parties. That would invite strategic delay by a buyer who had second thoughts.
Were I drafting these sales contracts, there'd be a section setting forth what happens if third-party issues make delivery on the envisioned terms impractical. Liquidated damages to the airframe OEM, for example, on top of delayed persistence of all obligations under the contract.

But I'm just asking because I don't have deep knowledge here.
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