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brindabella
Posts: 620
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 1:57 pm

smartplane wrote:
lightsaber wrote:
JayinKitsap wrote:
Law prefers consistency, choosing to not enforce contract requirements for one does set precedent for another to sue to get out of that contract requirement, so it is much better to enforce the contract. If the current contract is unenforceable it is time to sit down to negotiate a contract change that is fair to both parties. Often in bankruptcies that same negotiation occurs, except in the US Chapter 7 case where the entity basically vanishes into vapor. The lender gets the plane back but no money, but if the OEM hasn't delivered it just gets the prior payments.

Often a solution if the airline is a going concern and has decent prospects, but no cash is for the OEM to arrange a financial lease, like what Boeing Capitol does, so the airline can accept delivery. But if the airline already has a desert full of planes not in service there are few good choices.

The OEM's have seemed to move the payment at signing to a payment applied when parts begin to be purchased. The first turbine casting needs to be paid for by then, but this date is probably 30 to 36 months before delivery. There are progress payments due at contract milestones, if a milestone is not paid for, the most agreeable answer is for the OEM to idle the order, letting others that have paid pass by, until paid and it enters the production plan. It is the value already put into the frame that is the real club by the OEM on the airline. Loosing the $20M already paid gets one's attention. Not getting sufficient early payments allows the airline to more easily walk away.

Look at the Air Bridge Cargo, V D recent situation. V D disappeared at the delivery date with no contact, then finally after meeting more than a month after finally said they cannot pay for the plane and cancelled the contract. (A similar less dire was happening with 3 77F's at the same time.) VD basically wrote off all the deposits and Boeing resold the plane for what it could get. Most NTU's are in a similar situation. Well VD is now having regrets and went to court to get Boeing to honor the contract VD broke. The judge denied any relief for VD.

What leverage the airlines have is lost if they cease being a blue chip customer.

I do wonder what deposits will be lost? There is a need to sit down. Airlines must not go bankrupt, if possible. Airbus (and Boeing) must preserve the supply chain.

I personally believe neither Airbus nor Boeing cut production enough. There will be far too many aircraft on the market. I expect many a vendor to have to declare CH11. Some will have to break contracts.

Lightsaber

A & B face a triple wammy.

One. Orders cancelled and / or deferred, milestone payments missed / deferred including delivery settlement.
Two. Demands from customers with firm orders to re-price.
Three. Customers with accrued retrospective credits opting to take as cash, even though that results in a discount / lower value.

Airbus legal action will be in response to the above, including court confirming OEM ability (included in T&C's) to freeze retrospective credits so customers cannot convert to cash and withdraw whether on cancelled / deferred deliveries or already delivered aircraft, allow application to due / overdue milestone payments, and reverse retrospectively, credits earned on already delivered aircraft, and the ability to withhold parts and services for the existing fleet.

A & B standard T&C's allow the above, but legally untested.

And it's not just the OEM's and customers between a rock and a hard place. Pre-shipment financiers will argue if an OEM agrees to defer delivery with a customer, they still want their finance repaid as if delivered on the originally agreed dates. But post-delivery finance is almost impossible to arrange. So the pre-shipment financier will want the OEM and / or customer, and / or post-shipment financier to take them out.

In normal times, that's exactly what would happen, with usually the OEM (air frame and engines) and post-shipment financiers coming to the party. But these are not normal times, and industry liquidity has already been stretched by MAX and some pre-COVID deferred deliveries.

So legal action is more than a threat. And for now Boeing will be happy for Airbus to take the lead. Airlines consider it's OK to withhold refunds from customers, but watch them go ballistic when they can't cash in their OEM credits.

Action by engine OEM's will be interesting, especially where the customer has negotiated direct with the OEM. For example, customers deemed delinquent, can have engine services withdrawn globally from approved service agents.

Some otherwise very reputable airlines might be about to find out what it's like to run an airline in Iran, however a lot of discussions to be had before that happens. But first rule of discussions, is talk to your suppliers / creditors.


Instructive also.

