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PepeTheFrog
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Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 11:23 am

Airbus saw a strong financial performance in 2019 as operating income rose 19% to 6.95 billion euros, and revenue increased 11% to 70.48 billion.

However, a 1.21 billion euros charge related to the A400M and the bribery settlement plunged the company to a 1.36 billion euro net loss for 2019. Further charges include issues related to the A321neo ACF and a weak supplier.

Reuters: https://www.reuters.com/article/us-airb ... SKBN2070HG

Airbus expects the A400M to drag on for the coming years.
Good moaning!
 
astuteman
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 12:19 pm

PepeTheFrog wrote:
Airbus saw a strong financial performance in 2019 as operating income rose 19% to 6.95 billion euros, and revenue increased 11% to 70.48 billion.

However, a 1.21 billion euros charge related to the A400M and the bribery settlement plunged the company to a 1.36 billion euro net loss for 2019. Further charges include issues related to the A321neo ACF and a weak supplier.

Reuters: https://www.reuters.com/article/us-airb ... SKBN2070HG

Airbus expects the A400M to drag on for the coming years.


Focussing on the Airbus civil group (which oddly includes the A400M), what you see is

revenue of E54,775M ($59,700M)
Adjusted EBIT of E6,358M ($6,930M) - 11.7% underlying margin

Less
A380 write down of -E202M (-$220M)
A440M write down of -E1.212M (-$1,321M)
Bribery penalty attributed to civil group write down of -E2,739M (-$2,986M)

This latter derived from EBIT reported for the civil group of E2,205M ($2,403M)

When you analyse that, the A220,A320,A330,A350 programmes must have produced some $6.9Bn of underlying profit.
which has gone to pay for the A380, the A400M, and the Bribery Penalties.

Free Cashflow was about E3.5Bn ($3.8Bn)

Rgds
 
mxaxai
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 12:28 pm

astuteman wrote:
Focussing on the Airbus civil group (which oddly includes the A400M),

Odd. The program itself and its employees are definitely with Airbus Defence and Space. Perhaps it's listed there for accounting purposes?

Interestingly and in other news, the German state's investment into Airbus has 'earned' them 7 billion € since they bought 7.5% of Airbus in 2012. Airbus stock value has increased fivefold in the past 8 years.
 
peterinlisbon
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 1:31 pm

So where does this bribery money go? To the EU? Hopefully they will invest it sensibly, by propping up Alitalia.
 
anshabhi
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 3:37 pm

peterinlisbon wrote:
So where does this bribery money go? To the EU? Hopefully they will invest it sensibly, by propping up Alitalia.


This really sounds like Airbus paying back its old subsidies in the hopes of getting more in future
 
MIflyer12
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 4:20 pm

astuteman wrote:
When you analyse that, the A220,A320,A330,A350 programmes must have produced some $6.9Bn of underlying profit.
which has gone to pay for the A380, the A400M, and the Bribery Penalties.


That's one way to look at it. There's enough public info now to be confident that the A220 is not an Airbus profit machine at present, so it's all really 320/330/350.
 
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calstanford
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 4:22 pm

MIflyer12 wrote:
astuteman wrote:
When you analyse that, the A220,A320,A330,A350 programmes must have produced some $6.9Bn of underlying profit.
which has gone to pay for the A380, the A400M, and the Bribery Penalties.


That's one way to look at it. There's enough public info now to be confident that the A220 is not an Airbus profit machine at present, so it's all really 320/330/350.


Was there ANYONE who thought differently? A220 is on a ramp up. It's years from profitability. A380 is on the way out. So yea it's obviously A320/330/350 only.
 
trex8
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 4:27 pm

peterinlisbon wrote:
So where does this bribery money go? To the EU? Hopefully they will invest it sensibly, by propping up Alitalia.

Except for the @ $600 million which goes to the US government. Maybe Washington will give RLI to Boeing! :lol:
https://www.justice.gov/opa/pr/airbus-a ... -itar-case
 
morrisond
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 4:27 pm

calstanford wrote:
MIflyer12 wrote:
astuteman wrote:
When you analyse that, the A220,A320,A330,A350 programmes must have produced some $6.9Bn of underlying profit.
which has gone to pay for the A380, the A400M, and the Bribery Penalties.


That's one way to look at it. There's enough public info now to be confident that the A220 is not an Airbus profit machine at present, so it's all really 320/330/350.


Was there ANYONE who thought differently? A220 is on a ramp up. It's years from profitability. A380 is on the way out. So yea it's obviously A320/330/350 only.


Not to speak for Astuteman - but I assume he meant net between the programs. A220 and A380 losses (if any) would have come off that, so commercial airplanes net $6.9B.
 
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Revelation
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 13, 2020 7:41 pm

mxaxai wrote:
astuteman wrote:
Focussing on the Airbus civil group (which oddly includes the A400M),

Odd. The program itself and its employees are definitely with Airbus Defence and Space. Perhaps it's listed there for accounting purposes?

Actually one of the original selling points of the A400M was that it was going to be developed "on a commercial basis" thus Airbus rather than EADS was the lead on the project.

TFA says:

A weaker sales outlook for the military transporter led to a 1.21 billion euro charge and will continue to weigh in coming years, Airbus said on Thursday.

So maybe the new leadership is more realistic about A400M's sales outlook in the post "Bullshit Castle" era.
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astuteman
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 8:19 am

MIflyer12 wrote:
astuteman wrote:
When you analyse that, the A220,A320,A330,A350 programmes must have produced some $6.9Bn of underlying profit.
which has gone to pay for the A380, the A400M, and the Bribery Penalties.


That's one way to look at it. There's enough public info now to be confident that the A220 is not an Airbus profit machine at present, so it's all really 320/330/350.


I'm pretty sure that Airbus have stated that the A220 won't make profit until 2025.
So if you look at my earlier statement, this must mean that the A320,A330,A350 programmes produced more than $6.9Bn underlying profit.
(I will keep bolding the underlying aspect, as I am aware the headline figure is much lower, because of the $4Bn written down for the bribery scandal)

And the analysis can be taken further.
In the Airbus results they declared that 2019 was the year the A350 finally passed break-even.
This implies to me that the margin on the A350 component is also very small.

So now we're down the the A330 and A320

How much margin do we think there is on end of line A330 CEO's?
How much margin do we think there is on early A330NEO's, battling against aggressively priced and very capable 787's?

Personally I'm forced to conclude that the bulk of that underlying profit comes from the A320 programme.

