mcg
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 06, 2019 5:39 pm

BAorAB wrote:
I believe SQ leased each of these frames at approx. $1.6M per month for 10 years for a total return of $192M per plane. It was rumored that Dr Peters paid just over $200 per plane, so as long as they recover $8M or so for the scrap parts per plane they'd break even. I'm sure their vision was to turn a much larger profit envisioning a 2nd hand re-lease market, but the reality of these doomed birds probably came to light not long after they took their first deliveries. I think they will turn a small profit in the end, however $45M in scrap parts per frame is to optimistic, especially given the flurry of A380's with the certain similar fate right behind these two frames. (MH, EK, EY, AF, QF, LH) all won't be far behind as well as the remaining SQ birds as soon as their 779's start rolling in.


The Lessor would have had (and continue to have) substantial interest expense associated with this transaction.
 
ScottB
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 06, 2019 6:26 pm

filipinoavgeek wrote:
I know I'm probably sounding like a broken record at this point, but I really still don't understand why no one bothered to save 9V-SKA, either to preserve it for display, or at least to operate it. I mean, surely being the plane that operated the first commercial A380 would have given it some value right?


The question is whether any museum (or Airbus) would be willing to pay a value for the former 9V-SKA which was equal to or higher than the scrap value. Dr. Peters needs to generate the best possible return for its investors, and I doubt the investors would be willing to entertain giving up tens of millions of dollars collectively in order to preserve an aviation artifact. The Delta Flight Museum has managed to preserve a 747-400 and the Spirit of Delta 767 largely because both aircraft were owned and fully-depreciated (or nearly so) by the time they were retired; also, the museum runs as a non-profit organization so Delta would have enjoyed a tax write-off for donating the aircraft to the museum. There's also intangible brand value (and a boost to employee morale) in having the museum.

It's not clear that SQ would enjoy enough of a brand benefit by spending the money required to buy 9V-SKA from the lessor AND preserve in a museum.

filipinoavgeek wrote:
Is there any reason why it wasn't the A380 that ended up going to HiFly, even though HiFly's plane was also among the early birds?


The specific example that HiFly took might have been available on better terms, or it might have been in better condition, or it might have had fewer quirks, or it might have had more hours available until its next HMV, etc.
 
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Stitch
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 06, 2019 7:36 pm

ptwings wrote:
Something I heard is that ex. 9V-SKC, current Hi Fly 9H-MIP is owned by Doric Asset Finance, the other ex. 9V-SKA by Dr.Peters Group, except the engines, which coincidentally were also owned by Doric. So this helped (or complicated) the deal with one or another.


In January 2008, Airbus sold 9V-SKA, 9V-SKB and 9V-SKC to Doric Asset Finance on a 10 year lease to SQ. Doric also was the original lessor of 9V-SKD and 9V-SKE.

At some later date, Dr. Peters purchased all but 9V-SKC from Doric.
 
filipinoavgeek
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 06, 2019 8:57 pm

ScottB wrote:
filipinoavgeek wrote:
The Delta Flight Museum has managed to preserve a 747-400


Not just any 747-400, but in fact the very first one.
 
smartplane
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 06, 2019 10:04 pm

BAorAB wrote:
I believe SQ leased each of these frames at approx. $1.6M per month for 10 years for a total return of $192M per plane. It was rumored that Dr Peters paid just over $200 per plane, so as long as they recover $8M or so for the scrap parts per plane they'd break even. I'm sure their vision was to turn a much larger profit envisioning a 2nd hand re-lease market, but the reality of these doomed birds probably came to light not long after they took their first deliveries. I think they will turn a small profit in the end, however $45M in scrap parts per frame is to optimistic, especially given the flurry of A380's with the certain similar fate right behind these two frames. (MH, EK, EY, AF, QF, LH) all won't be far behind as well as the remaining SQ birds as soon as their 779's start rolling in.

Commercial aircraft leases are complex, especially financially, with often only basic disclosures, depending on the finance and vehicles used.

Missing from our knowledge:

1. How, and in what form, were the OEM's retrospective discounts allocated to each party?

2. What EOL payments were agreed, and what proportion, if any, were forgiven?

3. Has the OEM contributed any payment or credit in relation to an original buyback agreement?

4. Was part of the financing loan (10 year lease - 12 year financing) subject to a third party guarantee?

5. Not uncommon in respect to sale/leaseback, does the lessee have any shared liability for capital value shortfall at EOL?

6. In respect to the top-up order, how were the retrospective credits allocated, both on the new aircraft, and in relation to the original 19 deliveries (with perhaps the credits for the five earliest accruing to the current lessor)?

7. Did any of the transactions 'pass through' SQ or a related party?

8. Tax implications of every step and ownership movement?

Devil is in the detail.

If any of the remaining EK A380 leases are disclosed, will be interesting to compare values and margins with earlier, current leases. And movement in the market outlook guidance for A380 capital values, mandatory for listed leasing entities.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 06, 2019 11:22 pm

When Dr. Peters entered these leases I do not believe that they thought it was even remotely likely that the aircraft would end up being scrapped at the end of them. But they had to consider that possibility, and from the figures quoted, it seems they will at least not lose money outright. But I am sure they are not happy and expected a much better return. Lessors of future retiring A380s are likely to be even less happy, because the market for spare parts will soon be glutted, and there is no other airframe using those engines. And I expect that, now that production is going to soon cease, that other airlines are going to retire theirs sooner rather than later, even EK.

When Boeing designed the 747, it was nearly double the capacity of anything else flying at the time. It also had considerably more range and much better CASM than anything else available. This lasted, with one major upgrade, right into the 90s when the A340 and the 777 started cutting into its territory with comparable range and CASM, but less capacity. So Airbus tried to duplicate its success, but missed the mark rather badly. Using the same floor space per seat as other airliners the A380 would have carried around 800 passengers, but the problem was that no airline wanted to fly 800 passengers on one plane. Had there been demand for an 800 passenger plane the A380 could probably offered considerably better CASM than anything else for a long time. But Airbus designed the wing and structure for a 900 passenger plane, adding unneeded weight and drag for their 800 passenger plane. But since no one wanted 800 seats they only put 450-500 in, hoping that the extra space per passenger would give it enough appeal that it would sell on that basis. But that has never worked; while passengers complain about sardine accommodations they vote with their wallets and book them every time because they are cheaper. And the next thing that blindsided the A380 was the incredible increase in efficiency, started by the 77W and carried to a new level by the 787. The 77W offered basically the same range as the A380, nearly as good CASM, but in a much smaller package that was much cheaper to buy and fly. Then the 787 (and later the A350) offered even better CASM than the A380 could manage. And now the 779 is going to offer close to the passenger capacity that the A380 has been using but in a smaller plane that will offer even better CASM than the 787 or the A350. Had the A380 been optimized as a 500 passenger plane instead of a 900 passenger plane it might have stood a chance, but as designed it was doomed.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
Waterbomber2
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 12:24 am

SEPilot wrote:
When Dr. Peters entered these leases I do not believe that they thought it was even remotely likely that the aircraft would end up being scrapped at the end of them. But they had to consider that possibility, and from the figures quoted, it seems they will at least not lose money outright. But I am sure they are not happy and expected a much better return. Lessors of future retiring A380s are likely to be even less happy, because the market for spare parts will soon be glutted, and there is no other airframe using those engines. And I expect that, now that production is going to soon cease, that other airlines are going to retire theirs sooner rather than later, even EK.

