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Revelation
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Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 11:50 am

https://www.reuters.com/article/us-airb ... SKBN1OC16X says:

Airbus has launched a strategic review to outline changes under incoming chief executive Guillaume Faury as it faces industrial challenges and prepares for overdue modernization, industry sources said.

The “Airbus Next Chapter” review involves a team of planners working outside the normal strategy organization in pursuit of a break from years of industrial problems, management feuds and an ongoing bribery scandal.

Should be interesting to see what comes out of this.

Some comments about production and workshare issues:

The review may address how Airbus can meet demand by sharply ramping up production of jets like its A320. One previous taboo that may come up for discussion is a fragmented production system securing jobs in Britain, France, Germany and Spain.

Executives are warning Airbus must not find itself lacking in proven technology for the A320’s successor after 2030, as it had been in wide-bodies when Boeing launched its 787.

For now, Airbus is winning a bigger slice of the market on the A320 but some analysts say it has fallen behind Boeing in manufacturing techniques - a gap that could grow if Boeing launches a mid-market jet with a new factory system.

The article mentions the ongoing stream of retirements (Alonzo's successor named, Evrard, etc) and the challenges to recruit talent when Silicon Valley is so alluring, and use of an external firm traditionally known for recruiting.

It'll be interesting to see if this is just sizzle, or if there is some bacon too.

I think it will be a big part of the transition from Enders to Faury.
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TropicalSky
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 12:57 pm

I wish them well! The industry needs a strong Airbus to keep Boeing honest....but I do believe Airbus will be playing catch up to Boeing on NSA. MoM just seems like it can't come of the drawings boards due to the A321 incremental improvement changes
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:08 pm

TropicalSky wrote:
I wish them well! The industry needs a strong Airbus to keep Boeing honest....but I do believe Airbus will be playing catch up to Boeing on NSA. MoM just seems like it can't come of the drawings boards due to the A321 incremental improvement changes

I found it interesting how focused it was on the narrowbody family when you can make the argument that Airbus is leaving the most money on the table in the widebody space.

Amazingly, despite the focus on narrowbody, no mention of A320.5 or A322 either! :biggrin:

Also I have to wonder whether this review will result in strategy changes for A380, rather then the "holding pattern" it finds itself in today.
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FatCat
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:22 pm

it is a fascinating battle indeed.
too bad there are only two players involved.
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bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:27 pm

Some people around here warned that to a degree the NEO type programs at both builders carry long term strategic risk that in the heroine like drug rush of orders gets ignored. No one wants to hear it.

There is no real debate that doing the new engines on narrows made sense. It chopped the kneees off of all potential competitors and trashed two potential competitors in BBD and EMB.

But the A330neo was a huge strategic mistake that will ave multi decade consequence. Airbus thought to get a pile of orders on the cheap but gave no thought to the long term problem of just where would it innovate prior to whatever comes after the A320neo.

I can’t imagine given the huge industrial challenges that will be there when you go you repalce the narrowbody product that either airframer will be looking to do a ton of innovation on either the planes or the production system. Some of us have argued that NMA is almost as much about having a space for doing this as anything.

Everything IMHO comes down to how both companies get from where they are today to a new narrowbody without killing themselves in the process. I see what Boeing is doing. I don’t yet see a clear path at Airbus.

Then again I am sure this review and the analyst mentioned are all fake news or FUD.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:32 pm

bigjku wrote:
Then again I am sure this review and the analyst mentioned are all fake news or FUD.

Yep, I'm prepared to read about that "tabloid" Reuters and the "fake" industry sources it uses.
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FatCat
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:34 pm

imho
737 is 40 years old
320 is 30 years old
both designs are ageing and, while they can perfectly (ish) fit in today's markets, both players will need brand new designs in the next 10 - 15 years.

imho
330neo was not a mistake. it is clear that the most successful widebody of airbus needs some improvements. it's the natural evolution of a machine. they do not have many orders, but many will come, as older 330s and the handful of 340s still flying will be replaced either by 350s or 330neos - if not by 787s.
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N14AZ
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:43 pm

bigjku wrote:
mistake that will ave multi decade consequence.

What a nice idea to "write" in French spoken language in a thread about Airbus :')))))))) ... just kidding ...

bigjku wrote:
But the A330neo was a huge strategic mistake that will ave multi decade consequence.

I am not sure if it was a strategic mistake or if they lost too much time for implementing this project. With the first deliveries starting now whereas there are already more than 787 B787s out there it seems that they are simply too late.

PS.: I just figured, over the years here at a.net, I developed a new gift: I can identify the thread opener by just reading the thread title. If it is about the A32X-whatsoever it's someone who likes to put this ugly fly onto his pictures, if it's about Airbus company affairs... well, there is always a new relevation ;-) .... just kidding, not meant to be offensive or snippy ... happy Christmas to everyone.
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:45 pm

Revelation wrote:
TropicalSky wrote:
I wish them well! The industry needs a strong Airbus to keep Boeing honest....but I do believe Airbus will be playing catch up to Boeing on NSA. MoM just seems like it can't come of the drawings boards due to the A321 incremental improvement changes

I found it interesting how focused it was on the narrowbody family when you can make the argument that Airbus is leaving the most money on the table in the widebody space.

Amazingly, despite the focus on narrowbody, no mention of A320.5 or A322 either! :biggrin:

Also I have to wonder whether this review will result in strategy changes for A380, rather then the "holding pattern" it finds itself in today.


I don’t think Airbus can fix it’s widebody issues easily. AN A350neo doesn’t make much sense. The A330neo is what it is. Unless you are willing to take the a330 out back and shoot it in the head to make market space there is no obvious fix.

The A320neo stretch is interesting but I wonder if industrial limitations take it off the table. If it physically can’t be built on the A320 only lines then it may be very disruptive. I know people say it would be just another option but it’s one I would see the vast majority of A320neo operators wanting.