I did a little exercise to see what that might look like.
I split the revenue by family based on 2019 deliveries vs list price on a pro-rata basis against the declared revenue
(please note that for both Boeing and Airbus, the published revenue is typically about 45% of the deliveries x list price calculation, a figure that can be corroborated against the declared backlog values for both companies).
This is what I came up with (assuming 10% loss on A220 and 5% profit on A330/A350.

A220 - revenue $1.9Bn - loss -$190m, - margin -10%
A330 - revenue $6.7Bn - profit +$190m, - margin +5%
A350 - revenue $16.2Bn - profit +$820m, - margin +5%
A380 - revenue $1.6Bn - loss -$220m, - margin -14%

bribery penalties - loss - -$3.92Bn
other losses - loss - -$385m

Revenue and profit from above.. Revenue - $26.3Bn - loss - -$3.6Bn
Airbus commercial figures...…… Revenue - $59.7Bn - EBIT - $2.4Bn

Which leaves

Attributable to A320 series - Revenue - $33.4Bn - profit - $6.0Bn - margin 18%

So I make the EBIT margin on the A320 series at the moment 18%.
Which I think will grow to around 20% as the CEO deliveries decline and early NEO launch orders wash out of deliveries.

I make the list value of the A320 backlog to be $800Bn, 45% of which is $360Bn actual value
(Boeing total backlog valued at $377Bn in accounts, for context)

$360Bn backlog at, say 20% margin means there is currently :-
$72Bn of EBIT locked into the A320 backlog

Food for thought :)

Rgds
 
astuteman
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 8:57 am

astuteman wrote:


As a post-script, all of the above figures can be reconciled to the published figures in the Airbus accounts by applying an exchange rate of 1E/1.09$

Rgds
 
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lightsaber
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 11:30 am

AirCbp wrote:
peterinlisbon wrote:
So where does this bribery money go? To the EU? Hopefully they will invest it sensibly, by propping up Alitalia.

:lol: :x :beady:

Well played. Thankfully, I haven't made this morning's coffee, or my keyboard would have been doomed.

Overall, the A380 write-off was chump change. Once the A321 production issues are resolved, cash will be readily available.
No worries overall. Just accounting rationalization after a period it wasn't as rational, in my opinion. Airbus has the funds to develop new aircraft, for myself, that is what I care about! ;)

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flee
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 12:00 pm

It is good to see that both the A330 and A350 are already in the black. So, after write offs for the A220, A380 and A400M, the bread and butter for Airbus are contributing profits and cash flow to finance future developments to the range. 2020 will see challenges but lets hope that Airbus can navigate them successfully.
 
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 4:54 pm

astuteman wrote:
Which leaves

Attributable to A320 series - Revenue - $33.4Bn - profit - $6.0Bn - margin 18%

So I make the EBIT margin on the A320 series at the moment 18%.
Which I think will grow to around 20% as the CEO deliveries decline and early NEO launch orders wash out of deliveries.

I make the list value of the A320 backlog to be $800Bn, 45% of which is $360Bn actual value
(Boeing total backlog valued at $377Bn in accounts, for context)

$360Bn backlog at, say 20% margin means there is currently :-
$72Bn of EBIT locked into the A320 backlog

Food for thought :)

Rgds

Thanks for the info.

That should help people understand that yes, airliners can be cash cows even when discounted by 50% and being in a competitive market.

It should also show why Boeing didn't want to leave this market to Airbus for several years while it went off and did the clean sheet NSA, and why MAX RTS is so important to Boeing's future cash flow.

A320 will be a cash cow going forward as A330neo production is going to be cut and A350 is going to stay flat ( ref: https://www.flightglobal.com/programmes ... 29.article ) while even more A32x rate increases are being proposed ( https://www.ainonline.com/aviation-news ... n-increase ) with 65-67 per month for 2023.
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astuteman
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 5:35 pm

Revelation wrote:
astuteman wrote:
Which leaves

Attributable to A320 series - Revenue - $33.4Bn - profit - $6.0Bn - margin 18%

So I make the EBIT margin on the A320 series at the moment 18%.
Which I think will grow to around 20% as the CEO deliveries decline and early NEO launch orders wash out of deliveries.

I make the list value of the A320 backlog to be $800Bn, 45% of which is $360Bn actual value
(Boeing total backlog valued at $377Bn in accounts, for context)

$360Bn backlog at, say 20% margin means there is currently :-
$72Bn of EBIT locked into the A320 backlog

Food for thought :)

Rgds

Thanks for the info.

That should help people understand that yes, airliners can be cash cows even when discounted by 50% and being in a competitive market.

It should also show why Boeing didn't want to leave this market to Airbus for several years while it went off and did the clean sheet NSA, and why MAX RTS is so important to Boeing's future cash flow.

A320 will be a cash cow going forward as A330neo production is going to be cut and A350 is going to stay flat ( ref: https://www.flightglobal.com/programmes ... 29.article ) while even more A32x rate increases are being proposed ( https://www.ainonline.com/aviation-news ... n-increase ) with 65-67 per month for 2023.


I think the "can" in "can be cash cows" is very relevant.
Both the major OEM's appear to have been tripping over their own feet in their efforts to self-harm.
Boeing with the obvious MAX situation.
Airbus with the almost perennial E1Bn thrown at the A400M and now E3.5Bn on top for penalty payments in what is looking like being far from the end of the story.
"If only".....

Getting back to your point though, the underlying figure shows just how resilient the big 2 are now, with that type of intrinsic profitability built into the core products.
$4Bn penalty? Er, OK
Another one on top next year? If you must …
It also shows just what market entrants are up against (C-series?)

As a point of order, I don't see A330 production being cut from what it was last year for the foreseeable future.
I think both it and the A350 will be pretty static for the next 2-3 years
I won't predict after that as it will depend on order inflow.
I suspect both will see incremental margin improvement as they mature, particularly the A350.
The A220 is also likely to see its loss rate trending towards zero as production increases.

Barring anything disrupting (exchange rates? Global thermonuclear war?), I believe that the underlying 11.6% EBIT margin exhibited by Airbus Commercial will trend upwards (slightly) over the next few years, for the reasons outlined above.
What is less clear is to what extent the underlying performance will get eroded by exceptionals.

Rgds
 
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 6:07 pm

astuteman wrote:
I think the "can" in "can be cash cows" is very relevant.
Both the major OEM's appear to have been tripping over their own feet in their efforts to self-harm.
Boeing with the obvious MAX situation.
Airbus with the almost perennial E1Bn thrown at the A400M and now E3.5Bn on top for penalty payments in what is looking like being far from the end of the story.
"If only".....