When Boeing designed the 747, it was nearly double the capacity of anything else flying at the time. It also had considerably more range and much better CASM than anything else available. This lasted, with one major upgrade, right into the 90s when the A340 and the 777 started cutting into its territory with comparable range and CASM, but less capacity. So Airbus tried to duplicate its success, but missed the mark rather badly. Using the same floor space per seat as other airliners the A380 would have carried around 800 passengers, but the problem was that no airline wanted to fly 800 passengers on one plane. Had there been demand for an 800 passenger plane the A380 could probably offered considerably better CASM than anything else for a long time. But Airbus designed the wing and structure for a 900 passenger plane, adding unneeded weight and drag for their 800 passenger plane. But since no one wanted 800 seats they only put 450-500 in, hoping that the extra space per passenger would give it enough appeal that it would sell on that basis. But that has never worked; while passengers complain about sardine accommodations they vote with their wallets and book them every time because they are cheaper. And the next thing that blindsided the A380 was the incredible increase in efficiency, started by the 77W and carried to a new level by the 787. The 77W offered basically the same range as the A380, nearly as good CASM, but in a much smaller package that was much cheaper to buy and fly. Then the 787 (and later the A350) offered even better CASM than the A380 could manage. And now the 779 is going to offer close to the passenger capacity that the A380 has been using but in a smaller plane that will offer even better CASM than the 787 or the A350. Had the A380 been optimized as a 500 passenger plane instead of a 900 passenger plane it might have stood a chance, but as designed it was doomed.



Maybe or maybe not.
A small spike in demand for the A380 and A380 values are going to skyrocket.
If you can't get a new one, you are looking at a market with limited supply. Airlines will have to think twice before returning their MSN's to the lessors, especially considering that they may end up with a competitor that could use the A380's against them.

The B787 does not offer better CASM than an A380 in any case, except MAYBE the B787-10. With the B787-10, things can get murky, but the B787-10 is not a cheap aircraft to buy. The B788 doesn't even come near an A380's CASM if you compare similar seating densities.
DY is dying proof that the B787's spectacularily low CASM is fictional. They aren't cheap to lease and in a A380-type configuration seating less than 200, 5 tons per hour is not nothing.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 12:38 am

Waterbomber2 wrote:

The B787 does not offer better CASM than an A380 in any case, except MAYBE the B787-10. With the B787-10, things can get murky, but the B787-10 is not a cheap aircraft to buy. The B788 doesn't even come near an A380's CASM if you compare similar seating densities.
DY is dying proof that the B787's spectacularily low CASM is fictional. They aren't cheap to lease and in a A380-type configuration seating less than 200, 5 tons per hour is not nothing.


That's a pretty bold claim. I have seen literally Hundreds of Dispatch Realses for 788s & 388s (and shed loads of other types). Similar route lengths, and a ton of different configurations. Absolutely None of those support your claim.

In fact, you need a very Low density 77W before even that one gets more expensive per seat.

I don't know where you read that, but there's just nothing that supports that in operational real life.


Further, this is all going along with the ridiculous notion that CASM alone will save frames meant to be parted out. There's an awful lot more to the 388's economic history than just CASM. You don't see KE doing much about their super low density 388s (or 748Is for that matter). There's probably a reason for that.
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SEPilot
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 1:11 pm

Waterbomber2 wrote:
SEPilot wrote:
When Dr. Peters entered these leases I do not believe that they thought it was even remotely likely that the aircraft would end up being scrapped at the end of them. But they had to consider that possibility, and from the figures quoted, it seems they will at least not lose money outright. But I am sure they are not happy and expected a much better return. Lessors of future retiring A380s are likely to be even less happy, because the market for spare parts will soon be glutted, and there is no other airframe using those engines. And I expect that, now that production is going to soon cease, that other airlines are going to retire theirs sooner rather than later, even EK.

When Boeing designed the 747, it was nearly double the capacity of anything else flying at the time. It also had considerably more range and much better CASM than anything else available. This lasted, with one major upgrade, right into the 90s when the A340 and the 777 started cutting into its territory with comparable range and CASM, but less capacity. So Airbus tried to duplicate its success, but missed the mark rather badly. Using the same floor space per seat as other airliners the A380 would have carried around 800 passengers, but the problem was that no airline wanted to fly 800 passengers on one plane. Had there been demand for an 800 passenger plane the A380 could probably offered considerably better CASM than anything else for a long time. But Airbus designed the wing and structure for a 900 passenger plane, adding unneeded weight and drag for their 800 passenger plane. But since no one wanted 800 seats they only put 450-500 in, hoping that the extra space per passenger would give it enough appeal that it would sell on that basis. But that has never worked; while passengers complain about sardine accommodations they vote with their wallets and book them every time because they are cheaper. And the next thing that blindsided the A380 was the incredible increase in efficiency, started by the 77W and carried to a new level by the 787. The 77W offered basically the same range as the A380, nearly as good CASM, but in a much smaller package that was much cheaper to buy and fly. Then the 787 (and later the A350) offered even better CASM than the A380 could manage. And now the 779 is going to offer close to the passenger capacity that the A380 has been using but in a smaller plane that will offer even better CASM than the 787 or the A350. Had the A380 been optimized as a 500 passenger plane instead of a 900 passenger plane it might have stood a chance, but as designed it was doomed.



Maybe or maybe not.
A small spike in demand for the A380 and A380 values are going to skyrocket.
If you can't get a new one, you are looking at a market with limited supply. Airlines will have to think twice before returning their MSN's to the lessors, especially considering that they may end up with a competitor that could use the A380's against them.

The B787 does not offer better CASM than an A380 in any case, except MAYBE the B787-10. With the B787-10, things can get murky, but the B787-10 is not a cheap aircraft to buy. The B788 doesn't even come near an A380's CASM if you compare similar seating densities.
DY is dying proof that the B787's spectacularily low CASM is fictional. They aren't cheap to lease and in a A380-type configuration seating less than 200, 5 tons per hour is not nothing.

Where is this “small spike in demand” for the A380 going to come from? And where are your figures that the CASM of the 787 does not beat the A380? I have seen numerous charts showing CASM figures for airliners in current use, and they all show better CASM for the 787, the A350, and those that include it, the 779 (and I think even the 778) than the A380. And the 77W is not much more than the A380. If this is wrong show me some evidence. As I said, an A380 with similar passenger density to these planes would probably be competitive, but nobody can deal with it. And even EK is backing away from it. I believe that it was EK who initiated the cancellation of their remaining orders on account of their failure to get RR to improve the engines; my evidence is the order for A350s and A330neos that they had previously rejected. All other operators of the A380 except SQ have explicitly or implicitly stated that they do not want any more; SQ did replace the four they had, but did not add to them. Most of the other operators are reducing their fleets. And while CASM is not the only metric of an airliner’s effectiveness, it is one of the most important. What is being proved is that an airliner with the largest capacity cannot survive if it does not also offer the best CASM. And that is what killed the A380, and the 748i.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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flee
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 1:41 pm

SQ actually replaced the first five with new builds.
 