The A322 is interesting if it gets a new wing but doesn’t do much for me if it doesn’t so far as pushing Airbus forwards.
 
Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:49 pm

Given that this was s strategic review I can understand the focus on NB. After all w/o a viable NB you can’t survive.

And imagine all the decisions w the advent of hybrid electric power and 3d printing just to name a few disruptive technologies that are on the horizon.

Good for him to discuss the politically driven plant locations and the impact this is having on the competitive position of the company. This’ll be tough to fix but if you don’t say it, no chance.

I’d build a green field plant on the french/ German border and shut down China and mobile. W brexit and the problems in Spain and France now is the time to renogiate the deal.

The easiest decision is shutting the 380 so this will tell us how strong the new team is.

The long term doesn’t matter if they don’t figure out how to generate more cash from the current businesses.
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 1:56 pm

N14AZ wrote:
bigjku wrote:
mistake that will ave multi decade consequence.

What a nice idea to "write" in French spoken language in a thread about Airbus :')))))))) ... just kidding ...

bigjku wrote:
But the A330neo was a huge strategic mistake that will ave multi decade consequence.

I am not sure if it was a strategic mistake or if they lost too much time for implementing this project. With the first deliveries starting now whereas there are already more than 787 B787s out there it seems that they are simply too late.

PS.: I just figured, over the years here at a.net, I developed a new gift: I can identify the thread opener by just reading the thread title. If it is about the A32X-whatsoever it's someone who likes to put this ugly fly onto his pictures, if it's about Airbus company affairs... well, there is always a new relevation ;-) .... just kidding, not meant to be offensive or snippy ... happy Christmas to everyone.


LOL, the new iOS has a very aggressive auto complete that makes typing a nightmare so far.

I think on the A330neo you describe the tactical mistake it made that limited its orders somewhat. To me the strategic mistake is that Airbus filled a market space that basically closed out its scope for innovation and isn’t generating huge sales in return.

Airbus could have built an all new, lighter widebody for the space and built a second generation commercial CFRP wing, innovated a bit on systems and further refined production methods. It didn’t move the ball forward at all really for whatever follows.

The basic starting point for Airbus on an A320neo replacement will be the A350 for wing, structure, systems and production methods really unless they find another program to run first. That seems like a strategic problem to me.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:07 pm

bigjku wrote:
Revelation wrote:
TropicalSky wrote:
I wish them well! The industry needs a strong Airbus to keep Boeing honest....but I do believe Airbus will be playing catch up to Boeing on NSA. MoM just seems like it can't come of the drawings boards due to the A321 incremental improvement changes

I found it interesting how focused it was on the narrowbody family when you can make the argument that Airbus is leaving the most money on the table in the widebody space.

Amazingly, despite the focus on narrowbody, no mention of A320.5 or A322 either! :biggrin:

Also I have to wonder whether this review will result in strategy changes for A380, rather then the "holding pattern" it finds itself in today.


I don’t think Airbus can fix it’s widebody issues easily. AN A350neo doesn’t make much sense. The A330neo is what it is. Unless you are willing to take the a330 out back and shoot it in the head to make market space there is no obvious fix.

The A320neo stretch is interesting but I wonder if industrial limitations take it off the table. If it physically can’t be built on the A320 only lines then it may be very disruptive. I know people say it would be just another option but it’s one I would see the vast majority of A320neo operators wanting.

The A322 is interesting if it gets a new wing but doesn’t do much for me if it doesn’t so far as pushing Airbus forwards.


The articles that I keep seeing are about Airbus focusing on production of the A320neo. A.net keeps speculating about A320 family stretches, but that is not what news sources are reporting on. I have no doubt the product development engineers are always looking at new things, but we keep hearing that the core engineering resources are focused on production.
Last edited by Newbiepilot on Thu Dec 13, 2018 2:10 pm, edited 1 time in total.
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:08 pm

Planeflyer wrote:
Given that this was s strategic review I can understand the focus on NB. After all w/o a viable NB you can’t survive.

And imagine all the decisions w the advent of hybrid electric power and 3d printing just to name a few disruptive technologies that are on the horizon.

Good for him to discuss the politically driven plant locations and the impact this is having on the competitive position of the company. This’ll be tough to fix but if you don’t say it, no chance.

I’d build a green field plant on the french/ German border and shut down China and mobile. W brexit and the problems in Spain and France now is the time to renogiate the deal.

The easiest decision is shutting the 380 so this will tell us how strong the new team is.

The long term doesn’t matter if they don’t figure out how to generate more cash from the current businesses.


Someone with Boeing once sat me down and explained how limiting the moving pieces by air model is for the 787. He is 100% convinced all 787’s will eventually be built in SC because it reduces Dreamlifter movements by a huge amount to do so and you are limited in how many such airplanes you can operate by regulation.

I think the giveaway to what Boeing at least thinks the model is is them building the wing plant onsite in Washington. They don’t want to move anything more around than you have to.

I am not at all surprised that narrowbody future is the focus of this study. It’s the key management issue for these two companies over the next 10-15 years. Managing it correctly will be harder than anything they have ever done. Just imagine he number of deferral, conversion and cancellation request either might get on existing products the second they announce its open season to order something new and better? It will be very hard to do this smoothly. You almost need to be able to sneakily go from announced to built in 3 years and built at a high rate in 5 years.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:15 pm

Revelation wrote:
bigjku wrote:
Then again I am sure this review and the analyst mentioned are all fake news or FUD.

Yep, I'm prepared to read about that "tabloid" Reuters and the "fake" industry sources it uses.


It’s a good article and we have seen a number of credible news sources about how the bribery scandal, management changes, and A320neo production are all crucial areas that Airbus is working through. To not A vs B to discuss these things since they are real. It’s a nice change from speculation and grand standing about how much better one plane or manufacturer is than the other. Both have priorities and challenges. This article provided some interesting insight
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:16 pm

Newbiepilot wrote:
bigjku wrote:
Revelation wrote:
I found it interesting how focused it was on the narrowbody family when you can make the argument that Airbus is leaving the most money on the table in the widebody space.