But, with respect, I think this is the biggie

Two. Demands from customers with firm orders to re-price.
:boggled:

I mentioned elsewhere that IMO BA have had a (totally) underserved "get out of jail" card.
BA have stopped the MAX lines some time ago.
And taken the hit.
:yes:

Last I saw AB have reduced the A320neo lines by 1/3 - which I suspect will be far too little.

cheers
Billy
 
airhansa
Posts: 380
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 2:03 pm

889091 wrote:
Damned if you do, damned if you don't. I don't envy his role.

Push too hard and the airline(s) may just go belly up - liquidators are called in and presto, a whole bunch of cheap second-hand frames suddenly become available, eating into your order books. Too soft, and your cash flow starts to trickle.

The EU is planning to open its borders on 15 June 2020. All we need is a similar situation that happened to QR in Greece a few days ago and we'll be back to square one.


The EU isn't planning to open its borders on the 15th June 2020, but hopes that they will start to open by the end of June. However a handful of countries are opening up their domestic borders to neighboring countries, such as Germany and Austria.
 
Breathe
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 3:55 pm

It wouldn't surprise me if Airbus and Boeing are talking to each other behind closed doors, as essential they are duopoly when it comes to passenger aircraft in the models the manufacture. So it would be in both their interests to make sure airlines didn't go to far "out of line" for their liking regarding payments, deferrals, cancellations etc.
 
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DocLightning
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 5:09 pm

Ishrion wrote:
Didn’t Qatar Airways say it would stop buying from Airbus/Boeing if they didn’t accept deferrals?


I am sure that Lockheed is chomping at the bit to sell them L-1011s. :biggrin:
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
jbs2886
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 5:53 pm

Breathe wrote:
It wouldn't surprise me if Airbus and Boeing are talking to each other behind closed doors, as essential they are duopoly when it comes to passenger aircraft in the models the manufacture. So it would be in both their interests to make sure airlines didn't go to far "out of line" for their liking regarding payments, deferrals, cancellations etc.


That would be illegal under antitrust laws. Companies are incredibly cautious when it comes to antitrust.
 
jetwet1
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 8:07 pm

eurotrader85 wrote:

How are they in a position to tell Airbus, or Boeing for that matter, that they will never buy an aircraft from them again? People here are trying to make this out like it is a typical supplier with a customer(s) that are struggling and where they need each other in equal amounts.


Easy, you pick up a phone and tell the salesman they will not buy another plane from him/her unless you can reach an agreement on the current deliveries, state owned companies have nobody to answer to except the head of state.

Will it stick, of course not, 5 years down the road there will be a phone call saying "we are interested, but it needs to be a killer deal"...Sales is sales, the past is the past. Is any manufacture going to block a state owned airline, I would think not, there may be larger upfront payments required, who knows.

Airbus and Boeing will go above and beyond to help larger carriers, it's in everyone's long term interest that all parties come out of this in a position to continue to operate and be successful. This is happening in most industries that are being hit hard by the current situation.
 
Jomar777
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 8:27 pm

VV wrote:
Ishrion wrote:
Didn’t Qatar Airways say it would stop buying from Airbus/Boeing if they didn’t accept deferrals?


And then buy from Mitsubishi instead? LOL.


More likely is that, if Qatar Airways needs to take such an action, it would choose one and bear with the other. Since it is Airbus screaming foul, should QR be affected, you could see B737s flying for them someday...

On a more direct note, I think Airbus will see themselves becoming very unpopular soon if they go ahead with this given that Boeing (because of their own issues) would most certainly not do the same and subsequently relish these potential new orders...
 
brilondon
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 9:34 pm

iamlucky13 wrote:
Varsity1 wrote:
cschleic wrote:

Then that leaves who as a supplier?


The used market.

It would be worse for Airbus and Boeing if airlines like QR started unloading their fleets onto the used market. Values would fall like a brick.


How would that benefit Qatar? It doesn't resolve the contract problem and it doesn't win the case for them in court. Should they then rebuy when travel picks up again? Sell low, buy high?