ScottB
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 2:08 pm

Waterbomber2 wrote:
A small spike in demand for the A380 and A380 values are going to skyrocket.


Except... that's just not going to happen. AF plans to dump their leased A380s (five of their fleet of ten) and LH will sell six of its A380s back to Airbus. MH can't figure out what to do with its six whales if the airline even survives, and QR will remove its ten frames when they reach ten years. So that's a total of 27 -- more than any carrier save EK ordered from Airbus. OZ has another six and they are facing a potential liquidity crisis this year.

EK likely will not keep its older frames as the leases expire and as they take the last few new examples off the line. BA claims to want more but can't make the financials work once refurbishment is added to the consideration. QF has stated they don't want more. EY is in a world of hurt and in no position to take more A380s. So from where will this supposed "small spike in demand" come -- and do you really see it absorbing the dozens of A380s which will be parked in the next few years? I doubt we'll even see a half dozen A380s find new owners.

Waterbomber2 wrote:
Airlines will have to think twice before returning their MSN's to the lessors, especially considering that they may end up with a competitor that could use the A380's against them.


I think most airlines would be happy to see their competitors deploy A380s at this point. For most carriers, the A380 seems to just be a very effective way to lose money.

Waterbomber2 wrote:
The B787 does not offer better CASM than an A380 in any case, except MAYBE the B787-10. With the B787-10, things can get murky, but the B787-10 is not a cheap aircraft to buy. The B788 doesn't even come near an A380's CASM if you compare similar seating densities.


CASM isn't quite as important as the difference between CASM and RASM. The smaller size of the 787 (and A350, and 777) means that an airline doesn't have to sell as many deeply-discounted economy seats (or just fly empty seats period). ANA flies 789s with 18J/377Y as well as 48J/167Y. They could have chosen to cram their new A380s with 800 seats (and that'd be appropriate to the leisure-heavy TYO-HNL route) but they'd have no prayer of selling that many seats day-in, day-out.
 
Waterbomber2
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 5:15 pm

ScottB wrote:
Waterbomber2 wrote:
A small spike in demand for the A380 and A380 values are going to skyrocket.


Except... that's just not going to happen. AF plans to dump their leased A380s (five of their fleet of ten) and LH will sell six of its A380s back to Airbus. MH can't figure out what to do with its six whales if the airline even survives, and QR will remove its ten frames when they reach ten years. So that's a total of 27 -- more than any carrier save EK ordered from Airbus. OZ has another six and they are facing a potential liquidity crisis this year.

EK likely will not keep its older frames as the leases expire and as they take the last few new examples off the line. BA claims to want more but can't make the financials work once refurbishment is added to the consideration. QF has stated they don't want more. EY is in a world of hurt and in no position to take more A380s. So from where will this supposed "small spike in demand" come -- and do you really see it absorbing the dozens of A380s which will be parked in the next few years? I doubt we'll even see a half dozen A380s find new owners.

Waterbomber2 wrote:
Airlines will have to think twice before returning their MSN's to the lessors, especially considering that they may end up with a competitor that could use the A380's against them.


I think most airlines would be happy to see their competitors deploy A380s at this point. For most carriers, the A380 seems to just be a very effective way to lose money.

Waterbomber2 wrote:
The B787 does not offer better CASM than an A380 in any case, except MAYBE the B787-10. With the B787-10, things can get murky, but the B787-10 is not a cheap aircraft to buy. The B788 doesn't even come near an A380's CASM if you compare similar seating densities.


CASM isn't quite as important as the difference between CASM and RASM. The smaller size of the 787 (and A350, and 777) means that an airline doesn't have to sell as many deeply-discounted economy seats (or just fly empty seats period). ANA flies 789s with 18J/377Y as well as 48J/167Y. They could have chosen to cram their new A380s with 800 seats (and that'd be appropriate to the leisure-heavy TYO-HNL route) but they'd have no prayer of selling that many seats day-in, day-out.



I clearly wrote maybe, maybe not.

Our industry is not predictable.
Keyboard warriors on this site have been predicting 200$ oil in 2007/2008.
The A380's were ordered back when oil was above 100 USD a barrel.

There are many variables.
I'm not even sure that higher oil prices would actually favor smaller aircraft as fares become proportionally higher and thinner routes or high frequency routes see a slump in demand.

I see keyboard warriors making definitive statements that an A380 has higher CASM than smaller aircraft.
If you compare an AF B77W against an SQ A380 that has less seats, sure, but a single SQ suite earns more revenue than a whole row of 10 sardine can seats.

In terms of RASM, if you look at major routes, smaller aircraft will be hauling half the amount of high yielding pax and ten times the amount of the lowest yielding payload, ie cargo, while the A380 will be hauling double the amount of high yielding passengers and won't have to be bothered to fill itself with low yielding cargo.
The argument that the smaller aircraft only captures the high yielding pax while the A380 needs to fill itself up with low yielding pax is only valid for thin routes where the A380 is not suitable in the first place.

I have yet to find a route where the A380 flight is consistently the cheapest option.
I know plenty though where the B787/B77W are the cheapest option and at not very healthy yields...

The A380 is not an aircraft, it's a product. Airlines like QF have not been able to market it as such, but look at SQ or EK. The first SQ flight with CEO Chew Choon Seng leading the camera team into the aircraft is engraved in many people's minds.

Whether there is demand tomorrow can't be predicted accurately today. If Airbus knew that they wouldn't be able to sell the A380 in the 2010's, they probably wouldn't have launched it.
But things change and the A380 is now a very finite resource. It will be interesting to see how things unfold going forward.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 6:17 pm

Waterbomber2 wrote:
But things change and the A380 is now a very finite resource. It will be interesting to see how things unfold going forward.

A380 is now a very finite resource, but one whose finite supply exceeds demand (ref: EK cancelling 39 orders), and whose supply of used frames will only be growing.

As enjoyable as your posts are, they'd be even better if you addressed Scott's point:

ScottB wrote:
Except... that's just not going to happen. AF plans to dump their leased A380s (five of their fleet of ten) and LH will sell six of its A380s back to Airbus. MH can't figure out what to do with its six whales if the airline even survives, and QR will remove its ten frames when they reach ten years. So that's a total of 27 -- more than any carrier save EK ordered from Airbus. OZ has another six and they are facing a potential liquidity crisis this year.

EK likely will not keep its older frames as the leases expire and as they take the last few new examples off the line. BA claims to want more but can't make the financials work once refurbishment is added to the consideration. QF has stated they don't want more. EY is in a world of hurt and in no position to take more A380s. So from where will this supposed "small spike in demand" come -- and do you really see it absorbing the dozens of A380s which will be parked in the next few years? I doubt we'll even see a half dozen A380s find new owners.
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Strato2
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 7:00 pm

ScottB wrote:
Waterbomber2 wrote:
A small spike in demand for the A380 and A380 values are going to skyrocket.