Getting back to your point though, the underlying figure shows just how resilient the big 2 are now, with that type of intrinsic profitability built into the core products.
$4Bn penalty? Er, OK
Another one on top next year? If you must …
It also shows just what market entrants are up against (C-series?)

As a point of order, I don't see A330 production being cut from what it was last year for the foreseeable future.
I think both it and the A350 will be pretty static for the next 2-3 years
I won't predict after that as it will depend on order inflow.
I suspect both will see incremental margin improvement as they mature, particularly the A350.
The A220 is also likely to see its loss rate trending towards zero as production increases.

Barring anything disrupting (exchange rates? Global thermonuclear war?), I believe that the underlying 11.6% EBIT margin exhibited by Airbus Commercial will trend upwards (slightly) over the next few years, for the reasons outlined above.
What is less clear is to what extent the underlying performance will get eroded by exceptionals.

Rgds

The FG article says A330 rate will be 40/year in 2020, Wiki gave the 2019 target as 50/year:

In April 2018, Airbus announced further rate cuts in response to weakening demand to 50 aircraft a year or 4-5 aircraft a month in 2019.[94]

Ref: https://en.wikipedia.org/wiki/Airbus_A330

The 2019 delivery rate was bumped up beyond the production rate due to aircraft produced earlier that were waiting for engines and some of that may happen in 2020.

Last August, Leeham suggested such a cut would be needed ( ref: https://leehamnews.com/2019/08/26/airbu ... r-a330neo/ ).

I think the focus going forward will be improving A320 delivery rates via streamlining the product offering and doing the new production line in TLS.

I think your numbers show why that's a wise strategy and the widebody market is kind of losing its sheen.

Both A and B have huge narrow body backlogs on the books and are reducing wide body production to avoid running out of orders.

The FG article says Airbus is largely past the issues with ACF integration but some customers are still reporting some deliveries six months behind schedule.

Interestingly enough, though, Airbus said the new TLS line would not result in a higher production rate, but of course that may just be posturing to avoid labor tensions.
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smartplane
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Re: Airbus announces € 1.36 billion net loss

Sat Feb 15, 2020 8:31 pm

Both A & B have two NB families. If new competitors don't fail, expect them to be acquired and removed.

Both A & B have two WB families, ignoring 748 and 767 which are both sunset models. Given the attractiveness (profit, risk, capital required, scaleability) of NB v WB, not difficult to see why neither company will make the next WB move until radical new engine technology is available.

Where production is growing, contingent retrospective credits (discounts) may not emerge for up to a decade, so the profitability calculated is overstated. Is any WB really making a profit after credits?

Also gives an idea of the pain Boeing is experiencing with 737 production and orders at a standstill. How B must wish they offered a 2nd wing option for the 787, and did a 767 to the 777, so no X. Ditto for A, who must just wish they offered an A330NEO PLUS.

And today we have an update on US v EU Trade Wars:
https://www.airbus.com/newsroom/press-r ... -2020.html

Where will that end? Tariffs only on the EU content? Or will there be US tariffs on US made engines and other equipment?
 
blueflyer
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 2:43 pm

What a lot of posters seem to be missing is that Airbus was under no obligation to take the write-downs below at their full amount this year. They could have spread them over multiple years, but chose not to.

I can't claim any insider knowledge, but if I had to guess, I'd say the decision was informed by Boeing's massive loss. No matter how "bad" Airbus' books look this year, Boeing's would be even worse, so it is a good year to write down as much as possible, if only to avoid having to do it in subsequent years when Boeing's results will not be hampered by the MAX debacle.

astuteman wrote:
A380 write down of -E202M (-$220M)
A440M write down of -E1.212M (-$1,321M)
Bribery penalty attributed to civil group write down of -E2,739M (-$2,986M)
 
morrisond
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 3:24 pm

blueflyer wrote:
What a lot of posters seem to be missing is that Airbus was under no obligation to take the write-downs below at their full amount this year. They could have spread them over multiple years, but chose not to.

I can't claim any insider knowledge, but if I had to guess, I'd say the decision was informed by Boeing's massive loss. No matter how "bad" Airbus' books look this year, Boeing's would be even worse, so it is a good year to write down as much as possible, if only to avoid having to do it in subsequent years when Boeing's results will not be hampered by the MAX debacle.

astuteman wrote:
A380 write down of -E202M (-$220M)
A440M write down of -E1.212M (-$1,321M)
Bribery penalty attributed to civil group write down of -E2,739M (-$2,986M)


Since you brought up Boeing's " Massive loss" I wonder how you characterize Airbus's result which was 2.3 times Boeing's "Massive Loss" of a net loss of $636 Million USD vs $1,470 Million USD for Airbus.

In the Boeing first Annual loss since 1997 thread posters characterized Boeing's loss as "Bleeding badly". Is this a Fatal Hemorrhage for Airbus? Of course not, and neither is it for Boeing (MAX issues).

Astuteman above has it right above - while significant expenses for both neither are fatal or that harmful in the long run.
 
Weatherwatcher1
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 5:55 pm

blueflyer wrote:
What a lot of posters seem to be missing is that Airbus was under no obligation to take the write-downs below at their full amount this year. They could have spread them over multiple years, but chose not to.

I can't claim any insider knowledge, but if I had to guess, I'd say the decision was informed by Boeing's massive loss. No matter how "bad" Airbus' books look this year, Boeing's would be even worse, so it is a good year to write down as much as possible, if only to avoid having to do it in subsequent years when Boeing's results will not be hampered by the MAX debacle.

astuteman wrote:
A380 write down of -E202M (-$220M)
A440M write down of -E1.212M (-$1,321M)
Bribery penalty attributed to civil group write down of -E2,739M (-$2,986M)


Good point. Airbus reported losing more money in 2019 than Boeing, but it won’t be getting anywhere near the publicity.
 
astuteman
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 7:31 pm

Weatherwatcher1 wrote:
blueflyer wrote:
What a lot of posters seem to be missing is that Airbus was under no obligation to take the write-downs below at their full amount this year. They could have spread them over multiple years, but chose not to.

I can't claim any insider knowledge, but if I had to guess, I'd say the decision was informed by Boeing's massive loss. No matter how "bad" Airbus' books look this year, Boeing's would be even worse, so it is a good year to write down as much as possible, if only to avoid having to do it in subsequent years when Boeing's results will not be hampered by the MAX debacle.

astuteman wrote:
A380 write down of -E202M (-$220M)
A440M write down of -E1.212M (-$1,321M)
Bribery penalty attributed to civil group write down of -E2,739M (-$2,986M)


Good point. Airbus reported losing more money in 2019 than Boeing, but it won’t be getting anywhere near the publicity.