A compromise has to happen. The rumored airlines refusing to take calls from people they owe money to aren't making their position any better.

S0Y wrote:
I think it will all get resolved without the nuclear option of court.....but A and B are going to have to cut production rates by a lot more than we have seen to date before this gets fixed. Its just a matter of time.


They'll probably do a mix of cutting rates and building up an inventory of airplanes that are deferred for delivery. If the hopes that the industry is back to 2019 levels in 2 years come true, then backlogs will be growing again, but the manufacturers will still need time to ramp up.

Boeing's current ramp up plan for the MAX recovery reportedly does not have them reaching their 2018 production rate again until the end of 2022. At that point, the industry will be getting close 1000 in service 737's shy of where the pre-grounding forecast put it.


The industry will not see the levels of 2019 for the First thing is that you need is to not have a two week quarantine for every country. You also need to have more demand for your flights. Because of the closed international borders the demand is just not happening. I definitely don't see travel returning to the way it was. Covid-19 isn't going anywhere. A vaccine is still years away. Travelling will not be returning to the levels we saw in 2019 ever as employers are seeing a different ways of working remotely. Most businesses are adjusting to more remote working. The computer has changed to a tablet for the most part. Our phones are bluetooth. The way business is adapting, you don't need to travel like we use to. The times they are a changing, are your businesses adapting to the new world?
Rush forever Closer To My Heart
 
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spinotter
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Re: Airbus threatens to sue airlines

Sat Jun 06, 2020 10:42 pm

Waterbomber2 wrote:
lightsaber wrote:
889091 wrote:

I'm no lawyer, but I wonder if Airbus' legal dept had anything to do with it? It could very well be that Covid-19 or not, they didn't want to set a legal precedent for not asking the airlines to cough up the dough. Otherwise, it may be difficult to enforce it in future, post Covid-19.

I believe you are correct in that Airbus is setting legal precident.

Neither Airbus nor Boeing can ramp down to zero. If they tried, half the vendor supply chain would go bankrupt and then no manufacturing of aircraft. This is true of the engine vendors as all need specialty casting vendors who need enough product to stay in business.

So Airbus must discuss differals but still deliver dome aircraft to fund continued production.

The issue is the airlines cannot accept a fraction of the orders, yet. It was noted by Revalation that low deposits enabled mega orders.

The reality is any airline that fully honors previously agreed pricing is at a disadvantage. There is no avoiding a step down in aircraft pricing, new or used, for the next 5 years. Fully honoring the contract will bankrupt most airlines.

The airlines that recently bought fleets and cannot return the aircraft to leasors or have large previously negotiated orders are going to be at a competitive disadvantage.

Buy popcorn in bulk. This is still the opening act.

Lightsaber


Airbus already set a legal precedent in Japan with Skymark.
What they did with Skymark is nothing short of disgusting.

The problem is that Airbus itself have learned nothing from the Skymark bankruptcy.
They have not solved the core problem of financing, ie what do we do when a large customer has liquidity problems, or worse even, what do we do when all customers have a liquidity problem.
Airbus should have partnered with one or several large banks that would provide back-up financing and would be backed by state guarantees in scenario's like these.
Something like: the aircraft stay with Airbus as collateral, the bank provides deferred leasing guaranteed by the state in case the customer airline fails, the bank and state get the aircraft if the airline goes bankrupt before the aircraft is delivered.

I also think that the Airbus production strategy has been very wrong so far.
When you have backlog of 8-9 years of production and a weak competing product you can't reduce the production rate. That is foolish.
You produce at full rate and deliver it when the airlines can take delivery. Aircraft cost relatively little to produce compared to their sales price, it's the development cost that makes them cost what they cost.

We haven't even started to see the consequences of this crisis.
Most airlines wil be bankrupt by the end of this year, and who knows what will happen to Airbus.

Over in the Lufthansa bailout thread everyone was talking about it like LH is the holy grail and should be saved at all cost.
In a few months, when big industries like Airbus, Siemens, Thyssenkrupp start failing, we'll see how much of a holy grail LH is.
We haven't even started to scratch the surface of this crisis.