Except... that's just not going to happen. AF plans to dump their leased A380s (five of their fleet of ten) and LH will sell six of its A380s back to Airbus. MH can't figure out what to do with its six whales if the airline even survives, and QR will remove its ten frames when they reach ten years. So that's a total of 27 -- more than any carrier save EK ordered from Airbus. OZ has another six and they are facing a potential liquidity crisis this year.

EK likely will not keep its older frames as the leases expire and as they take the last few new examples off the line. BA claims to want more but can't make the financials work once refurbishment is added to the consideration. QF has stated they don't want more. EY is in a world of hurt and in no position to take more A380s. So from where will this supposed "small spike in demand" come -- and do you really see it absorbing the dozens of A380s which will be parked in the next few years? I doubt we'll even see a half dozen A380s find new owners.


That is your fantasy. Funny how ca.20 planes is now called "dozens". Hyperbole much?


I think most airlines would be happy to see their competitors deploy A380s at this point. For most carriers, the A380 seems to just be a very effective way to lose money.


It seems you are making up facts out of thin air as you go along but I'll bite. Please post the financials of airlines that are flying the Superjumbo that show the A380 is the source of them losing money and not the 737 for example.
 
mcg
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Tue May 07, 2019 9:18 pm

smartplane wrote:
BAorAB wrote:
I believe SQ leased each of these frames at approx. $1.6M per month for 10 years for a total return of $192M per plane. It was rumored that Dr Peters paid just over $200 per plane, so as long as they recover $8M or so for the scrap parts per plane they'd break even. I'm sure their vision was to turn a much larger profit envisioning a 2nd hand re-lease market, but the reality of these doomed birds probably came to light not long after they took their first deliveries. I think they will turn a small profit in the end, however $45M in scrap parts per frame is to optimistic, especially given the flurry of A380's with the certain similar fate right behind these two frames. (MH, EK, EY, AF, QF, LH) all won't be far behind as well as the remaining SQ birds as soon as their 779's start rolling in.

Commercial aircraft leases are complex, especially financially, with often only basic disclosures, depending on the finance and vehicles used.

Missing from our knowledge:

1. How, and in what form, were the OEM's retrospective discounts allocated to each party?

2. What EOL payments were agreed, and what proportion, if any, were forgiven?

3. Has the OEM contributed any payment or credit in relation to an original buyback agreement?

4. Was part of the financing loan (10 year lease - 12 year financing) subject to a third party guarantee?

5. Not uncommon in respect to sale/leaseback, does the lessee have any shared liability for capital value shortfall at EOL?

6. In respect to the top-up order, how were the retrospective credits allocated, both on the new aircraft, and in relation to the original 19 deliveries (with perhaps the credits for the five earliest accruing to the current lessor)?

7. Did any of the transactions 'pass through' SQ or a related party?

8. Tax implications of every step and ownership movement?

Devil is in the detail.

If any of the remaining EK A380 leases are disclosed, will be interesting to compare values and margins with earlier, current leases. And movement in the market outlook guidance for A380 capital values, mandatory for listed leasing entities.


Exactly, nobody knows all the numbers. (Other than the crew at Dr. Peters who did the economics).
 
ScottB
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed May 08, 2019 2:09 pm

Strato2 wrote:
It seems you are making up facts out of thin air as you go along but I'll bite. Please post the financials of airlines that are flying the Superjumbo that show the A380 is the source of them losing money and not the 737 for example.


No airline posts financials for individual fleets, but here's why LH is selling nearly half their fleet back to Airbus: https://simpleflying.com/lufthansa-sells-airbus-a380s/
With the A380, they said, ‘profitability is only possible on the most high-demand routes’.


Strato2 wrote:
Funny how ca.20 planes is now called "dozens".


I don't think it's just 20 unless EK actually keeps nearly all their fleet well past 12 years. 5 from AF, 6 from LH, 10 from QR, probably 6 from MH, maybe 6 from OZ. That's 33 even ignoring the EK elephant. And now EK is making noise about planning for a future without the A380, even though a modern long-haul aircraft like the A380 should be able to remain with an airline for 30 years given the limited cycles it sees. Delta's 747s, inherited from NWA, soldiered on for nearly 25 years on average and were retired in part due to a costly upcoming airworthiness directive. If they're not considering the idea of an early retirement for their A380s, the exit of the A380 is really beyond a reasonable planning horizon (i.e. we're taking about the 2040s) at this point.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed May 08, 2019 2:19 pm

Emirates has time limited leases. As new leases don't materialize at the same good conditions (as old leases didn't create the expected ROI to the investors) no new orders were possible. That killed the whole program.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed May 08, 2019 5:05 pm

No-show,

I believe you are correct in that EK cannot acquire A380s under the same lease conditions as the early examples. Investors bid an ROI. So terms are adjusted to achieve that ROI. This has increased the cost of leasing A380s.

EK is known for changing leases to improve financial conditions. They will buy out leases and then do a sale/leaseback at better terms with another leasing company. Often, this is how EK extends a lease to mitigate near term expenses. Sometimes EK negotiates down lease costs as on liquid aircraft, it is worth it to reduce profit to keep the customer. With the A380, it is not a liquid asset. I doubt leasing companies care if they are bought out, so there is no negotiating leverage. I speculate EK has to effectively do finance leasing instead of opperating leases.

Fewer leasing companies are financing widebodies. For example, Aircastle is going away from widebodies as narrowbody aircraft are faster to place profitably. This leaves GECAS and AerCAP are financing most widebodies and GECAS will look cross-eyed at a RR powered A380. Avolon will finance, but on their terms (read, on the terms Wells Fargo says is ok). Last I looked, Avolon sells most leases after 2 to 5 years for a quick profit. It used to be Aircastle was one of the buyers, not so much for widebodies today. If you search for AirCastle's annual report, you'll read how the first tier leasing companies are having to insist on bid buckets (multiple types of aircraft) to turn over their fleet. A380s would distort that bidding.

What Airbus and Boeing need is a P2F conversion on the A380 and 777 to help the secondary market. The issue with the A380 is few conversions to pay for new extra tall lift trucks to move that cargo.

Dr. Peters was wise to scrap early. I believe the A380 part market is about to become as flooded as the MD-80 part market. Boeing had to let go of the MD-80 part vendors as quantities for years were just too low (release vendors from the obligation to make 25+ spares per year that Boeing was obligated to buy..). I believe the current production rate is at those minimum buys.

Soon A380s will be at a scavenging only market for non-wear parts. That limits useful Service life.

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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed May 08, 2019 5:13 pm

ScottB wrote:
Strato2 wrote:
It seems you are making up facts out of thin air as you go along but I'll bite. Please post the financials of airlines that are flying the Superjumbo that show the A380 is the source of them losing money and not the 737 for example.


No airline posts financials for individual fleets, but here's why LH is selling nearly half their fleet back to Airbus: https://simpleflying.com/lufthansa-sells-airbus-a380s/
With the A380, they said, ‘profitability is only possible on the most high-demand routes’.


Strato2 wrote:
Funny how ca.20 planes is now called "dozens".