I should think not.

Airbus posted an Operating EBIT of E1,339M ($1,460M), but a E2,700M ($2,945M) tax bill turned that into a E1,362M ($1,484M) net loss.
Boeing on the other hand posted an Operating loss of -$1,975M, but a $1,339M tax rebate turned that into only a $636M loss.

It took a $4,283M difference in the tax bill to produce the result you describe

It's no wonder the Boeing fans want that one kept quiet.
Boeing are that much bigger a drain on the taxpayer than Airbus?
A-net will have a melt-down once the truth finally becomes recognised.
So much for those tax breaks being so innocuous.


Rgds
 
morrisond
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 7:41 pm

astuteman wrote:
Weatherwatcher1 wrote:
blueflyer wrote:
What a lot of posters seem to be missing is that Airbus was under no obligation to take the write-downs below at their full amount this year. They could have spread them over multiple years, but chose not to.

I can't claim any insider knowledge, but if I had to guess, I'd say the decision was informed by Boeing's massive loss. No matter how "bad" Airbus' books look this year, Boeing's would be even worse, so it is a good year to write down as much as possible, if only to avoid having to do it in subsequent years when Boeing's results will not be hampered by the MAX debacle.



Good point. Airbus reported losing more money in 2019 than Boeing, but it won’t be getting anywhere near the publicity.


I should think not.

Airbus posted an Operating EBIT of E1,339M ($1,460M), but a E2,700M ($2,945M) tax bill turned that into a E1,362M ($1,484M) net loss.
Boeing on the other hand posted an Operating loss of -$1,975M, but a $1,339M tax rebate turned that into only a $636M loss.

It took a $4,283M difference in the tax bill to produce the result you describe

It's no wonder the Boeing fans want that one kept quiet.
Boeing are that much bigger a drain on the taxpayer than Airbus?
A-net will have a melt-down once the truth finally becomes recognised.
So much for those tax breaks being so innocuous.


Rgds


That's a tax rebate of taxes paid previously - they don't magically get money from nothing.

Airbus had to write a Cheque - Boeing got one so therefore their loss was smaller.

Airbus will most likely get some sort of credit next year for paying too much this year.
 
majano
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 8:00 pm

morrisond wrote:
astuteman wrote:
Weatherwatcher1 wrote:

Good point. Airbus reported losing more money in 2019 than Boeing, but it won’t be getting anywhere near the publicity.


I should think not.

Airbus posted an Operating EBIT of E1,339M ($1,460M), but a E2,700M ($2,945M) tax bill turned that into a E1,362M ($1,484M) net loss.
Boeing on the other hand posted an Operating loss of -$1,975M, but a $1,339M tax rebate turned that into only a $636M loss.

It took a $4,283M difference in the tax bill to produce the result you describe

It's no wonder the Boeing fans want that one kept quiet.
Boeing are that much bigger a drain on the taxpayer than Airbus?
A-net will have a melt-down once the truth finally becomes recognised.
So much for those tax breaks being so innocuous.


Rgds


That's a tax rebate of taxes paid previously - they don't magically get money from nothing.

Airbus will most likely get some sort of credit next year for paying too much this year.

Based just on this comment, I can say with a high level of confidence that you are not an accountant. :banghead: I know Airbus uses IFRS, so there will be no credit next year for paying too much this year. Even though Boeing uses US GAAP which I have only a functional knowledge of, your assertion about tax rebates for taxes previously paid sounds incorrect. That's more personal tax territory.
Late edit: the most likely reason for the high tax at Airbus despite the low profit is that the regulatory fine is not deductible for tax purposes.
Last edited by majano on Mon Feb 17, 2020 8:12 pm, edited 1 time in total.
 
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Revelation
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 8:07 pm

astuteman wrote:
It's no wonder the Boeing fans want that one kept quiet.
Boeing are that much bigger a drain on the taxpayer than Airbus?
A-net will have a melt-down once the truth finally becomes recognised.
So much for those tax breaks being so innocuous.

100 out of the Fortune 500 paid 0% or less effective tax rate last year so I don't think we shall see such an meltdown.

What I do expect is someone pointing out how Airbus is free to set up shop in Washington State and get similar tax considerations.

It's working out well for Airbus in Mobile, AL so maybe Washington State is next.

It seems to be working much better than Boeing asking Congress for RLI.
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astuteman
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 8:31 pm

Revelation wrote:
It seems to be working much better than Boeing asking Congress for RLI.


The only thing you don't ask is why Boeing don't do that but go back to the tax table again and again.....

I've done the maths for you before, but you seem to want to avoid it.

The cumulative effect of the tax breaks is huge
 
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 8:47 pm

astuteman wrote:
Revelation wrote:
It seems to be working much better than Boeing asking Congress for RLI.


The only thing you don't ask is why Boeing don't do that but go back to the tax table again and again.....

Simples: RLI is viewed here as totally unacceptable (government picking winners and losers, yada yada) whereas paying zero/little tax is not (makers gonna make, takers gonna take, yada yada).

astuteman wrote:
I've done the maths for you before, but you seem to want to avoid it.

The cumulative effect of the tax breaks is huge

Difficult to compare because the amount Airbus pays back on each plane is secret.
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FiscAutTecGarte
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 9:46 pm

This thread has attracted the attention of a few posters who could use a swift kick in the nads. Man... let us enjoy aviation without fighting with each other all of the time. And this doesn't need to be another A vs B thread. Crud! I've been a member of a.net nearly since it's inception (different user name that was retired recently thanks to identify theft!) and this is the worst I've seen this bickering. I just put another two of you on my ignore list!

It's a big loss, but a one-time event was largely responsible. A220/A400 programs will continue to recover. A380 will no longer be much of a drag. A320/A330/A350 will continue to print money. Healthy prospects for the company.
learning never stops...

FischAutoTechGarten is the full handle and it reflects my interest. It's abbreviated to fit A.net short usernames.
 
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SheikhDjibouti
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Re: Airbus announces € 1.36 billion net loss

Mon Feb 17, 2020 10:53 pm

Revelation wrote:
astuteman wrote:
It's no wonder the Boeing fans want that one kept quiet.
Boeing are that much bigger a drain on the taxpayer than Airbus?
A-net will have a melt-down once the truth finally becomes recognised.
So much for those tax breaks being so innocuous.