You have a pessimistic prognostic, and you may well be proved right. But the USA and the EU are opening up, and passenger numbers as well. I believe that in the last week we Americans have decided, enough lockdown already. And I think air travel will be quick to resume, if not its pre-Covid-19 levels, at least in the range 60% to 80% of those levels. The major airlines worldwide, aided in some cases by government assistance, will not fail. Do we know current air passenger numbers for China compared to before? Domestic, international? They are three or four months ahead of us in coming out of the pandemic, aren't they?
 
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airportugal310
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 1:13 am

brilondon wrote:
iamlucky13 wrote:
Varsity1 wrote:

The used market.

It would be worse for Airbus and Boeing if airlines like QR started unloading their fleets onto the used market. Values would fall like a brick.


How would that benefit Qatar? It doesn't resolve the contract problem and it doesn't win the case for them in court. Should they then rebuy when travel picks up again? Sell low, buy high?

A compromise has to happen. The rumored airlines refusing to take calls from people they owe money to aren't making their position any better.

S0Y wrote:
I think it will all get resolved without the nuclear option of court.....but A and B are going to have to cut production rates by a lot more than we have seen to date before this gets fixed. Its just a matter of time.


They'll probably do a mix of cutting rates and building up an inventory of airplanes that are deferred for delivery. If the hopes that the industry is back to 2019 levels in 2 years come true, then backlogs will be growing again, but the manufacturers will still need time to ramp up.

Boeing's current ramp up plan for the MAX recovery reportedly does not have them reaching their 2018 production rate again until the end of 2022. At that point, the industry will be getting close 1000 in service 737's shy of where the pre-grounding forecast put it.


The industry will not see the levels of 2019 for the First thing is that you need is to not have a two week quarantine for every country. You also need to have more demand for your flights. Because of the closed international borders the demand is just not happening. I definitely don't see travel returning to the way it was. Covid-19 isn't going anywhere. A vaccine is still years away. Travelling will not be returning to the levels we saw in 2019 ever as employers are seeing a different ways of working remotely. Most businesses are adjusting to more remote working. The computer has changed to a tablet for the most part. Our phones are bluetooth. The way business is adapting, you don't need to travel like we use to. The times they are a changing, are your businesses adapting to the new world?


Thank you for solving it all for us. Please call up each Head of State and let them know what they apparently don’t :roll:
“They bought their tickets, they knew what they were getting into. I say, let 'em crash.”
 
9Patch
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 1:28 am

spinotter wrote:
You have a pessimistic prognostic, and you may well be proved right. But the USA and the EU are opening up, and passenger numbers as well. I believe that in the last week we Americans have decided, enough lockdown already.


The USA is opening up, but for how long?

The United States reported 21,614 new infections on Thursday, and while that number is below its April peak, the daily average has been rising slightly in recent days as the continued improvement in Northeast is offset by new outbreaks in the South and parts of the West.


More states have seen an increase in new virus cases over the past two weeks than have seen a decline, according to a New York Times database:

The death toll in Arizona passed 1,000 this week.


Texas, one of the earliest states to move forward with reopening, reported 1,784 new cases on Thursday, one of its highest tallies yet.

https://www.nytimes.com/2020/06/05/worl ... dates.html
 
eurotrader85
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 3:08 am

jetwet1 wrote:
eurotrader85 wrote:

How are they in a position to tell Airbus, or Boeing for that matter, that they will never buy an aircraft from them again? People here are trying to make this out like it is a typical supplier with a customer(s) that are struggling and where they need each other in equal amounts.


Easy, you pick up a phone and tell the salesman they will not buy another plane from him/her unless you can reach an agreement on the current deliveries, state owned companies have nobody to answer to except the head of state.

Will it stick, of course not, 5 years down the road there will be a phone call saying "we are interested, but it needs to be a killer deal"...Sales is sales, the past is the past. Is any manufacture going to block a state owned airline, I would think not, there may be larger upfront payments required, who knows.