Amazingly, despite the focus on narrowbody, no mention of A320.5 or A322 either! :biggrin:

Also I have to wonder whether this review will result in strategy changes for A380, rather then the "holding pattern" it finds itself in today.


I don’t think Airbus can fix it’s widebody issues easily. AN A350neo doesn’t make much sense. The A330neo is what it is. Unless you are willing to take the a330 out back and shoot it in the head to make market space there is no obvious fix.

The A320neo stretch is interesting but I wonder if industrial limitations take it off the table. If it physically can’t be built on the A320 only lines then it may be very disruptive. I know people say it would be just another option but it’s one I would see the vast majority of A320neo operators wanting.

The A322 is interesting if it gets a new wing but doesn’t do much for me if it doesn’t so far as pushing Airbus forwards.


The articles that I keep seeing are about Airbus focusing on production of the A320neo. A.net keeps speculating about A320 family stretches, but that is not what news sources are reporting on.


That is why I wonder if industrially they can’t make the A320.5 size work out given what they expect customers to then have as far as an order mix. That stretch seems logical enough but I suspect hasn’t happened because industrially it would strangle the French FAL with potentially little to do if most airlines converted.

All the potential stretches have the potential to introduce disruption industrially. I suspect to some degree getting to higher rates and driving margins is significantly higher on the priority list than adding more variants.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:28 pm

bigjku wrote:

That is why I wonder if industrially they can’t make the A320.5 size work out given what they expect customers to then have as far as an order mix. That stretch seems logical enough but I suspect hasn’t happened because industrially it would strangle the French FAL with potentially little to do if most airlines converted.

All the potential stretches have the potential to introduce disruption industrially. I suspect to some degree getting to higher rates and driving margins is significantly higher on the priority list than adding more variants.


I think the top priority is on improving production based on the articles I read.

I wonder what the rationale behind that is. My guesses are that either production challenges are causing them to not be able to meet demand and holding down production rate OR the cost to produce the A320neo is too big compared to sales prices and margins are unhealthy. I speculate about whether or not Airbus chased market share at the expense of margin. They may fully expected to drive down production costs with higher rates and built that into the sales prices offered in the huge order rush. Another possibility is that Airbus was expecting more conversions to A321s which are more profitable. In the end I don’t know why the focus is on production, but I do wonder and speculate. It would be nice to have an honest conversation about that.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:35 pm

The biggest move Airbus could make at the moment is somehow to get A320 production out of Toulouse. Failing that, just repurpose or replace existing buildings so that the Toulouse line is more efficient and flexible. That alone would be a sack of cats decision politically as moving literally anything at TLS is going to be a major problem. The industrial processes and line flexibility at TLS are hugely outdated, and even the A321 can't be built there.

A major upheaval is required there with the latest techniques introduced onto an efficient line based in a built to purpose building. Get the basics right first THEN build that A320 successor.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 2:37 pm

FatCat wrote:
imho
737 is 40 years old
320 is 30 years old
both designs are ageing and, while they can perfectly (ish) fit in today's markets, both players will need brand new designs in the next 10 - 15 years.

imho
330neo was not a mistake. it is clear that the most successful widebody of airbus needs some improvements. it's the natural evolution of a machine. they do not have many orders, but many will come, as older 330s and the handful of 340s still flying will be replaced either by 350s or 330neos - if not by 787s.

I agree on narrowbody aircraft. The A220 will make that obvious within 5 years.

Once the 797 is launched, between the 787-10 and 797, I see no niche for the A330 other than an A338F, but only with more MTOW. Much of it's market defaults to the A321LR anyway. It is today's MD-11.

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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 3:55 pm

FatCat wrote:
imho
737 is 40 years old
320 is 30 years old
both designs are ageing and, while they can perfectly (ish) fit in today's markets, both players will need brand new designs in the next 10 - 15 years.

imho
330neo was not a mistake. it is clear that the most successful widebody of airbus needs some improvements. it's the natural evolution of a machine. they do not have many orders, but many will come, as older 330s and the handful of 340s still flying will be replaced either by 350s or 330neos - if not by 787s.

Fact check: the 737 first flew on April 9, 1967, so more than 51 years ago.
 
bigjku
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 4:39 pm

FatCat wrote:
imho
737 is 40 years old
320 is 30 years old
both designs are ageing and, while they can perfectly (ish) fit in today's markets, both players will need brand new designs in the next 10 - 15 years.

imho
330neo was not a mistake. it is clear that the most successful widebody of airbus needs some improvements. it's the natural evolution of a machine. they do not have many orders, but many will come, as older 330s and the handful of 340s still flying will be replaced either by 350s or 330neos - if not by 787s.


I think that’s very short term thinking with the a330neo. It’s going to get some orders so it’s fine. But that doesn’t think through what overall is best for the company not over the next 12 quarters but rather than next 12-15 years. Even if it racks up 500 orders and you make a bit of money off of it is that more than you could have made from pushing forward your overall manufacturing knowledge and technology base with a dedicated program below the A359?

Add to that I think it was a poor tactical move anyway and I don’t see what the gains for Airbus really have been.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 4:43 pm

FatCat wrote:
imho
737 is 40 years old
320 is 30 years old
both designs are ageing and, while they can perfectly (ish) fit in today's markets, both players will need brand new designs in the next 10 - 15 years.

imho
330neo was not a mistake. it is clear that the most successful widebody of airbus needs some improvements. it's the natural evolution of a machine. they do not have many orders, but many will come, as older 330s and the handful of 340s still flying will be replaced either by 350s or 330neos - if not by 787s.