100 out of the Fortune 500 paid 0% or less effective tax rate last year so I don't think we shall see such an meltdown.

What I do expect is someone pointing out how Airbus is free to set up shop in Washington State and get similar tax considerations.

"Someone"? Why wait for "someone" when you have already written all the necessary words... :scratchchin:

So...have you considered what you actually wrote there?
Taken to it's logical conclusion; Airbus would have better financials if they were 100% an American company, operating exclusively out of the USA.

Case proved, m'lud.

As for a level playing field....God bless free trade. God bless 'murrica. :stirthepot:
Nothing to see here; move along please.
 
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Re: Airbus announces € 1.36 billion net loss

Tue Feb 18, 2020 1:05 am

SheikhDjibouti wrote:
"Someone"? Why wait for "someone" when you have already written all the necessary words... :scratchchin:

So...have you considered what you actually wrote there?
Taken to it's logical conclusion; Airbus would have better financials if they were 100% an American company, operating exclusively out of the USA.

Case proved, m'lud.

As for a level playing field....God bless free trade. God bless 'murrica. :stirthepot:

That's a nice conversation you're having with yourself, I'll just leave you to it.
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RickNRoll
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Re: Airbus announces € 1.36 billion net loss

Tue Feb 18, 2020 7:09 am

The A400M is a disaster as a program. Why has it gone so wrong?
 
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flee
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Re: Airbus announces € 1.36 billion net loss

Tue Feb 18, 2020 9:47 am

RickNRoll wrote:
The A400M is a disaster as a program. Why has it gone so wrong?

There are many factors that caused the A400M to be a never ending money pit. Here are some that I can think of.

1 First time Airbus is developing a military transport on such a scale - project was led by the Spanish division that was not very well managed.
2 Development targets were way too ambitious and wide.
3 Budgets are not properly determined and controlled.
4 Partner Governments did not honour their order commitments, cutting their initial orders significantly.
5 Engine partners had some development difficulties, and were also over budget.
6 Export orders did not materialise as expected.

I think that there are many more reasons but these should fall broadly under the categories above. Airbus did a good job rescuing the project that went totally out of control and required several renegotiations with the partner governments.

Moving forward, Airbus should look at the long term viability of this project. They need to quickly deliver on the performance and capability promises if they are to stand any chance of securing more orders. If more orders are not forthcoming, then production will cease. That means that they will have almost no chance of reducing the losses incurred.
 
blueflyer
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Re: Airbus announces € 1.36 billion net loss

Wed Feb 19, 2020 8:16 am

To flee's excellent list, I'd add that it was tasked with too many missions in order to meet every EU country's needs. It is a high-payload and long-range plane; a cargo carrier and a troop transport; a medevac aircraft as well as a plane paratroopers can quickly jump out of; and also an aerial refueller.
 
seb76
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Re: Airbus announces € 1.36 billion net loss

Wed Feb 19, 2020 9:34 am

morrisond wrote:
blueflyer wrote:
What a lot of posters seem to be missing is that Airbus was under no obligation to take the write-downs below at their full amount this year. They could have spread them over multiple years, but chose not to.

I can't claim any insider knowledge, but if I had to guess, I'd say the decision was informed by Boeing's massive loss. No matter how "bad" Airbus' books look this year, Boeing's would be even worse, so it is a good year to write down as much as possible, if only to avoid having to do it in subsequent years when Boeing's results will not be hampered by the MAX debacle.

astuteman wrote:
A380 write down of -E202M (-$220M)
A440M write down of -E1.212M (-$1,321M)
Bribery penalty attributed to civil group write down of -E2,739M (-$2,986M)


Since you brought up Boeing's " Massive loss" I wonder how you characterize Airbus's result which was 2.3 times Boeing's "Massive Loss" of a net loss of $636 Million USD vs $1,470 Million USD for Airbus.

In the Boeing first Annual loss since 1997 thread posters characterized Boeing's loss as "Bleeding badly". Is this a Fatal Hemorrhage for Airbus? Of course not, and neither is it for Boeing (MAX issues).

Astuteman above has it right above - while significant expenses for both neither are fatal or that harmful in the long run.


The losses Airbus made shall not be minimized of course, but in my perception, the situation of Airbus and Boeing is totally different.
In one year time, Airbus decided to clean the house in quite a radical way. So indeed, terrible result for 2019, but they invested in the ex-bombardier C-Serie and will now be able to ramp up the production, the A380 becomes history and the corruption case is settled, so only the A440M may continue to cause some limited amount of nuisance while all other programs seem to be in rather good shape and generating revenue. The future looks bright. Airbus is just about to reap the fruits of what they have smitten. No doubt the result of 2020 will be spectacular.

On the other hand, I'm not sure the not so bad results of BA for 2019 completely reflect the extend of the damages inflicted by the 737 grounding. I keep believing that the disruptive 787 is a good program despite the initial hiccups and that the 777x program will eventually be fine, which will bring some oxygen, but that will not be this year yet. The extend of the damages on the 737 program are not known yet. How to properly restart the supply chain, how to deliver all the planes needing modifications, how much compensations to pay to the airlines (some will be delivered more than two years late), etc... This will leave marks that will not go away soon...
 
mxaxai
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Re: Airbus announces € 1.36 billion net loss

Wed Feb 19, 2020 11:02 am

flee wrote:
Moving forward, Airbus should look at the long term viability of this project. They need to quickly deliver on the performance and capability promises if they are to stand any chance of securing more orders. If more orders are not forthcoming, then production will cease. That means that they will have almost no chance of reducing the losses incurred.

Airbus has reduced the production rate to 8 per year. With a backlog of ~ 87 aircraft, this ensures deliveries continuing into the 2030s. All current customers have received some aircraft or will receive their first soon, so none of them have a pressing need for high production rates; their military's basic transport needs are already fulfilled.
Capability wise, Airbus will deliver the full capabilities as specified by their contracts from this year onwards, including retrofits to the existing fleet.

The problem with further orders is that the original customers have throttled their defense spending, and potential new customers either don't have the funds, the need or are not politically aligned (enough) with the EU. It's good that they do the write-down now rather than hope for orders that may not come.
 
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Re: Airbus announces € 1.36 billion net loss

Wed Feb 19, 2020 11:33 am

Revelation wrote:
astuteman wrote:
Revelation wrote:
It seems to be working much better than Boeing asking Congress for RLI.


The only thing you don't ask is why Boeing don't do that but go back to the tax table again and again.....

