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Phosphorus
Posts: 916
Joined: Tue May 16, 2017 11:38 am

Re: Airbus Financial Discussion 2020

Tue Mar 31, 2020 8:08 am

Vladex wrote:
Phosphorus wrote:
Vladex wrote:
Emirates is the 1. airline in the world and Singapore is the second one and they are guaranteed to prevail over this hysteria and groundings. All these other airlines that you talk about will be decimated and EK and SQ will pick up their traffic so they will need A380's if anything. Furthermore , I just don't see Airbus delivering 100 of A350's and 700 of A320's this year and next year, Tough talk is only impressive to weaklings.


Suppose if you are right, and it's that bad, that airlines worldwide drop like flies, while mighty EK and SQ soldier on.
What happens after travel starts to reopen? Do you really expect the world economy to rebound so fast, that the world runs out of available airframes quickly, higher-capacity airframes will be so sought after, that A380 is becoming a hot commodity and sells like hotcakes, with EK leading the charge?
If that is the case, owners of other A380 will be climbing over each other, trying to sell or lease their frames to EK at very attractive rates. All the Malaysian and Thai and Asiana's and probably even ANA's, Air France's and Etihad's would be available...


I don't know what you just wrote as it doesn't make sense now . EK and SQ are totally different not just in terms of brand and quality but in the ways to rebound from this than Norwegian, Air France or even Cathay. Dubai and Singapore are relatively less affected by this grounding then others as they are far away from Europe , China and USA .They won't be taking in A380's from others as it doesn't fit their fleet. There will be a lot of deferrals and cancellations this year for other planes (A320, A350). All these other airlines will be very slow to get up to speed however EK and SQ will be very quick as they didn't suffer much, they are city states so they have less politics to deal with and they are totally supported by their owners while passengers will be looking for reliability.


"Doesn't make sense"? All, right, let's simplify, then maybe you'll comprehend:
1) worldwide air travel business is in bad shape.
2) all airframes suddenly became less desirable and thus cheaper
3) VLA frames are particularly hard-hit, and there is an overhang/surplus of them
4) the current crisis will badly affect all major economies, as the system was overdue for correction; now the correction will be very painful
5) air travel will take a long time to rebound to previous levels
6) even if there are a couple of city-states that have pockets so deep, that they can coast through this crisis "no sweat", the rest of the world is less fortunate
7) connection model for city-state airlines relies on transfer pax
8) these transfer pax numbers are not expected to jump. Moreover, these transfer pax will continue to travel from varied points to varied destinations = fragmentation stays

As a result, it doesn't make sense for Airbus to spend money to restart a VLA line into this crisis, just over a hunch that EK and SQ will order more A380.

Fortunately, you do not need to take my word for it. We have reliable indicators -- whether your "theory" is right or not:
1) factory-fresh A380 that are completed (or being completed) for EK. If EK rushes to pick them up and press them into service is one indicator
2) utilisation of A380 frames already on property at EK and SQ. If they are all flying and very busy -- another indicator
3) second-hand market. You might say that others' second hand frames don't "fit their fleet". But A380 are now cheap, reconfiguration costs are known, and if there's a need -- there's a way. So if A380's get picked up and pressed into service -- that's yet another indicator

I'm afraid you do not see that we are heading for a bit of a "reset" and things will be somewhat different, when we come out of this crisis. But we'll see. Again, you do not need to believe; proof is on its way, one way or the other.
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User avatar
Polot
Posts: 10343
Joined: Thu Jul 28, 2011 3:01 pm

Re: Airbus Financial Discussion 2020

Tue Mar 31, 2020 10:19 am

Vladex wrote:
Phosphorus wrote:
Vladex wrote:
Emirates is the 1. airline in the world and Singapore is the second one and they are guaranteed to prevail over this hysteria and groundings. All these other airlines that you talk about will be decimated and EK and SQ will pick up their traffic so they will need A380's if anything. Furthermore , I just don't see Airbus delivering 100 of A350's and 700 of A320's this year and next year, Tough talk is only impressive to weaklings.