Airbus and Boeing will go above and beyond to help larger carriers, it's in everyone's long term interest that all parties come out of this in a position to continue to operate and be successful. This is happening in most industries that are being hit hard by the current situation.


The fact you say "Will it stick, of course not" highlights that they are in no position to make such a threat. If this was a normal industry where there were lots of suppliers competing, A & B might be worried and have to bend over backwards as far as they can in order to keep the customer. This isn't and they don't have to pull out the stops as far. The customers, as you say, will come back, because there is no one else to go to, and that is why A, and B for that matter, are in a stronger position to flex muscles and frankly ignore nonsense comments made from AAB et al.

Don't get me wrong, they will help as far as they can, and for sure some more prestigious legacy customers will probably be helped more than others. Normal commercial life. But even then A and B will rightly have their limits, so lets not pretend that the person from one of the many numerous airlines picking up the phone to the sales team at A or B has anywhere near the threat, or strength of position behind it, than a company in an monopolistic position is.
 
eurotrader85
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 3:16 am

spinotter wrote:
Waterbomber2 wrote:
lightsaber wrote:
I believe you are correct in that Airbus is setting legal precident.

Neither Airbus nor Boeing can ramp down to zero. If they tried, half the vendor supply chain would go bankrupt and then no manufacturing of aircraft. This is true of the engine vendors as all need specialty casting vendors who need enough product to stay in business.

So Airbus must discuss differals but still deliver dome aircraft to fund continued production.

The issue is the airlines cannot accept a fraction of the orders, yet. It was noted by Revalation that low deposits enabled mega orders.

The reality is any airline that fully honors previously agreed pricing is at a disadvantage. There is no avoiding a step down in aircraft pricing, new or used, for the next 5 years. Fully honoring the contract will bankrupt most airlines.

The airlines that recently bought fleets and cannot return the aircraft to leasors or have large previously negotiated orders are going to be at a competitive disadvantage.

Buy popcorn in bulk. This is still the opening act.

Lightsaber


Airbus already set a legal precedent in Japan with Skymark.
What they did with Skymark is nothing short of disgusting.

The problem is that Airbus itself have learned nothing from the Skymark bankruptcy.
They have not solved the core problem of financing, ie what do we do when a large customer has liquidity problems, or worse even, what do we do when all customers have a liquidity problem.
Airbus should have partnered with one or several large banks that would provide back-up financing and would be backed by state guarantees in scenario's like these.
Something like: the aircraft stay with Airbus as collateral, the bank provides deferred leasing guaranteed by the state in case the customer airline fails, the bank and state get the aircraft if the airline goes bankrupt before the aircraft is delivered.

I also think that the Airbus production strategy has been very wrong so far.
When you have backlog of 8-9 years of production and a weak competing product you can't reduce the production rate. That is foolish.
You produce at full rate and deliver it when the airlines can take delivery. Aircraft cost relatively little to produce compared to their sales price, it's the development cost that makes them cost what they cost.

We haven't even started to see the consequences of this crisis.
Most airlines wil be bankrupt by the end of this year, and who knows what will happen to Airbus.

Over in the Lufthansa bailout thread everyone was talking about it like LH is the holy grail and should be saved at all cost.
In a few months, when big industries like Airbus, Siemens, Thyssenkrupp start failing, we'll see how much of a holy grail LH is.
We haven't even started to scratch the surface of this crisis.


You have a pessimistic prognostic, and you may well be proved right. But the USA and the EU are opening up, and passenger numbers as well. I believe that in the last week we Americans have decided, enough lockdown already. And I think air travel will be quick to resume, if not its pre-Covid-19 levels, at least in the range 60% to 80% of those levels. The major airlines worldwide, aided in some cases by government assistance, will not fail. Do we know current air passenger numbers for China compared to before? Domestic, international? They are three or four months ahead of us in coming out of the pandemic, aren't they?


International is still a trickle with all the travel bans but I've read on major trunk domestic routes it is up to 60% of where it was before.
 