Simples: RLI is viewed here as totally unacceptable (government picking winners and losers, yada yada) whereas paying zero/little tax is not (makers gonna make, takers gonna take, yada yada).

astuteman wrote:
I've done the maths for you before, but you seem to want to avoid it.

The cumulative effect of the tax breaks is huge

Difficult to compare because the amount Airbus pays back on each plane is secret.


The only unacceptable part in regards to the RLI was, the low interest rates. That is why the numbers by Boeing friends and Airbus friends are so far apart. Boeing friends talk about the whole amount of the loan as it was a subsidy. But the loan is to be repaid.
The RLI is a mixed blessing, both for the governments, as well as Airbus. In regards to the A320 family, Airbus still pays royalties on each delivered frame, even though the loan has been repaid. For the governments providing the RLI, there is always the possibility of losing that money.
For the A380, Airbus tries to get the government to forgo part of the loans, the governments being a risk sharing partner. Up to now that was not successful.

We will see how the other side of the coin comes out, where the EU claimed the tax refunds to Boeing being an illegal subsidy. Here we are also talking about considerable amounts.

I regards to the tax bill for Airbus. Airbus is paying taxes on the taxable profits in 2019. The taxable profits are not reduced by the 3.6 Billion EUR fine. That goes of the profit after taxes.
 
NZ516
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Re: Airbus announces € 1.36 billion net loss

Wed Feb 19, 2020 12:05 pm

Just hope Airbus stays away from doing bribes in the future. It's been a very expensive mistake to make.
 
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Re: Airbus announces € 1.36 billion net loss

Wed Feb 19, 2020 2:34 pm

flee wrote:
There are many factors that caused the A400M to be a never ending money pit. Here are some that I can think of.

1 First time Airbus is developing a military transport on such a scale - project was led by the Spanish division that was not very well managed.
2 Development targets were way too ambitious and wide.
3 Budgets are not properly determined and controlled.
4 Partner Governments did not honour their order commitments, cutting their initial orders significantly.
5 Engine partners had some development difficulties, and were also over budget.
6 Export orders did not materialise as expected.

I think that there are many more reasons but these should fall broadly under the categories above.

I would add that availability has been poor, largely due to the engines and gearboxes.

These issues have led to mandatory inspections after small numbers of flight hours so the planes have poor availability.

Also since the functionality has been late, planes spend a lot of time being reworked to add functionality that was supposed to be there when the planes were delivered, again reducing availability.

flee wrote:
Moving forward, Airbus should look at the long term viability of this project. They need to quickly deliver on the performance and capability promises if they are to stand any chance of securing more orders. If more orders are not forthcoming, then production will cease. That means that they will have almost no chance of reducing the losses incurred.

I think additional sales outside the core customers aren't going to change the fortunes of the program.

blueflyer wrote:
To flee's excellent list, I'd add that it was tasked with too many missions in order to meet every EU country's needs. It is a high-payload and long-range plane; a cargo carrier and a troop transport; a medevac aircraft as well as a plane paratroopers can quickly jump out of; and also an aerial refueller.

Having all that functionality isn't a bad thing, look at C130.

Whether you need the amount of payload/range for most of those missions is dubious.

Yet the payload/range requirement is what drove the need to make the engines such a challenge to develop.

The original program was said to be twice the C130 at twice the price.

Surely they've missed on the price part, and are only slowly catching up on functionality and not there on reliability.

The real issue is the fleet size is small compared to C130 so less frames to write off the development cost against.

The high cost and the low availability makes it easier for C130 operators to just stick with what they are already comfortable with.

This in turn keeps the fleet size small so spares and training are more expensive.

It's kind of damning to see France and Germany purchasing C130J along with UK who never gave up their leased C130J.
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SheikhDjibouti
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 20, 2020 3:40 am

Revelation wrote:
The original (A400M) program was said to be twice the C130 at twice the price.

The high cost and the low availability makes it easier for C130 operators to just stick with what they are already comfortable with.

It's kind of damning to see …... UK who never gave up their leased C130J.

"never gave up their leased C130J" ?

I'm ashamed to admit the RAF is not my specialist subject, but I'm intrigued by your comment. It is presumably old news to everyone else, but not to me.
Yes, I have already done a quick Google search, and came up with zilch - that's why I'm asking. Please explain both the leasing, and the not giving back.

I guess what you are suggesting is that the RAF leased additional (?) C130s because the A400M is falling short. Yes/no? Don't let me put words into your mouth. :duck:
If so, I don't recall them receiving any in the first place, let alone hanging on to them beyond a particular end date.

Meanwhile, in contrast to the above, the RAF are busy (in a slow English kinda way) attempting to offload ten of their existing bought-and-paid-for C-130J fleet.
Trawling through the a.net photo database I found one of the ten RAF C-130Js is now with Bangladesh AF (apparently with another four to follow), one has gone to Bahrain AF (with a second to follow), and one is slated to become the next Blue Angels "Fat Albert" (a bargain at $29.7million). Who knew?

But I admit disposing of eight older C130Js doesn't preclude them from leasing shiny new ones, if you have a source for that.

(RSVP - I would hate to think I was just having another conversation with myself.... )

Ex RAF ZH881, now Bangladesh AF,...….. and ex RAF ZH886 leaving Cambridge for sunnier duties with Bahrain AF
Nothing to see here; move along please.
 
astuteman
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 20, 2020 12:10 pm

Revelation wrote:
Simples: RLI is viewed here as totally unacceptable (government picking winners and losers, yada yada) whereas paying zero/little tax is not (makers gonna make, takers gonna take, yada yada).


I think these are the type of "yada yada" responses that I find really difficult to understand.
I am sure that RLI is viewed as unacceptable by predominantly US posters on A-net, pretty clearly including yourself.
If it was unacceptable to government entites, then why was the 1992 agreement signed in the first place?
Do we have any documented evidence that the USG find RLI in principle "unacceptable"?

As for "government picking winners and losers, yada yada", I can't accept that this is a characteristic of RLI but not of tax breaks.

https://www.washingtonpost.com/blogs/go ... ach-state/

This article in Washington Post is pretty interesting... No government picking winners eh?

The state subsidy data was released Tuesday in conjunction with similar federal data and a matching report—”Uncle Sam’s Favorite Corporations”—which reviews the grants, loans and other subsidies distributed by the federal government since 2000. Over the course of those 15 years, the federal government has distributed $68 billion in grants and special tax credits to businesses, with two thirds of that transferred to large corporations. Six companies have received $1 billion or more, while 21 have received $500 million or more.
“We now see that big business dominates federal subsidy spending the way it does state and local programs,”


Which business is the biggest recipient?