The A330NEO was a mistake in timing. Had Airbus launched it while Boeing was still mired in 787 problems it would have done well, but they couldn’t because they were completely occupied with the A350. They launched it because they figured Boeing could not ramp up 787 production to meet demand and couldn’t slash the price enough to match the price they could offer the A330NEO for. They misjudged on both accounts. And now that Boeing can offer the 787 for essentially the same price as the A330NEO and competitive delivery there is little reason to buy it, as the 787 outperforms it in pretty much every metric, even if not by a huge margin.
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 4:57 pm

Channex757 wrote:
The biggest move Airbus could make at the moment is somehow to get A320 production out of Toulouse. Failing that, just repurpose or replace existing buildings so that the Toulouse line is more efficient and flexible. That alone would be a sack of cats decision politically as moving literally anything at TLS is going to be a major problem. The industrial processes and line flexibility at TLS are hugely outdated, and even the A321 can't be built there.

A major upheaval is required there with the latest techniques introduced onto an efficient line based in a built to purpose building. Get the basics right first THEN build that A320 successor.

A320 production will never be moved out of TLS though, that is just a political/union reality. There has been talk about doing so in the past (I think when A380 production was being set up, with German unions wanting all A320 production in exchange) but the TLS unions pitched, and will continue to pitch, a fit. A320 production is high volume and steady work. Without it TLS is totally reliant on widebody production, which is far more volatile.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 5:24 pm

The next big things in commercial aircraft design are likely to be:

Structures: CNF infused resins within composites.
Aerodynamics: Laminar flow wings (maybe even active BL control on the fuselage as well)
Engines: Propfans or ducted fans (which are considered distinct from UHBPR turbofans for some reason)
Systems: Nano-sensors throughout so that maintenance checks are almost an automated ongoing thing rather than done at X/Y/Z flight cycles.
Manufacturing: Out of Autoclave composites (see MS-21) and Additive Layer Manufacturing for PSEs.

Aside from navigating their internal politics and processes - these are the things the Airbus board need to consider and plan for.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 6:51 pm

FatCat wrote:
330neo was not a mistake. it is clear that the most successful widebody of airbus needs some improvements. it's the natural evolution of a machine. they do not have many orders, but many will come, as older 330s and the handful of 340s still flying will be replaced either by 350s or 330neos - if not by 787s.

We had a lot of discussions here on a.net about A330neo back in the days before it was announced. The main logic was to reuse the paid-for A330 line. To me this was a statement saying they weren't confident they could produce A350s at low cost for a long time, if ever. It didn't seem to be the best rationale to launch a program on.

Planeflyer wrote:
The easiest decision is shutting the 380 so this will tell us how strong the new team is.

I agree on both aspects of that statement.

What I've seen in corporate life is a new regime is loathe to take on the problem children of earlier regimes and they have a "honeymoon period" where they can get away with killing off under-performing programs.

I think odds are not good for the A380 surviving this kind of independent strategy review, it's the kind of things such "Next Chapter" reviews like to kill off so they can show they did something to move on from the "Last Chapter".

TFA says:

Planemaking boss Faury, who becomes CEO when Tom Enders retires next April, “wants to go fast and introduce a new state of mind; he wants to turn the page on the past,” a person familiar with the company said.

That must be troubling for those with emotional investment in the A380.

On the other hands, there is some small odds that the outcome of the review is for Airbus to "get off the pot" with regard to A380 and do something that makes it more attractive to customers.

Polot wrote:
Channex757 wrote:
The biggest move Airbus could make at the moment is somehow to get A320 production out of Toulouse. Failing that, just repurpose or replace existing buildings so that the Toulouse line is more efficient and flexible. That alone would be a sack of cats decision politically as moving literally anything at TLS is going to be a major problem. The industrial processes and line flexibility at TLS are hugely outdated, and even the A321 can't be built there.

A major upheaval is required there with the latest techniques introduced onto an efficient line based in a built to purpose building. Get the basics right first THEN build that A320 successor.

A320 production will never be moved out of TLS though, that is just a political/union reality. There has been talk about doing so in the past (I think when A380 production was being set up, with German unions wanting all A320 production in exchange) but the TLS unions pitched, and will continue to pitch, a fit. A320 production is high volume and steady work. Without it TLS is totally reliant on widebody production, which is far more volatile.

It makes me wonder if the lack of investment in TLS is a way to make the heavily unionized workforce look unproductive so they can justify moving production elsewhere.
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Wake now, discover that you are the song that the morning brings
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smartplane
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 7:11 pm

Planeflyer wrote:
The easiest decision is shutting the 380 so this will tell us how strong the new team is.

But if contingent liabilities surrounding past, present and future EK orders trigger, and become real liabilities, maybe not so easy.
 
Planeflyer
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 7:49 pm

smartplane wrote:
Planeflyer wrote:
The easiest decision is shutting the 380 so this will tell us how strong the new team is.

But if contingent liabilities surrounding past, present and future EK orders trigger, and become real liabilities, maybe not so easy.



That’s a good point which I have not considered.
I worry more that there are penalties to be paid back to the governments for launch costs.

One of the reasons I sold my shares was their financials are so hard to understand and they have so many, mostly bad earnings surprises.

Given their position in a two horse race they should be printing money. The more I read to more I’m convinced that the 320 series production system just won’t allow them to scale profitability.


If they can figure out how to fix this I think their design excellence will allow them to thrive.

I could be wrong but I think it is the Chinese that are most exposed to strategic disruption. They have gone all in on a 320 copy just when so many technologies are being matured to obsolete current designs.