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Revelation
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 4:36 pm

spinotter wrote:
You have a pessimistic prognostic, and you may well be proved right. But the USA and the EU are opening up, and passenger numbers as well. I believe that in the last week we Americans have decided, enough lockdown already. And I think air travel will be quick to resume, if not its pre-Covid-19 levels, at least in the range 60% to 80% of those levels. The major airlines worldwide, aided in some cases by government assistance, will not fail. Do we know current air passenger numbers for China compared to before? Domestic, international? They are three or four months ahead of us in coming out of the pandemic, aren't they?

As I'm sure you know, the virus doesn't care about human impatience.

As for some data, I found the following US TSA passenger data:

Image
Ref: https://twitter.com/firstadopter/status ... 2581897216

I guess it's up to each of us if we decide to mentally continue the graph by drawing a straight line, or an exponential growth curve, or a sawtooth wave with peak followed by trough due to increased traffic leading to increased infection leading to decreased traffic and so on.

https://twitter.com/IATA/status/1269222517727584261 has some data closer to the kind you were looking for, but IMO is misleading because it is using FR24 data counting the number of flights and not the number of passengers.
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Wake now, discover that you are the song that the morning brings
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spinotter
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 4:56 pm

Thanks for that graph. I had thought that domestic traffic in the USA was now higher than what the graph shows, so you are right, the future 7 day averages may continue their slow climb or move up more rapidly. If we see BIG new hotspots in the US, all bets are off. Still, to me it feels as if the ice is breaking up.
 
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 5:07 pm

spinotter wrote:
Thanks for that graph. I had thought that domestic traffic in the USA was now higher than what the graph shows, so you are right, the future 7 day averages may continue their slow climb or move up more rapidly. If we see BIG new hotspots in the US, all bets are off. Still, to me it feels as if the ice is breaking up.

Thank you for your comments. I feel that we have definitely bottomed out, but am having a hard time projecting an "ice out" event any time soon. A very large percentage of this (northern) summer's vacation trips have been canceled and it's hard to project them being restored this year especially given anxiety over the economy. Business is down across the board and the expectation is still that business travel should be avoided whenever possible. International political decisions aren't helping. I do sense some people feel a need to travel for family reasons but in general that too is being postponed till we have a better handle on whether or not the virus will erupt again. Personally I know of two covid deaths in my community in the last day. It surely hasn't been eradicated.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
multimark
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 5:35 pm

Ishrion wrote:
Didn’t Qatar Airways say it would stop buying from Airbus/Boeing if they didn’t accept deferrals?


I look forward to sampling Qatar's new long haul product comprised solely of Sukhoi SuperJets! :lol:
 
sabby
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Re: Airbus threatens to sue airlines

Sun Jun 07, 2020 6:29 pm

multimark wrote:
Ishrion wrote:
Didn’t Qatar Airways say it would stop buying from Airbus/Boeing if they didn’t accept deferrals?


I look forward to sampling Qatar's new long haul product comprised solely of Sukhoi SuperJets! :lol:

Don't forget Comac ;)
 
Bricktop
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Re: Airbus threatens to sue airlines

Mon Jun 08, 2020 12:40 am

brindabella wrote:
:D :D :D

Of course!

it is the classic "pas de deux".

Sales has a really hot one on the line, if only the CFO would relax the deposit rules just a "teensy bit".
The CFO won't budge.
Sales goes to the CEO, who (unusually) supports the CFO.
So now Sales lobby the Board about how the CEO and CFO are totally out-of-touch with the realities of the market place.
And how a better (more "in touch") CEO and CFO would allow Sales to make a fortune for everybody (especially the Board members, one way or another).

Eventually, of course Sales wins, and crappy Contracts are signed to stupendous bally-hoo.

And, of course, when the cold winds blow, the much more strongly-restrictive Contracts are worth zip because the Customer is not gonna pay and the (tiny) deposit puts all the firepower in the defaulting buyer's hand.

Sales? :razz:

Long since retired to the Bahamas with more money than they will ever spend!