The aerospace giant alone has received $13 billion in subsidies.

Top 30 State/Local Subsidy recipients

Boeing $13.4Bn
Intel $5.9Bn
Alcoa $5.6Bn
Ford $2.5Bn
Sempra Energy $2.5Bn


I stopped the quote at the top 5

Five corporations have achieved a trifecta, ranking among the 50 largest recipients of three kinds of funds: state subsidies; federal grants and tax credits; and federal loans, loan guarantees and bailout assistance. Those businesses, which Good Jobs First defines as the “most successful at obtaining subsidies from all levels of government” are Boeing, Ford Motor, General Electric, General Motors and JPMorgan Chase.


Boeing say they won't benefit from the $8.7Bn offered by Washington State until 2020.
That means that about $4.3Bn of the $13Bn has already been rebated by Federal and Local government, and now sits as net cash in the business.

The $8.7Bn tax package, although dependent on the 777X, is not specific to it

https://en.wikipedia.org/wiki/Competiti ... e_note-146

The $8.7bn over 40 years incentive to Boeing to manufacture the 777X in the state includes $4.2bn from a 40% reduction in business taxes, £3.5bn in tax credits for the firm, a $562m tax credit on property and buildings belonging to Boeing, a $242m sales tax exemption for buying computers and $8m to train 1000 workers


Revelation wrote:
Difficult to compare because the amount Airbus pays back on each plane is secret.


The only quotes I can find say:-

Of the £250m RLI advanced for the A320 in 1984, all of it was repaid by 1997, and by the end of 2000, over £500m had been paid.
Since 2000, Airbus have delivered 8,200 x A320 Series.
As you say, it is hard to find what the royalty payments are, but any reasonable number that we might come up with amounts to a very large quantity of money repaid to Government that is no longer in Airbus's cash pile. Even if it is only E250k per aircraft, that's over E2Bn since the year 2000

Airbus said that at the time of the WTO case it had repaid 40% more RLI than it had received. Other than linking to their quote, I can't independently evidence that.
I'm not going to try to derive the A320 royalty from that.

It is noteworthy in the Airbus accounts that the amount owing to Government in the liabilities was lower in 2006, immediately prior to the A350XWB launch, than it was in 1999, before the A380 RLI was received, implying that in the period of A380 development, Airbus repaid more RLI overall than they actually received for the A380.

It seems clear to me that Airbus have less cash in their bank account as a result of repaying their RLI and royalties, whereas Boeing have more cash in their bank account as result of not having to pay tax in the past.

On that basis I believe the A-net alternative fact of "tax breaks = good, yada yada, RLI = bad, yada yada" is fundamentally misleading and inaccurate.
I'd love to believe it was possible to have an intellectual conversation about this, but experience suggests that hope will prove unfounded.
At the end of the day I'll survive without achieving an alignment...

Either way, it's clear that a couple of posters upthread who seem desperate to make the argument that "Boeing makes more profit even with the MAX disaster that Airbus does without" have to conveniently ignore that there was a $4Bn difference in the tax paid by each company, for whatever reason.

Rgds
 
mxaxai
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 20, 2020 3:20 pm

As a first measure to adjust to changed market conditions, Airbus has announced job cuts for ~2300 employees in their defence & space acitivities across all countries. That's about 6.7 % of their entire workforce in that sector.
More than half of those (~1400) will hit Germany and Spain, i. e. focused on A400M production and development. Bremen, where Ariane upper stages, the Orion life-support module and A400M fuselages are built, will be shrunk by 20 % (305 employees). Sevilla, FAL for all Airbus military fixed wing transports, will lose 20 % as well (600 employees). Whether employees will get reassigned to other programs remains to be seen.

Interestingly, the 737MAX debacle is causing 100 Airbus workers to be laid off at El Puerto de Santa Maria, because they should be manufacturing parts for the 737.

https://www.bbc.com/news/business-51560701
https://www.theolivepress.es/spain-news ... andalucia/
https://www.lavozdigital.es/cadiz/provi ... ticia.html
 
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 20, 2020 4:03 pm

SheikhDjibouti wrote:
"never gave up their leased C130J" ?

Thanks for the corrections. I was conflating the fact that C17s were initially leased ( https://boeing.mediaroom.com/2000-05-16 ... master-III ) and there was a plan to lease C130Js as A400M delays stacked up ( https://www.pprune.org/archive/index.php/t-365053.html ). It seems the plan is to keep 14 ships through 2035 ( https://www.janes.com/article/90029/uk- ... te-to-2035 ) so the rest are up for grabs.

astuteman wrote:
It seems clear to me that Airbus have less cash in their bank account as a result of repaying their RLI and royalties, whereas Boeing have more cash in their bank account as result of not having to pay tax in the past.

True, but if it weren't for outright grants at the start that got reshaped into RLI for each program there would be no Airbus.

This highlights the value of up front money.

astuteman wrote:
On that basis I believe the A-net alternative fact of "tax breaks = good, yada yada, RLI = bad, yada yada" is fundamentally misleading and inaccurate.
I'd love to believe it was possible to have an intellectual conversation about this, but experience suggests that hope will prove unfounded.
At the end of the day I'll survive without achieving an alignment...

While there's no doubt the ongoing payments are a detriment to Airbus and a benefit to taxpayers, I'd say a dollar before the program is launched and one that may never be paid back is much more valuable than one paid as a commission on each sale after the program is producing income.

The fact you have so much data from the US side and you can't get anything like a full accounting from the EU suggests the EU has something to hide.

It really wouldn't be hard to do so, a single spreadsheet of all grants and all paybacks would be pretty easy to generate, no?

Meanwhile (breaking news!) Boeing proposes suspending the aerospace tax benefit that you suggest is so important ( ref: https://www.seattletimes.com/business/b ... n-tariffs/ ) in the hopes of avoiding EU tariffs and reaching a long term resolution.
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astuteman
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Re: Airbus announces € 1.36 billion net loss

Thu Feb 20, 2020 4:59 pm

Revelation wrote:
True, but if it weren't for outright grants at the start that got reshaped into RLI for each program there would be no Airbus.

This highlights the value of up front money.


That there would be no Airbus, or no A320, or no A330 ever, is up for debate.
There's no question that RLI facilitated it (them)
I'm pretty sure that there would have been no A380 without RLI
I'm equally sure the A380 was the catalyst for all of this WTO activity.
Most parties seemed pretty sanguine with the 1992 agreement until then.

I think my point is that RLI was a "jam today" to get Airbus started.
At this point in history Airbus are still paying for the jam.