It would surprise me at all too see LM or NG try to invest in AB to leverage the disruption that lies ahead.
 
sciing
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 8:41 pm

Its quite strange, Airbus is parking a bunch of frames in all programs and we discuss if the production system has an issue??
The cash is burned by not delivering produced A380 to EK, not delivering all the A320 gliders, not delivering A330ceo to HNA, not delivering A330neo to anybody, not delivering A350s to HNA and QR.
That’s the real trouble!
 
mxaxai
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 9:04 pm

Revelation wrote:
What I've seen in corporate life is a new regime is loathe to take on the problem children of earlier regimes and they have a "honeymoon period" where they can get away with killing off under-performing programs.

I think odds are not good for the A380 surviving this kind of independent strategy review, it's the kind of things such "Next Chapter" reviews like to kill off so they can show they did something to move on from the "Last Chapter".

The question is: what lies beyond? The current programs will finish their remaining development work by 2020 - 2021. A380 & A330neo will probably stay in production until ~2025 but that's it. The A400M is only kept alive as long as the governments are willing to pay for it. Are incremental improvements on A320 & A350 enough to keep their R&D departments occupied? I don't think so. It may be that the A380 is shut down for good but I doubt that such an announcement would come without another one for a new program.
 
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Channex757
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 9:18 pm

sciing wrote:
Its quite strange, Airbus is parking a bunch of frames in all programs and we discuss if the production system has an issue??
The cash is burned by not delivering produced A380 to EK, not delivering all the A320 gliders, not delivering A330ceo to HNA, not delivering A330neo to anybody, not delivering A350s to HNA and QR.
That’s the real trouble!

You aren't thinking about this the way that Airbus needs to address its systems.

Forget everything else. The A320N is the moneymaker due to huge volumes. It could make even more money if the production process was engineered to increase automation and require less manpower to do the job. This is purely the economies of scale being taken to its logical conclusion, which is to automate to the highest degree and eliminate errors in building the A320N family.

Engine delivery and financing are beyond Airbus' control. Having a fast, efficient factory is. This will then read across the company as future models come online. Unfortunately it would need to impinge on some Beluga flying of sections as some of it is downright ridiculous. Why are wings shipped from the UK to Bremen and then Toulouse for instance? Surely one location for wings would reduce costs? Are locations such as St.Nazaire really necessary?
 
Dupli
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 9:37 pm

Revelation wrote:
We had a lot of discussions here on a.net about A330neo back in the days before it was announced. The main logic was to reuse the paid-for A330 line.

The main argument was the production rate of the a350. With demand for that plane at the time higher than the planned production rate, and a backlog a decade in the future, people here argued that the a330neo would give Airbus additional sale opportunities, which would be left unfulfilled with only the a350 line.

Reading the article and people's contributions here, I am getting the feeling a strategy review long overdue, perhaps by half a decade, when the a320 backlog grew to its current size, the a350 getting completed, no 380 future becoming obvious, and the a330neo decision being made.
 
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Polot
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 9:45 pm

Channex757 wrote:
Engine delivery and financing are beyond Airbus' control. Having a fast, efficient factory is. This will then read across the company as future models come online. Unfortunately it would need to impinge on some Beluga flying of sections as some of it is downright ridiculous. Why are wings shipped from the UK to Bremen and then Toulouse for instance? Surely one location for wings would reduce costs? Are locations such as St.Nazaire really necessary?

Well that is where things like politics come into play. As long as Airbus still has significant state ownership it has to deal with some production inefficiencies (eg having A380 cabin outfitting done in XFW rather than TLS) in order to keep politicians happy. No way around that.
 
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 10:30 pm

Dupli wrote:
Reading the article and people's contributions here, I am getting the feeling a strategy review long overdue, perhaps by half a decade, when the a320 backlog grew to its current size, the a350 getting completed, no 380 future becoming obvious, and the a330neo decision being made.

Interesting point. I wonder if they have had any comprehensive strategy reviews over that time frame?

Polot wrote:
Channex757 wrote:
Engine delivery and financing are beyond Airbus' control. Having a fast, efficient factory is. This will then read across the company as future models come online. Unfortunately it would need to impinge on some Beluga flying of sections as some of it is downright ridiculous. Why are wings shipped from the UK to Bremen and then Toulouse for instance? Surely one location for wings would reduce costs? Are locations such as St.Nazaire really necessary?

Well that is where things like politics come into play. As long as Airbus still has significant state ownership it has to deal with some production inefficiencies (eg having A380 cabin outfitting done in XFW rather than TLS) in order to keep politicians happy. No way around that.

And with 'yellow vests' and others in the streets of France, it's not going to be easy to raise the subject any time soon.
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CFRPwingALbody
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 11:02 pm

I think Airbus is facing several problems:
1) Huge demand for A320NEO and A350, thus huge backlogs, projects in ramp-up.
2) Engine (delivery) problems (A320NEO and A330NEO) hopefully soon a story of the past.
3) Low demand for A380s and A330CEO (? & A330NEO)
4) Brexit uncertainties in how the (re)introduction of a EU-UK border will effect logistics.
5) A400M development and demand problems (off topic?)
6) C-Series/A220 program takeover, and how to fulfill the commitments promised by Bombardier.

AFAIK A320NEO and A220 ramp-up have a shared solution. This means moving away from the workshare agreements.
But Brexit uncertainties have to be removed before new projects can be started.

I don't see the logic of closing the Toulouse A320 FALs while A320 demand is much higher than production capacity.
With the transition from the A320 CEO to NEO, the plane demand has shifted from A319/A320 to A320/A321. This shift started with the introduction of the Sharklets. Currently A320NEO forecasted demand is 60% A320 40% A321 (and some A319?). At rate 60 this equals 36 A320NEO and 24 A321NEO. So the two A320 only Toulouse FAL's can take care of 16x A320NEO (~180 annually).
I don't know how the A380 FAL at Toulouse is currently utilized. But AFAIK there is hardly place for new facilities at Toulouse.
Most of the A330 FAL facilities have been used to increase A350 production capability. I don't know if A330NEO production can be increased to the rate previously achieved, because of the shared facilities by the A330 & A350.