Suppose if you are right, and it's that bad, that airlines worldwide drop like flies, while mighty EK and SQ soldier on.
What happens after travel starts to reopen? Do you really expect the world economy to rebound so fast, that the world runs out of available airframes quickly, higher-capacity airframes will be so sought after, that A380 is becoming a hot commodity and sells like hotcakes, with EK leading the charge?
If that is the case, owners of other A380 will be climbing over each other, trying to sell or lease their frames to EK at very attractive rates. All the Malaysian and Thai and Asiana's and probably even ANA's, Air France's and Etihad's would be available...


I don't know what you just wrote as it doesn't make sense now . EK and SQ are totally different not just in terms of brand and quality but in the ways to rebound from this than Norwegian, Air France or even Cathay. Dubai and Singapore are relatively less affected by this grounding then others as they are far away from Europe , China and USA .They won't be taking in A380's from others as it doesn't fit their fleet. There will be a lot of deferrals and cancellations this year for other planes (A320, A350). All these other airlines will be very slow to get up to speed however EK and SQ will be very quick as they didn't suffer much, they are city states so they have less politics to deal with and they are totally supported by their owners while passengers will be looking for reliability.

EK and SQ may be further away from Europe and the US but they are heavily reliant on those passengers to fill their planes. They survive on connecting passengers (especially EK) not local passengers to sustain their size and their fleets.
 
LJ
Posts: 5211
Joined: Wed Nov 17, 1999 8:28 pm

Re: Airbus Financial Discussion 2020

Tue Mar 31, 2020 2:00 pm

Seems that Airbus can expect the first cancellation soon.....at least if Stelios is gettng his way.

https://www.forbes.com/sites/marisagarcia/2020/03/30/as-easyjet-grounds-fleet-founder-threatens-board-demanding-airbus-order-cancellation/

Vladex wrote:
Emirates is the 1. airline in the world and Singapore is the second one and they are guaranteed to prevail over this hysteria and groundings. All these other airlines that you talk about will be decimated and EK and SQ will pick up their traffic so they will need A380's if anything. Furthermore , I just don't see Airbus delivering 100 of A350's and 700 of A320's this year and next year, Tough talk is only impressive to weaklings.


EK gets a bail out and SQ has already received a multi billion bail out. I don't think they're going to invest in A380s
 
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scbriml
Posts: 18794
Joined: Wed Jul 02, 2003 10:37 pm

Re: Airbus Financial Discussion 2020

Tue Mar 31, 2020 2:41 pm

LJ wrote:
Seems that Airbus can expect the first cancellation soon.....at least if Stelios is gettng his way.

https://www.forbes.com/sites/marisagarcia/2020/03/30/as-easyjet-grounds-fleet-founder-threatens-board-demanding-airbus-order-cancellation/


Yes, Stelios is often telling the board what they should do. IIRC, the last time it was trying to stop them placing an order (which they still did), so he’s basically doubling down on that.

Despite the fact he owns just over 1/3 of easyJet, he needs others to side with him before he can force anything through. I’m sure the board will do what they think is best for easyJet.
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enzo011
Posts: 1839
Joined: Tue Jun 21, 2011 8:12 am

Re: Airbus Financial Discussion 2020

Tue Mar 31, 2020 5:17 pm

scbriml wrote:
LJ wrote:
Seems that Airbus can expect the first cancellation soon.....at least if Stelios is gettng his way.

https://www.forbes.com/sites/marisagarcia/2020/03/30/as-easyjet-grounds-fleet-founder-threatens-board-demanding-airbus-order-cancellation/


Yes, Stelios is often telling the board what they should do. IIRC, the last time it was trying to stop them placing an order (which they still did), so he’s basically doubling down on that.

Despite the fact he owns just over 1/3 of easyJet, he needs others to side with him before he can force anything through. I’m sure the board will do what they think is best for easyJet.



Seems every Easyjet order is accompanied by stories of Stelios raging at the board and demanding shareholder votes. His aim seems to be to protect his shareholding where the rest of the board and company is focused on growth.