I don't think it's just 20 unless EK actually keeps nearly all their fleet well past 12 years. 5 from AF, 6 from LH, 10 from QR, probably 6 from MH, maybe 6 from OZ. That's 33 even ignoring the EK elephant. And now EK is making noise about planning for a future without the A380, even though a modern long-haul aircraft like the A380 should be able to remain with an airline for 30 years given the limited cycles it sees. Delta's 747s, inherited from NWA, soldiered on for nearly 25 years on average and were retired in part due to a costly upcoming airworthiness directive. If they're not considering the idea of an early retirement for their A380s, the exit of the A380 is really beyond a reasonable planning horizon (i.e. we're taking about the 2040s) at this point.

From your LH A380 link:
“In addition to the cost-effectiveness of the A350 and B787, the significantly lower CO2 emissions of this new generation of long-haul aircraft was also a decisive factor in our investment decision,” – Carsten Spohr, CEO, Lufthansa

Translation, we make more money, but we'll sell the fuel cost savings as a green initiative.

I believe part costs will drive an early A380 retirement. I believe buying back the LH A380s was part of a resale guarantee. However, Airbus will have a tough task keeping up quantities of parts.

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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed May 08, 2019 5:51 pm

lightsaber wrote:
Dr. Peters was wise to scrap early. I believe the A380 part market is about to become as flooded as the MD-80 part market. Boeing had to let go of the MD-80 part vendors as quantities for years were just too low (release vendors from the obligation to make 25+ spares per year that Boeing was obligated to buy..). I believe the current production rate is at those minimum buys.

Soon A380s will be at a scavenging only market for non-wear parts. That limits useful Service life.


I agree that the MD-80 (and MD-90) lend interesting color to potential forecasts for the A380 parts market in coming years, although arguably the A380 is less fungible than the MDD T-tails. It's a fairly simple matter to replace an MD-80/90 with an A320/738, but less easy to drop in a replacement for A380.

Because EK has close to half of the world's fleet of A380, their desire to continue operating the whale will be nearly as important as Airbus continuing manufacturer support. If EK finds the A380 indispensable in its network, they likely have the scale to keep the parts market alive. If they plan to just let the aircraft go off lease and not make deals to keep those frames (buy from lessor, enter into new leases, etc.) then they'll lose that scale. And it's not as if the managers running EK are too stupid to get this.

The 717 has value right now simply because DL has been willing to soak up virtually every single one they could get their hands on. Once DL starts to phase out the 717 you can stick a fork in it. The relationship between the A380 and EK is close to identical.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sat May 11, 2019 12:41 pm

lightsaber wrote:
I believe buying back the LH A380s was part of a resale guarantee.

Interesting thought.

Presumably this is a legacy of Leahy's aggressive sales tactics.

I wonder how much liability Airbus has with regard to buying back other A380s?

Airbus really doubled down its bets on A380, and the bets have all gone craps.
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 10:13 am

Revelation wrote:
lightsaber wrote:
I believe buying back the LH A380s was part of a resale guarantee.

Interesting thought.

Presumably this is a legacy of Leahy's aggressive sales tactics.

I wonder how much liability Airbus has with regard to buying back other A380s?

Airbus really doubled down its bets on A380, and the bets have all gone craps.

As do Boeing with LH 748i's. Watch them return 1:1 as the 779's are delivered, or earlier.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 10:21 am

smartplane wrote:
Revelation wrote:
lightsaber wrote:
I believe buying back the LH A380s was part of a resale guarantee.

Interesting thought.

Presumably this is a legacy of Leahy's aggressive sales tactics.

I wonder how much liability Airbus has with regard to buying back other A380s?

Airbus really doubled down its bets on A380, and the bets have all gone craps.

As do Boeing with LH 748i's. Watch them return 1:1 as the 779's are delivered, or earlier.

Do you have any evidence for this? Airbus has a history of making rash commitments (like agreeing to pay the difference in fuel costs in order to sell A346s) but other than taking some dubious trade-ins, I don’t believe Boeing does. And at least 748is can be converted into viable freighters.
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 10:53 am

that's just a waste of money they are to good to be scrapped.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 12:07 pm

wiggy wrote:
that's just a waste of money they are to good to be scrapped.

They are not any good unless somebody can make money flying them. Apparently nobody thinks they can.
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 4:18 pm

smartplane wrote:
As do Boeing with LH 748i's. Watch them return 1:1 as the 779's are delivered, or earlier.


I remain unconvinced Boeing has a buy-back clause on the 747-8, but we shall see.

And considering how long LH ran their 747-400 frames, the 747-8s might be kept around in favor of the A380s to anchor the top-end of their capacity model.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 5:05 pm

A lot of discussion centers around the financial case of building the A380. One thing not discussed as much and I think is germane is a huge reason for the low residual value and lack of resale demand of the A380 is no cargo conversion option available. The debate can rage if Airbus should have even built the A380 but moving past that when they committed to producing it not following through on a cargo variant was short sighted IMO. I understand why they didn’t, but aside from the debate of making the aircraft or not, once committed it seems, they really should have followed through on a cargo version.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 5:13 pm

MD80Ttail wrote:
A lot of discussion centers around the financial case of building the A380. One thing not discussed as much and I think is germane is a huge reason for the low residual value and lack of resale demand of the A380 is no cargo conversion option available. The debate can rage if Airbus should have even built the A380 but moving past that when they committed to producing it not following through on a cargo variant was short sighted IMO. I understand why they didn’t, but aside from the debate of making the aircraft or not, once committed it seems, they really should have followed through on a cargo version.


Converting an A380 from passenger to cargo operations would be extremely expensive. You have to rip out both the lower and upper decks to replace the CFRP floors with aluminum ones. The cost of this process is said to be why Boeing and IAI have not been able to make a business case for their respective 777 P2F programs and an A380 would be well-beyond that.

You then need to add A380-specific support infrastructure and while there were companies developing such back in the early days of the program when the A380 Freighter was still planned, those companies would need to restart all that and therefore I expect those parts to be expensive, as well.

I just don't see a P2F conversion as being something that would make economic sense when you could buy a new 747-8F for probably not much more money or return a parked 744P2F to service for a fair bit less money.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 5:19 pm

Stitch wrote:
smartplane wrote:
As do Boeing with LH 748i's. Watch them return 1:1 as the 779's are delivered, or earlier.


I remain unconvinced Boeing has a buy-back clause on the 747-8, but we shall see.

And considering how long LH ran their 747-400 frames, the 747-8s might be kept around in favor of the A380s to anchor the top-end of their capacity model.

Where is the speculation Boeing has a buy back clause coming from? Airbus has a history of them (mostly success, IMHO). Boeing has a history of buying used aircraft to start sales. But I'm not aware of buyback provisions.

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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 5:31 pm

lightsaber wrote:
Where is the speculation Boeing has a buy back clause coming from?


A couple of a.net posters have brought it up from time to time, but I have not seen them provide any hard evidence of such clauses being in the contract.