AFAIK the A319NEO and A330NEO have the same problem: A oversized wing.
But UK does the wings, and Brexit = STOP new UK developments.

I disagree with the statement that the A330NEO was a mistake, possibly the scope was to little and to late. But Airbus was publicly humiliated with the original A350. Leading to what I think was the real mistake the A350XWB, that was several years to early. What could a A350 (A330NEO+) followed by a A360 (A350XWB+) have developed into. But let's look forward not backwards.

If Brexit has taken place, Trent 1000TEN/7000 (production) problems are behind us. And then the demand for A330NEO's remains low, leading to underutilized A330/A350 (/A380) facilities. What would a very logical step be if the market demands a 200-250 seat plane?...

I think there is a lot more R&D taking place in Europe than many here think. I think that the EU R&D might have been one of the reasons for BBD to transition 50,01% of CSALP to Airbus. That's a win win in the long run, I believe.
 
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Channex757
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 11:24 pm

CFRPwingALbody wrote:
I think there is a lot more R&D taking place in Europe than many here think. I think that the EU R&D might have been one of the reasons for BBD to transition 50,01% of CSALP to Airbus. That's a win win in the long run, I believe.

Much, much more. Airbus retains a number of centres, such as the Bristol design centre at Filton that was once BAE and originally Bristol Aircraft Company. That place isn't sat idle. Wing design is done at the Filton site and construction done at Broughton.

Airbus has already stated that their big design push is to integrate electric into the propulsion of future aircraft. Flight tests on a BAE146 aircraft are due to be done soon. Eventually we might well see ducted fan engines on an A320 class aircraft powered by a revolutionary generator-turbine coupling with way more efficiency that today's jets, with the generator engine utilising boundary layer air for much lower drag.

My point is, design and research has to be operated over multiple steps, not just the next project in line. Airbus will be designing for years out, when the A350 is in that rumoured NEO version and the A320 is long gone. Boeing does the same in its civil division.
 
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Matt6461
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 11:30 pm

Revelation wrote:
I think odds are not good for the A380 surviving this kind of independent strategy review, it's the kind of things such "Next Chapter" reviews like to kill off so they can show they did something to move on from the "Last Chapter".


Agreed. Killing the A380 is exactly the move that new management should take to bolster market narrative that the new management is cold-blooded about profit, given market perceptions about the A380. I'd expect such a decision to be rewarded by markets with a prompt uptick in share value.

I also think such a decision would be wrong, but that's another discussion.
This kind of talk is probably the worst news for A380, even worse than failing to sell to new customers for a few years now.
 
strfyr51
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Re: Airbus strategy review augurs clean break under new CEO

Thu Dec 13, 2018 11:55 pm

I believe Airbus has designs in place they haven't pulled the Trigger on in a bad attempt at countering whatever Boeing does.
They need to scrap that Policy and stop the "Warmed over" Half ass replies and get to Innovating Some NEW realities!! They're not only letting Boeing Dictate their ideas? They're letting Boeing dictate How they get their Strategy. Look at the Tanker they want for the USAF. Didn't they get enough of getting their Asses Beat on that? And so NOW they want MORE?? Do they believe for ONE minute that what the Air Force is putting Boeing Through ? They can do Better? YGBSM!! The USAF does NOT want a Militarized version of any "Off the Rack" Commercial Design. And? Airbus is either too proud or TOO Stupid to see that!!. Boeing has Patented all the specific changes between the KC46 and the B767. Airbus will have to find a way around them? Or? Pay Boeing a Boatload of Money to use their Patents,
 
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 12:18 am

Polot wrote:
Channex757 wrote:
The biggest move Airbus could make at the moment is somehow to get A320 production out of Toulouse. Failing that, just repurpose or replace existing buildings so that the Toulouse line is more efficient and flexible. That alone would be a sack of cats decision politically as moving literally anything at TLS is going to be a major problem. The industrial processes and line flexibility at TLS are hugely outdated, and even the A321 can't be built there.

A major upheaval is required there with the latest techniques introduced onto an efficient line based in a built to purpose building. Get the basics right first THEN build that A320 successor.

A320 production will never be moved out of TLS though, that is just a political/union reality. There has been talk about doing so in the past (I think when A380 production was being set up, with German unions wanting all A320 production in exchange) but the TLS unions pitched, and will continue to pitch, a fit. A320 production is high volume and steady work. Without it TLS is totally reliant on widebody production, which is far more volatile.


I think keeping the A320 FAl in TLS running has up to now a different rationale. Airbus is ramping up production, not reducing it. Closing down a 16 frame per month production would be not very helpful. Their will come a day when the two old FAL will be closed down and perhaps because mainly to use the space. As both XFW and TLS have been hiring and increasing the work force, due to overall increased production, I do not think that union pressure will be to great. Freed up workers would be moved to other production. The last years it has been difficult to find enough skilled workers to be hired both in XFW and TLS. Especially in TLS a big part of the work force is nearing retirement age.
 
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 12:30 am

Of all the wide bodies out there, the A350 is the one that appeals to me the most (as a passenger).

I suspect with the 787 competing with the A330NEO on price ($105-135m), the 777 and A350 have a structural cost disadvantage that needs to be overcome.

Where boeing may be able to offer the 777X at a lower price (compered to the 777-300ER), the A350 might be stuck between two aircraft models that ether cheaper to purchase or the same price to purchase, but offer more capacity.


Time will tell.
 
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kanban
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 2:02 am

In the other thread about Airbus production improvements viewtopic.php?f=3&t=1410145 , in post 118 there are some maps of TLS and XFW... if one plots the aircraft progression though the sites some of the more obvious non productive activities stand out. While the other thread talked about the A320 series, the problems are across all models and all European sites.. The A350 is rate limited by the shuttling around to incompatible buildings. The A330 had a problem of reaching a length limit caused by building size. XFW appears to have lots of space for major product lines yet they seem to be randomly locating buildings without a clear process thought (unusual for German engineering).