Revelation wrote:
While there's no doubt the ongoing payments are a detriment to Airbus and a benefit to taxpayers, I'd say a dollar before the program is launched and one that may never be paid back is much more valuable than one paid as a commission on each sale after the program is producing income
.

Agree again.
But yet again that is taking each instance in isolation.
Today, 4 decades down the line, Airbus still have to pay for their "jam", whilst Boeing, according to the calculations above, have pocketed $4.3Bn worth of free jam that they can use to make the next sandwich.
We are getting wrapped up in an argument between instance and cumulation IMO.
And for me, the cumulative effect is demonstrated by the difference in tax behaviour in 2019 (although I think the E3.5Bn forward provision for fines has not attracted tax relief).

Revelation wrote:
Meanwhile (breaking news!) Boeing proposes suspending the aerospace tax benefit that you suggest is so important ( ref: https://www.seattletimes.com/business/b ... n-tariffs/ ) in the hopes of avoiding EU tariffs and reaching a long term resolution.


No kidding.
Getting slapped with $8Bn - $10Bn of tariffs is going to hurt a lot more than losing $8Bn over the next 20 years.
Just a couple of quotes from the article for those that can't be bothered..

The dramatic shift in direction will help resolve - to Boeing's advantage - an international trade dispute at the World Trade Organisation (WTO)


While the idea of eliminating the tax breaks will find ready acceptance in Olympia, the bill as presented on behalf of Boeing contains a couple of potential controversial issues related to possible later reinstatement of the tax break or an equivalent measure


Boeing in 2018 saved a total of $230 million from the entire package of aerospace incentives


For what its worth, I believe both businesses are now big enough not to need aerospace incentives.
I'd like to see the tax breaks stopped, all the RLI repaid in full, and the royalty payments stopped.

But states on both sides of the Atlantic will always want to attract investment from big companies.
How those states then deal with the programmes being undertaken in Russia and China, funded completely by state aid - I don't know.

Rgds
 
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PepeTheFrog
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Re: Airbus announces € 1.36 billion net loss

Fri Feb 28, 2020 11:19 pm

Revelation wrote:
Meanwhile (breaking news!) Boeing proposes suspending the aerospace tax benefit that you suggest is so important ( ref: https://www.seattletimes.com/business/b ... n-tariffs/ ) in the hopes of avoiding EU tariffs and reaching a long term resolution.


According to Leeham, the EU will likely go ahead with tariffs on Boeing products, even if Boeing exits the tax benefit.
Good moaning!
 
Sokes
Posts: 1249
Joined: Sat Mar 09, 2019 4:48 pm

Re: Airbus announces € 1.36 billion net loss

Tue Mar 10, 2020 10:20 am

NZ516 wrote:
Just hope Airbus stays away from doing bribes in the future. It's been a very expensive mistake to make.


There are a lot of government owned airlines in countries where bribe doesn't take the form of taxable advisory contracts. I doubt bribes will disappear.

About the A400:
I'm not qualified to judge, it's a real question: was it about profits or was it about learning carbon fiber structures and designing a new turboprop?
I just wonder because orders were never huge.
Why can't the world be a little bit more autistic?
 
mxaxai
Posts: 1807
Joined: Sat Jun 18, 2016 7:29 am

Re: Airbus announces € 1.36 billion net loss

Tue Mar 10, 2020 10:34 am

Sokes wrote:
NZ516 wrote:
Just hope Airbus stays away from doing bribes in the future. It's been a very expensive mistake to make.


There are a lot of government owned airlines in countries where bribe doesn't take the form of taxable advisory contracts. I doubt bribes will disappear.

About the A400:
I'm not qualified to judge, it's a real question: was it about profits or was it about learning carbon fiber structures and designing a new turboprop?
I just wonder because orders were never huge.

It was supposed to be a lot cheaper both to develop and to build. And it was supposed to sell in much larger numbers, with a goal to achieve the STOL capability and flexibility of the well-selling C-130 while offering about twice its capacity and significantly more speed and range. In a way, the A400M is Airbus Defence's A380. Designed to be the future of military transport but ended up way over budget, delayed and requiring lots of post-delivery fixes while the customers happily kept buying the cheaper, smaller C-130.
 
Sokes
Posts: 1249
Joined: Sat Mar 09, 2019 4:48 pm

Re: Airbus announces € 1.36 billion net loss

Tue Mar 10, 2020 10:58 am

@mxaxai:
O.k., I looked it up.
"And while Boeing's C17 can fly further and lift more, its jet engines need a full modern runway to take off and land; Grizzly can land on rough desert strips."
https://www.bbc.co.uk/news/business-10631213
Grizzly means A400M.
Apparently the plane can land on desert sand. I'm surprised. Walking on sand is funny, I wonder what forces the plane has to face during touchdown.

By just looking at it one can tell the engine was a research project. Of course I can't judge if this was a welcome side effect or a main criteria to design the plane.
Image
source: https://en.wikipedia.org/wiki/Airbus_A400M_Atlas#Design

The German Wikipedia says the planning were for 225 planes, but Italy and Portugal left the project, Germany and Turkey reduced the orders.
Orders now are 174 with 81 delivered.
Well, development is still ongoing. So let's see if it will really be a failure long term.

It looks like an offensive weapon. Why does Europe need such a plane?
Why can't the world be a little bit more autistic?
 
olle
Posts: 2026
Joined: Tue Feb 06, 2007 3:38 am

Re: Airbus announces € 1.36 billion net loss

Tue Mar 10, 2020 11:35 am

The bright side of Airbus military side is that all EU is increasing their military budgets right now. This creates for examle nice numbers from competition / partners like SAAB.
 
mxaxai
Posts: 1807
Joined: Sat Jun 18, 2016 7:29 am

Re: Airbus announces € 1.36 billion net loss

Tue Mar 10, 2020 11:46 am

Sokes wrote:
By just looking at it one can tell the engine was a research project. Of course I can't judge if this was a welcome side effect or a main criteria to design the plane.

The engine is the result of trying to get a takeoff distance < 1000 m while also achieving M .72 at FL400 with 36 tons payload. The speed basically requires a turbofan while the STOL and rough field capability very much prefer a turboprop. So you get a very large unducted fan, sort of. And the gearbox that is required for this has caused headaches to no end.
 
User avatar
william
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Re: Airbus announces € 1.36 billion net loss

Tue Mar 10, 2020 1:50 pm

https://leehamnews.com/2020/03/10/heard ... more-32831

Per Leeham, Airbus still having A321NEO production problems

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