I know Boeing said they expected the Intercontinental to make up the strong majority of 747-8 family sales, but I don't believe they really thought that and it was just marketspeak to spread FUD about the A380. Boeing stopped development of the Intercontinental until LH signed on for 20 (and even then, it was not a firm decision to go forward with the model at first) and LH had long wanted a larger 747 so I see them more offering the incentives to Boeing rather than demanding them from Boeing. :stirthepot:
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 6:36 pm

smartplane wrote:
Revelation wrote:
lightsaber wrote:
I believe buying back the LH A380s was part of a resale guarantee.

Interesting thought.

Presumably this is a legacy of Leahy's aggressive sales tactics.

I wonder how much liability Airbus has with regard to buying back other A380s?

Airbus really doubled down its bets on A380, and the bets have all gone craps.

As do Boeing with LH 748i's. Watch them return 1:1 as the 779's are delivered, or earlier.

The first 779s were explicitly intended to replace either the A343s or the 744s. (I mention the A343 because the fact that Lufthansa even considered keeping the 744 around even a bit longer shows you how they feel about large aircraft) Lufthansa decided that they will be replacing the 744s. There are 13 744s left to replace, and 19 779s ordered. Unless there is a global economic crash of historic proportions, there is no way in hell Lufthansa would leave themselves with 19 less aircraft. Right now it is way to early to discuss the fate of the -8is. Perhaps if Lufthansa decide to order more 779s, or we start seeing A350s being based at Frankfurt, I will start to seriously consider the -8is time being limited
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 7:30 pm

A buyback need not necessarily result in a physical trade / movement of the aircraft, but simply a final tranche of compensation, often added to the retrospective credit on another purchase, perhaps further 777X's, or completely different model.

There is a correlation between the 748i units purchased (though one returned, LH still received retrospective credits on the full order), and 777X options initially agreed, and subsequently ordered.

Let's wait and see what happens as LH X's are delivered. LH may have announced by then the equivalent of QF's Project Sunset, to remove all remaining 4 engined aircraft from the fleet, though there is nothing to stop either OEM sweetening the buybacks to keep them with the customer and off their books.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 7:46 pm

Stitch wrote:
MD80Ttail wrote:
A lot of discussion centers around the financial case of building the A380. One thing not discussed as much and I think is germane is a huge reason for the low residual value and lack of resale demand of the A380 is no cargo conversion option available. The debate can rage if Airbus should have even built the A380 but moving past that when they committed to producing it not following through on a cargo variant was short sighted IMO. I understand why they didn’t, but aside from the debate of making the aircraft or not, once committed it seems, they really should have followed through on a cargo version.


Converting an A380 from passenger to cargo operations would be extremely expensive. You have to rip out both the lower and upper decks to replace the CFRP floors with aluminum ones. The cost of this process is said to be why Boeing and IAI have not been able to make a business case for their respective 777 P2F programs and an A380 would be well-beyond that.

You then need to add A380-specific support infrastructure and while there were companies developing such back in the early days of the program when the A380 Freighter was still planned, those companies would need to restart all that and therefore I expect those parts to be expensive, as well.

I just don't see a P2F conversion as being something that would make economic sense when you could buy a new 747-8F for probably not much more money or return a parked 744P2F to service for a fair bit less money.[/quote

You are making my point. Thank you. Airbus never delivered on the freighter variant form the factory thus affecting resale because no one will develop a freighter conversion due to costs. If there had been a freighter from the factory like the 747 program infrastructure would be in place for aftermarket conversions. The business case to develop a freighter conversion might make financial sense if there were cargo carriers committed to operating the A380, had infrastructure already in place and as “cheap” pax frames came to the end of their pax life. Also, it would have hedged the bet so to speak on the A380. One should have been able to project the increase in global commerce, internet shopping and hence the need for large cargo aircraft. Look at the MD-11. The economics wouldn’t make sense to operate as a pax plane but it’s a great cargo hauler. I believe a big reason MD11s were converted to cargo was because of the DC10 cargo program. Without that the MD11 probably would not have become a freight dog. The 747 would not still be in production if not for the cargo variant which started several gens back.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 7:47 pm

smartplane wrote:
There is a correlation between the 748i units purchased (though one returned, LH still received retrospective credits on the full order), and 777X options initially agreed, and subsequently ordered.


There is also a direct correlation between 748 purchase rights cancelled (20) and 777X initially firmly ordered (20).
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 10:20 pm

I'm curious which LH A380's are being returned and when : by MSN they have 38, 41, 44, 48, 61, 66, 69, 70, 72, 73, 146, 149, 175, 177 delivered from May 2012 to Oct 2015. 6 are to be phased out by 2023. Original order was for 15 +5 options in 2001, exercised 2 options in 2011, cancelled 3 in 2013, Production ends in 2021, Usually a buy back has a clause like "if production ends within 8 years of delivery" or "if production ends within 20 years of order". Such clauses protect the buyer if the model becomes an orphan. But I don't see a good trigger for 6, LH may feel that 8 fit their fleet plans well enough to keep some they could return.

https://www.airfleets.net/flottecie/Luf ... e-a380.htm

I see the possibility of 6 to 10 A380's that are in the same configuration, well maintained, and after say msn 60 being picked up on lease or purchase to an airline. But as BA noted, conversion of the interior is expensive because of certification issues as each fleet is customized. Hence, it would take a great deal to find a buyer. Very hard to see even 50 A380s get picked up by others as the leases expire.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 10:38 pm

JayinKitsap wrote:
I'm curious which LH A380's are being returned and when : by MSN they have 38, 41, 44, 48, 61, 66, 69, 70, 72, 73, 146, 149, 175, 177 delivered from May 2012 to Oct 2015. 6 are to be phased out by 2023. Original order was for 15 +5 options in 2001, exercised 2 options in 2011, cancelled 3 in 2013, Production ends in 2021, Usually a buy back has a clause like "if production ends within 8 years of delivery" or "if production ends within 20 years of order". Such clauses protect the buyer if the model becomes an orphan. But I don't see a good trigger for 6, LH may feel that 8 fit their fleet plans well enough to keep some they could return.

https://www.airfleets.net/flottecie/Luf ... e-a380.htm

I see the possibility of 6 to 10 A380's that are in the same configuration, well maintained, and after say msn 60 being picked up on lease or purchase to an airline. But as BA noted, conversion of the interior is expensive because of certification issues as each fleet is customized. Hence, it would take a great deal to find a buyer. Very hard to see even 50 A380s get picked up by others as the leases expire.


The plan is for 2022/2023, but by then LH is going to have a new management and cold feet about selling the A380's.
Their current strategy of moving A380 ops to MUC is just wrong, as is their whole EW saga. So I wouldn't worry about it too much.