This is in 2009,

EasyJet entrepreneur Stelios wins boardroom battle after chairman quits early

This is in 2011,

Stelios attacks easyJet's Airbus decision

And this in 2013 when the A320neo order was placed,

Airbus in advanced talks for $10 billion easyJet order: sources

Analysts believe easyJet’s chief executive Carolyn McCall has a good chance of winning approval for a deal from shareholders despite opposition from Stelios Haji-Ioannou, who founded the airline in 1995 and remains its largest shareholder with a 37 percent stake.

Stelios has said he believes buying new planes would destroy shareholder value and that the money would be better spent on improving returns to investors, through dividends or share buybacks.
 
Sokes
Posts: 1129
Joined: Sat Mar 09, 2019 4:48 pm

Re: Airbus Financial Discussion 2020

Thu Apr 02, 2020 2:38 pm

scbriml wrote:
LJ wrote:
Seems that Airbus can expect the first cancellation soon.....at least if Stelios is gettng his way.

https://www.forbes.com/sites/marisagarcia/2020/03/30/as-easyjet-grounds-fleet-founder-threatens-board-demanding-airbus-order-cancellation/


Yes, Stelios is often telling the board what they should do. IIRC, the last time it was trying to stop them placing an order (which they still did), so he’s basically doubling down on that.

Despite the fact he owns just over 1/3 of easyJet, he needs others to side with him before he can force anything through. I’m sure the board will do what they think is best for easyJet.


From the link:
"Haji-Ioannou, who received a £60 million ($74 million) dividend payment from the airline last week, is also reported to have expressed an interest in acquiring a greater share of the airline in his Sunday letter to the chairman. He has set a deadline for easyJet to act on the aircraft order cancellation by Wednesday of this week."
Business as usual. Extract wealth before begging for help. Privatize profits, socialize losses.

If he owns 37% I'm not surprised that he wants to decide. 30-40% is usually enough to dominate.
If you live in a city that has yearly shareholder meetings, buy some stock. You get an invitation. It's quite interesting to listen to what they have to say. In order for management to get it's way they usually offer good food at the time of voting. You own one million $ stock or fifty $ stock, the stomach size is the same. In the later case return on investment is fabulous.
Then in Germany there is a law that if those present don't vote no, they automatically vote yes. It's called subtraction principle. I believe Iran can still learn a lesson or two from Germany.

Easyjet must have paid some advance which would get lost in case of cancellation. Anybody knows more.
Why can't the world be a little bit more autistic?
 
gregpodpl
Posts: 76
Joined: Fri Jan 04, 2013 3:49 am

Re: Airbus Financial Discussion 2020

Sat Apr 04, 2020 2:11 pm

Confirmation of cuts:
"European planemaker Airbus is looking to slash the production rates of its A320 family of narrowbody aircraft. The A320, currently produced at a rate of 60 planes per month, could see production cut by as much as 50%, with no ramp-up expected until at least the end of the year, and possibly much later."

https://www.ft.com/content/65e5c651-11f ... 9fb58be919
https://simpleflying.com/airbus-a320-production-rate/
 
LJ
Posts: 5211
Joined: Wed Nov 17, 1999 8:28 pm

Re: Airbus Financial Discussion 2020

Sat Apr 04, 2020 2:31 pm

gregpodpl wrote:
Confirmation of cuts:
"European planemaker Airbus is looking to slash the production rates of its A320 family of narrowbody aircraft. The A320, currently produced at a rate of 60 planes per month, could see production cut by as much as 50%, with no ramp-up expected until at least the end of the year, and possibly much later."

https://www.ft.com/content/65e5c651-11f ... 9fb58be919
https://simpleflying.com/airbus-a320-production-rate/


Though I agree that there is a very high probability that Airbus will slash production, I fail to see how the phrase "Airbus is looking to slash the production rates" is a confirmation that they're actually going to do it.

BTW we've a dedicated thread for this news.

https://www.airliners.net/forum/viewtopic.php?f=3&t=1444009

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