I would venture that several things have conspired 1) Airbus is a combination of previous small companies and in the rush to compete just made do with what they inherited. 2) Boeing had the fortune during WWII of being far from the action and learned a lot for the B-17 production. So when they tackled new buildings, although flagged for specific models, they are generic.. this allows reconfiguration based on current use. They also build hardware movement into them with serious overhead cranes.. One of the A350 production limitations is the building are too low for cranes necessitating special dollies and tractors.

Now when the uninformed blather along about "old warmed over designs" they make it sound as the planes have not significantly changed from the first line unit.. Many of the changes are not obvious, and sometimes the latest gee whiz has no market value. This it true for both companies. On of the perennial questions is how long can the market continue to expand at the current rate. Yes there are all the sales projections, however eventually there will be a limit to airspace, airport capacity, etc.. There will also be a limit on how much airlines will continue to buy the latest and ever increasing costs. So what then.. well A.net will be moaning about wing and tube design as obsolete but offering nothing that makes sense.

If either company wants to last, they need not only to design for manufacture and maintenance, but must design the factory sites for continuous flow through manufacturing/assembly with a minimum of non value added operations and reasonable robotics. (some robotics are still slower and less efficient than the old manual methods.)

Sometimes I think the airplane for airplane competition is also a waste.. do we need too manufacturers filling every niche with a limited product? I know A.neters see this a win lose war... it isn't neither company will disappear but if the believed A.net, they would soon run out of profitable product lines.

Mjoelnir.. as you noted airbus moved from being a small #4 in aircraft production, but in many ways their management are intellectually still stuck there by their own egotism and lack of a clear process.

Years ago when Airbus was first put together from pieces is other airplane manufacturers, Boeing offered them an internship process where they sent up and comers to learn the Boeing production methods. I worked with a couple of the interns. I have since heard that when they returned to Airbus they met a stone wall of "this is how we do it" and many left the company... This is a common problem when merging companies with great egos and little room to find common ground. Airbus has done well in spite of that, however the bills arrogance and unquestioned adherence past are coming due as the new boss is pointing out very publicly.
 
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 9:47 am

WayexTDI wrote:
Fact check: the 737 first flew on April 9, 1967, so more than 51 years ago.

you're right, I made a typo when writing and didn't check after posting

anyway

lightsaber wrote:
I agree on narrowbody aircraft. The A220 will make that obvious within 5 years.

Once the 797 is launched, between the 787-10 and 797, I see no niche for the A330 other than an A338F, but only with more MTOW. Much of it's market defaults to the A321LR anyway. It is today's MD-11.

Lightsaber


I still "believe" in the A330neo. The A330 is one of the most succesful widebody of the last 25 years, has sold big and the 300 series fits most of the market demands. So the neos have a huge (potential) substitution market, imho.
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 10:06 am

The moving of parts and airplanes is not as bad as it seems. As the sites are more specialized their productivity can be higher. Thats's the theory at least. Boeing selected a similar system, even global this time, for the 787.
It doesn't cost anything more to have a new A380 land in Hamburg instead of Toulouse after the first flight. That's about like taking new 737s from Renton to KBFI.
 
brindabella
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 1:32 pm

bigjku wrote:
Some people around here warned that to a degree the NEO type programs at both builders carry long term strategic risk that in the heroine like drug rush of orders gets ignored. No one wants to hear it.

There is no real debate that doing the new engines on narrows made sense. It chopped the kneees off of all potential competitors and trashed two potential competitors in BBD and EMB.

But the A330neo was a huge strategic mistake that will ave multi decade consequence. Airbus thought to get a pile of orders on the cheap but gave no thought to the long term problem of just where would it innovate prior to whatever comes after the A320neo.

I can’t imagine given the huge industrial challenges that will be there when you go you repalce the narrowbody product that either airframer will be looking to do a ton of innovation on either the planes or the production system. Some of us have argued that NMA is almost as much about having a space for doing this as anything.

Everything IMHO comes down to how both companies get from where they are today to a new narrowbody without killing themselves in the process. I see what Boeing is doing. I don’t yet see a clear path at Airbus.

Then again I am sure this review and the analyst mentioned are all fake news or FUD.


Sorry to paraphrase but I would endorse the statement that the 330neo - going on for however long - will unfortunately stifle AB innovation in the medium WB space.
Meanwhile BA will (IMHO!) do a ("squeezy") 7/8-abreast on the 797.

So then BA will have current-gen plastic medium WBs at 7/8- and 9-abreast.

Sure the 797 will have a "little" wing. So what? Think BA can't add a 2025-era bigger wing if appropriate?

It will also have a (2025 generation) plastic 8-ab fuselage and modern empennage/systems. And can tag-team against any AB innovation in the medium WB space with the (also plastic) 9-abreast 787. (Which will of course then be due for a mid-life upgrade anyway).

All I see here is A321+/++/322 to compete against the 797 (NB against a small WB).

I have been surprised to see so little discussion here on the growing threat to the WB space which AB faces.

(And yes - save your ink - I am a huuuge fan of the A359.

20-years on I see it as a game-changer/or an A320-type company "rock". :D )

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WIederling
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 1:45 pm

bigjku wrote:
Everything IMHO comes down to how both companies get from where they are today to a new narrowbody without killing themselves in the process. I see what Boeing is doing. I don’t yet see a clear path at Airbus.


mMy guess would be that Airbus is waiting for laminar flow wings to be ready for series production.
Can't be too far off when the LFW demonstrator already flies two differently manufactured specimen.

Boeing is in search for a better PR company.
Last edited by WIederling on Fri Dec 14, 2018 1:55 pm, edited 1 time in total.
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 1:51 pm

Noshow wrote:
The moving of parts and airplanes is not as bad as it seems. As the sites are more specialized their productivity can be higher. Thats's the theory at least. Boeing selected a similar system, even global this time, for the 787.