I expect HND to open up to the A380 next year and expand the facilities for it. That alone is going to open up the market for about 20-30 A380's including LH which is running the B748I from FRA and a A350 from MUC. LH used to fly a A380 on FRA-NRT a while back, as did AF from CDG.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Sun May 12, 2019 11:03 pm

 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 13, 2019 12:31 am

Waterbomber2 wrote:
JayinKitsap wrote:
I'm curious which LH A380's are being returned and when : by MSN they have 38, 41, 44, 48, 61, 66, 69, 70, 72, 73, 146, 149, 175, 177 delivered from May 2012 to Oct 2015. 6 are to be phased out by 2023. Original order was for 15 +5 options in 2001, exercised 2 options in 2011, cancelled 3 in 2013, Production ends in 2021, Usually a buy back has a clause like "if production ends within 8 years of delivery" or "if production ends within 20 years of order". Such clauses protect the buyer if the model becomes an orphan. But I don't see a good trigger for 6, LH may feel that 8 fit their fleet plans well enough to keep some they could return.

https://www.airfleets.net/flottecie/Luf ... e-a380.htm

I see the possibility of 6 to 10 A380's that are in the same configuration, well maintained, and after say msn 60 being picked up on lease or purchase to an airline. But as BA noted, conversion of the interior is expensive because of certification issues as each fleet is customized. Hence, it would take a great deal to find a buyer. Very hard to see even 50 A380s get picked up by others as the leases expire.


The plan is for 2022/2023, but by then LH is going to have a new management and cold feet about selling the A380's.
Their current strategy of moving A380 ops to MUC is just wrong, as is their whole EW saga. So I wouldn't worry about it too much.

I expect HND to open up to the A380 next year and expand the facilities for it. That alone is going to open up the market for about 20-30 A380's including LH which is running the B748I from FRA and a A350 from MUC. LH used to fly a A380 on FRA-NRT a while back, as did AF from CDG.


Can I have the name of your dealer please ? I want to make sure to cross them off my list.

Even IF, HND was opened up to the 380, the airlines who use the 380 to NRT now would just swap over their aircraft. Opening one airport to the 380 is not going to magically create demand for 20-30 380's.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 13, 2019 3:12 am

jupiter2 wrote:
Waterbomber2 wrote:
JayinKitsap wrote:
I'm curious which LH A380's are being returned and when : by MSN they have 38, 41, 44, 48, 61, 66, 69, 70, 72, 73, 146, 149, 175, 177 delivered from May 2012 to Oct 2015. 6 are to be phased out by 2023. Original order was for 15 +5 options in 2001, exercised 2 options in 2011, cancelled 3 in 2013, Production ends in 2021, Usually a buy back has a clause like "if production ends within 8 years of delivery" or "if production ends within 20 years of order". Such clauses protect the buyer if the model becomes an orphan. But I don't see a good trigger for 6, LH may feel that 8 fit their fleet plans well enough to keep some they could return.

https://www.airfleets.net/flottecie/Luf ... e-a380.htm

I see the possibility of 6 to 10 A380's that are in the same configuration, well maintained, and after say msn 60 being picked up on lease or purchase to an airline. But as BA noted, conversion of the interior is expensive because of certification issues as each fleet is customized. Hence, it would take a great deal to find a buyer. Very hard to see even 50 A380s get picked up by others as the leases expire.


The plan is for 2022/2023, but by then LH is going to have a new management and cold feet about selling the A380's.
Their current strategy of moving A380 ops to MUC is just wrong, as is their whole EW saga. So I wouldn't worry about it too much.

I expect HND to open up to the A380 next year and expand the facilities for it. That alone is going to open up the market for about 20-30 A380's including LH which is running the B748I from FRA and a A350 from MUC. LH used to fly a A380 on FRA-NRT a while back, as did AF from CDG.


Can I have the name of your dealer please ? I want to make sure to cross them off my list.

Even IF, HND was opened up to the 380, the airlines who use the 380 to NRT now would just swap over their aircraft. Opening one airport to the 380 is not going to magically create demand for 20-30 380's.


SQ, CZ, LH, AF, BA, EK, QR, QF, EY, MH, TG, NH.
That's plenty from existing operators to get to at least 20 A380's.

NH alone could operate many routes with an A380 at the expense of duplicate routes from NRT: LHR, CDG, JFK, LAX. 7 aircraft.

NH and LH have MUC flight 5 minutes apart that could be joined into a joint venture flight.
FRA is a given.
3 aircraft

SQ several daily A380 to HND complementing the NRT ones andsmaller widebodies.
2 aircraft.

BA axing the NRT flight and merging it into an A380 flight. 1.5 aircraft.


The real reason for the A380 ban at HND is protectionism IMO. The ban decision was made when JAL was weak and under government control.
With the Olympics looming and traffic increasing fast, the domestic airlines in a strong position and with strong joint ventures, they will change their minds.
 
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Mon May 13, 2019 4:26 am

Waterbomber2 wrote:
jupiter2 wrote:
Waterbomber2 wrote:

The plan is for 2022/2023, but by then LH is going to have a new management and cold feet about selling the A380's.
Their current strategy of moving A380 ops to MUC is just wrong, as is their whole EW saga. So I wouldn't worry about it too much.

I expect HND to open up to the A380 next year and expand the facilities for it. That alone is going to open up the market for about 20-30 A380's including LH which is running the B748I from FRA and a A350 from MUC. LH used to fly a A380 on FRA-NRT a while back, as did AF from CDG.


Can I have the name of your dealer please ? I want to make sure to cross them off my list.

Even IF, HND was opened up to the 380, the airlines who use the 380 to NRT now would just swap over their aircraft. Opening one airport to the 380 is not going to magically create demand for 20-30 380's.


SQ, CZ, LH, AF, BA, EK, QR, QF, EY, MH, TG, NH.
That's plenty from existing operators to get to at least 20 A380's.

NH alone could operate many routes with an A380 at the expense of duplicate routes from NRT: LHR, CDG, JFK, LAX. 7 aircraft.

NH and LH have MUC flight 5 minutes apart that could be joined into a joint venture flight.
FRA is a given.
3 aircraft

SQ several daily A380 to HND complementing the NRT ones andsmaller widebodies.
2 aircraft.

BA axing the NRT flight and merging it into an A380 flight. 1.5 aircraft.


The real reason for the A380 ban at HND is protectionism IMO. The ban decision was made when JAL was weak and under government control.
With the Olympics looming and traffic increasing fast, the domestic airlines in a strong position and with strong joint ventures, they will change their minds.


You are determined, but you're living in a fantasy world.
 
User avatar
N14AZ
Posts: 3839
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 12:48 pm

Found a new picture of one of the ex-SQ airframes. Seems the MLG has been already removed
Image
Source: https://www.stern.de/reise/follow-me/en ... e=Standard

@ Moderators: the last post in this thread is six months old. That's the threshold upon which one has to ask for permission to post again. I hope it's okay like this. Otherwise, please delete and I will ask for permission.
 
DALCE
Posts: 1919
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 4:24 pm

My heart says it's a crime, but I know better than that. Still it's a sad sight to see these A380's being dismantled.
flown: F50,F70,CR1,CR2,CR9,CS3,E75,E90,143,AR8,AR1,733,735,736,73G,738,
753,763,744,77W,788,319,320,321,333,AB6.
 
TropicalSky
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 4:33 pm

Bet one of those main cabin doors is enroute to Sydney
 
ILNFlyer
Posts: 395
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 6:33 pm

DALCE wrote:
My heart says it's a crime, but I know better than that. Still it's a sad sight to see these A380's being dismantled.


It is sad. I don't think there are too many people who knew this was coming so soon for these aircraft.
 
ltbewr
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 6:55 pm

The A380 has its place, for long haul, operating at airports like LHR where bigger aircraft are the only way to get around slot and curfew limits and where consistent high load factors, especially premium seats. Airlines would rather operate smaller, more efficient aircraft that better match average seat demand, higher CASM and keep up frequency. That these and other A380's are being scrapped out is the reality of the limited demand for them with the ability to do major tax writeoffs. Early, less efficient versions, especially with the wiring issues of early builds will further shrink the demand for them.
 
EMBQA
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 8:02 pm

DALCE wrote:
My heart says it's a crime, but I know better than that. Still it's a sad sight to see these A380's being dismantled.

Pushing ten years is about when it happens, but keep in mind its only profitable to scrap for a short period of time. Once the parts recovered are in the Pool Market things will equal out.Expect to see it happen for the 787 soon as well.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
JayinKitsap
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Wed Nov 13, 2019 8:46 pm

SEPilot wrote:
Waterbomber2 wrote:
SEPilot wrote:
When Dr. Peters entered these leases I do not believe that they thought it was even remotely likely that the aircraft would end up being scrapped at the end of them. But they had to consider that possibility, and from the figures quoted, it seems they will at least not lose money outright. But I am sure they are not happy and expected a much better return. Lessors of future retiring A380s are likely to be even less happy, because the market for spare parts will soon be glutted, and there is no other airframe using those engines. And I expect that, now that production is going to soon cease, that other airlines are going to retire theirs sooner rather than later, even EK.

When Boeing designed the 747, it was nearly double the capacity of anything else flying at the time. It also had considerably more range and much better CASM than anything else available. This lasted, with one major upgrade, right into the 90s when the A340 and the 777 started cutting into its territory with comparable range and CASM, but less capacity. So Airbus tried to duplicate its success, but missed the mark rather badly. Using the same floor space per seat as other airliners the A380 would have carried around 800 passengers, but the problem was that no airline wanted to fly 800 passengers on one plane. Had there been demand for an 800 passenger plane the A380 could probably offered considerably better CASM than anything else for a long time. But Airbus designed the wing and structure for a 900 passenger plane, adding unneeded weight and drag for their 800 passenger plane. But since no one wanted 800 seats they only put 450-500 in, hoping that the extra space per passenger would give it enough appeal that it would sell on that basis. But that has never worked; while passengers complain about sardine accommodations they vote with their wallets and book them every time because they are cheaper. And the next thing that blindsided the A380 was the incredible increase in efficiency, started by the 77W and carried to a new level by the 787. The 77W offered basically the same range as the A380, nearly as good CASM, but in a much smaller package that was much cheaper to buy and fly. Then the 787 (and later the A350) offered even better CASM than the A380 could manage. And now the 779 is going to offer close to the passenger capacity that the A380 has been using but in a smaller plane that will offer even better CASM than the 787 or the A350. Had the A380 been optimized as a 500 passenger plane instead of a 900 passenger plane it might have stood a chance, but as designed it was doomed.



Maybe or maybe not.
A small spike in demand for the A380 and A380 values are going to skyrocket.
If you can't get a new one, you are looking at a market with limited supply. Airlines will have to think twice before returning their MSN's to the lessors, especially considering that they may end up with a competitor that could use the A380's against them.

The B787 does not offer better CASM than an A380 in any case, except MAYBE the B787-10. With the B787-10, things can get murky, but the B787-10 is not a cheap aircraft to buy. The B788 doesn't even come near an A380's CASM if you compare similar seating densities.
DY is dying proof that the B787's spectacularily low CASM is fictional. They aren't cheap to lease and in a A380-type configuration seating less than 200, 5 tons per hour is not nothing.

Where is this “small spike in demand” for the A380 going to come from? And where are your figures that the CASM of the 787 does not beat the A380? I have seen numerous charts showing CASM figures for airliners in current use, and they all show better CASM for the 787, the A350, and those that include it, the 779 (and I think even the 778) than the A380. And the 77W is not much more than the A380. If this is wrong show me some evidence. As I said, an A380 with similar passenger density to these planes would probably be competitive, but nobody can deal with it. And even EK is backing away from it. I believe that it was EK who initiated the cancellation of their remaining orders on account of their failure to get RR to improve the engines; my evidence is the order for A350s and A330neos that they had previously rejected. All other operators of the A380 except SQ have explicitly or implicitly stated that they do not want any more; SQ did replace the four they had, but did not add to them. Most of the other operators are reducing their fleets. And while CASM is not the only metric of an airliner’s effectiveness, it is one of the most important. What is being proved is that an airliner with the largest capacity cannot survive if it does not also offer the best CASM. And that is what killed the A380, and the 748i.


Airlines are very careful in their fleet selections with lots of prior experience and route simulations. If the A380 economics showed that it had a comparable CASM at a specific load factor, it would have sold well over the last 10 years, but it hasn't. I can't think of a better confirmation of your position than that - no airline at this time wanted to add 380's to the fleet - the spike in demand might get some lease returns to go to a 2nd home rather than parts, but still at prices well depressed from what was anticipated in the original leases.
 
moa999
Posts: 611
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Thu Nov 14, 2019 9:23 am

At the time it was launched the CASM was fine versus the 772/773 if you could fill it, but it's a limited set of routes that can fill it.

But it struggles going forward against the 777X and 350neo without a new engine and other enhancements, and any future sales would be even less so Airbus couldn't justify the investment unless it priced the aircraft unsustainably.
 
CHRISBA35X
Posts: 151
Joined: Fri Jun 07, 2019 11:40 am

Re: Dr. Peters begins scrapping of two ex-SIA A380s

Thu Nov 14, 2019 10:04 am

Revelation wrote:
747-600X wrote:
The Google Maps satellite view shows the 2 in the photograph in the original post as well as a third, parked elsewhere. The picture includes many other aircraft, almost all Airbuses. One stand has an A350 and a 777-200, both without engines...

https://twitter.com/a350blog/status/863529035095212041 says the A350 is MSN 4 and has been there since Feb 2016.

A photo taken in August:



Caption says:

Awaiting to be demolished at LDE


Cue lots of frothing Boeing fans all wetting their pants about the sight of an A350 going for scrap.

As for SKC my first A380 flight was on her, LHR-SIN way back in 2008. She was an absolute marvel. I couldn't get over how quiet and spacious she was. Probably my all time favourite flight in economy ever, I would say. Sad to see her go so quickly.
 
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MrHMSH
Posts: 2465
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Re: Dr. Peters begins scrapping of two ex-SIA A380s

Thu Nov 14, 2019 10:10 am

CHRISBA35X wrote:

Cue lots of frothing Boeing fans all wetting their pants about the sight of an A350 going for scrap.

As for SKC my first A380 flight was on her, LHR-SIN way back in 2008. She was an absolute marvel. I couldn't get over how quiet and spacious she was. Probably my all time favourite flight in economy ever, I would say. Sad to see her go so quickly.


Pedant's note:

The former 9V-SKC is still flying, it's the HiFly A380 (9H-MIP). The A380s being scrapped are 9V-SKA and SKB. SKC is my favourite as I flew in J on her which was simply wonderful. I've flown all the first 6 SQ A380s, they are great for fliers.

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