You might want to reread #13 again. The flaws of the Dreamlifter operation are now quite evident. There's a good reason why the 777X wings are being made in KPAE even though Boeing would presumably prefer a greenfield operation.

Enders did a lot to remove a bunch of political control from Airbus, but it still seems we'll never know what an Airbus free to move resources around as desired would look like. FR and DE still control significant blocks of shares and have a lot of political clout, as do unions.

It's interesting to ponder Airbus setting up a greenfield site somewhere in the lower wage parts of the EU, kind of like Boeing did with KCHS, to build its next clean sheet. Could the unions block it? Could DE and/or FR block it? It it even worth it for Airbus to raise the possibility?
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keesje
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 2:14 pm

brindabella wrote:

All I see here is A321+/++/322 to compete against the 797 (NB against a small WB).

I have been surprised to see so little discussion here on the growing threat to the WB space which AB faces.

(And yes - save your ink - I am a huuuge fan of the A359.


I think slot / supply restrictions are the major problem for AB in the 300-350 seat WB segment.

Both the -900 / LR and -1000 seem: don't touch just sell. The number of 777 major operators that has not ordered A350 is lowish. From the back of my head (EK, AA, QF, KA, ..) The competition in the A350 segment are 787-10 and 777-8. With all respect, that proves doable.

The A330NEO is an extra, sold out for the next 3-4 yrs, and follow up orders from the large A330 customer base will probably drip in. And it keeps 787 profitability in hand. Because the newer 787 might be better, but not so much. Same engines & ~dimensions.

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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 2:34 pm

If Airbus is going to do a strategic review of wing development and production post Brexit, I reckon the Dutch wouldn't say no:

- Still strong competence in aviation tech
- logistically well placed in relation to Germany, France and the sea.
- Several underused local Airports.
- Still got some credit from the Fokker disaster.

To be honest though. I think it will just remain in the UK or Brexit must indeed go terribly wrong (which I don't suspect).
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musman9853
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 4:07 pm

FatCat wrote:
WayexTDI wrote:
Fact check: the 737 first flew on April 9, 1967, so more than 51 years ago.

you're right, I made a typo when writing and didn't check after posting

anyway

lightsaber wrote:
I agree on narrowbody aircraft. The A220 will make that obvious within 5 years.

Once the 797 is launched, between the 787-10 and 797, I see no niche for the A330 other than an A338F, but only with more MTOW. Much of it's market defaults to the A321LR anyway. It is today's MD-11.

Lightsaber


I still "believe" in the A330neo. The A330 is one of the most succesful widebody of the last 25 years, has sold big and the 300 series fits most of the market demands. So the neos have a huge (potential) substitution market, imho.



the issue with that is that the 330neo has been squeezed into such a tiny market slice. it can't really compete with the 787 on price alone, and that was the sole reason the program was launched. it's not as efficient as the 787 or as flexible. the onyl thing really going for it is the handful of orders means you'll get a 330neo a little bit before a 787. are airlines that desperate for new widebodies that theyre not gonna be willing to wait like a year or two for those 787s instead of a330s? im not sure that they are.
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 5:44 pm

CFRPwingALbody wrote:
I think Airbus is facing several problems:
1) Huge demand for A320NEO and A350, thus huge backlogs, projects in ramp-up.
2) Engine (delivery) problems (A320NEO and A330NEO) hopefully soon a story of the past.
3) Low demand for A380s and A330CEO (? & A330NEO)
4) Brexit uncertainties in how the (re)introduction of a EU-UK border will effect logistics.
5) A400M development and demand problems (off topic?)
6) C-Series/A220 program takeover, and how to fulfill the commitments promised by Bombardier.

Great list.

I would add:

7) Continuation of transition to "big data" analytics world (see the Airbus production improvements thread)
8) Transition to "life cycle" revenue model, i.e. squeezing the traditional vendor ecosystem (see the Airbus new CEO / management thread).

WIederling wrote:
My guess would be that Airbus is waiting for laminar flow wings to be ready for series production.
Can't be too far off when the LFW demonstrator already flies two differently manufactured specimen.

Boeing is in search for a better PR company.

A high quality point, followed by a cheap shot. Par for the course.
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mxaxai
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 5:55 pm

Channex757 wrote:
Engine delivery and financing are beyond Airbus' control. Having a fast, efficient factory is. This will then read across the company as future models come online. Unfortunately it would need to impinge on some Beluga flying of sections as some of it is downright ridiculous. Why are wings shipped from the UK to Bremen and then Toulouse for instance? Surely one location for wings would reduce costs? Are locations such as St.Nazaire really necessary?

Its not easy to close/move a factory with 3000 workers. Bremen, St. Nazaire and Filton are all of that size. Broughton is even larger. Airbus top management has been pushing to consolidate tasks but you can't do that from one day to another. But due to this, there is significant competition between the sites. This gets ridiculous to the point that each site will protect "their" secrets to prevent management from shifting that workpackage elsewhere. At the same time, it provides an incentive to improve your own productivity since an unproductive site is more likely to lose workshare.

Looking at Boeing, their 737 fuselage is assembled in Wichita, Kansas, and brought to Seattle by train. Another legacy that probably brings its own limitations.
 
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Re: Airbus strategy review augurs clean break under new CEO

Fri Dec 14, 2018 6:40 pm

Revelation wrote:
Wiederling wrote:
Boeing is in search for a better PR company.

............. , followed by a cheap shot.


Not at all.
Boeing has not manged to repeat the PR glory that was the Dreamliner's Druglike Rush.

MoM is lackluster. New, better PR company needed. ( though I think the MoM tag is burned already.)
Last edited by WIederling on Fri Dec 14, 2018 6:59 pm, edited 2 times in total.
Murphy is an optimist

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