"There is nothing new under the sun!".

:D :D :D

cheers

100% this. JL's bonus checks cleared a long time ago. :-) In a previous life, the sales weasels were always trying to go behind my back when I rejected their deals on credit or margin grounds. "But this will lead to a ton more business!", "This is getting our foot in the door!". Fortunately, my boss always backed me up. After all, they weren't paying me to be a rubber stamp: My dog could have done that job.

Breathe wrote:
It wouldn't surprise me if Airbus and Boeing are talking to each other behind closed doors, as essential they are duopoly when it comes to passenger aircraft in the models the manufacture. So it would be in both their interests to make sure airlines didn't go to far "out of line" for their liking regarding payments, deferrals, cancellations etc.

Damn straight they are, if not actively colluding which some might frown upon. I always used to say "A customer who doesn't pay his bills is not a customer." We were in a low margin business, so credit risk was a BiG ******* DEAL. While we weren't fortunate enough to be in a duopoly, all my competitors knew each others business, and we knew which customers were trying to play us.
 
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InsideMan
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Re: Airbus threatens to sue airlines

Mon Jun 08, 2020 12:49 pm

jbs2886 wrote:
While this discussion focuses on Airbus’ choice to make the demands (as an in-house lawyer, legal doesn’t just issue demands without business sign off), I think it would be interesting to consider which airlines.

Earlier I looked at A330 and A350 production and the only real airline that would probably be at issue is Hainan (and related airlines). Airbus mentioned a few dozen letters (?) so anyone have ideas which airlines?


I wouldn't be surprised.... HNA always try to be "creative" with their payments...

Since someone asked, governing law in almost all purchase agreements in the law of England.
 
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Re: Airbus threatens to sue airlines

Mon Jun 08, 2020 1:09 pm

9Patch wrote:
brindabella wrote:
And, of course, when the cold winds blow, the much more strongly-restrictive Contracts are worth zip because the Customer is not gonna pay and the (tiny) deposit puts all the firepower in the defaulting buyer's hand.

Can Airbus get their bribe money back? :duck:

While you meant this in jest, for any customer looking to get out of contracts, they will ensure an investigation ocvurs, in particular, with government owned/influenced or supported airlines.

The relationship just became far more complicated. The lack of substantive deposits puts power other than the airframer. You cannot push a rope.

Unfortunately, this will unplay quickly. This is a modified prisoner's delima where if more airlines default, there is less risk for the airlines.

Lightsaber
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VSMUT
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Re: Airbus threatens to sue airlines

Mon Jun 08, 2020 1:26 pm

Jomar777 wrote:
On a more direct note, I think Airbus will see themselves becoming very unpopular soon if they go ahead with this given that Boeing (because of their own issues) would most certainly not do the same and subsequently relish these potential new orders...


You are naive if you don't think Boeing isn't pursuing the same actions as Airbus. A and B exist to make profits, not to "sweet deal" thousands of aircraft into the fleets of the world airlines without making money.

If anything, Boeing has been "spared" because they couldn't deliver their best selling product for over a year. That doesn't put Boeing in a better position, customers are still going to be pissed, just for a different reason.
 
iamlucky13
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Re: Airbus threatens to sue airlines

Mon Jun 08, 2020 11:27 pm

9Patch wrote:
spinotter wrote:
You have a pessimistic prognostic, and you may well be proved right. But the USA and the EU are opening up, and passenger numbers as well. I believe that in the last week we Americans have decided, enough lockdown already.


The USA is opening up, but for how long?

The United States reported 21,614 new infections on Thursday, and while that number is below its April peak, the daily average has been rising slightly in recent days as the continued improvement in Northeast is offset by new outbreaks in the South and parts of the West.


The death rate has been continuing it's slow decline, and is likely to be a better indicator of the progression of the pandemic than the new case rate. There a good argument to be made that the severity of the pandemic is better measured by the death rate than the case rate, in particular because of we don't know how many cases are not being diagnosed, and the percentage has almost certainly changed as testing ramps up..

Of course, it is a real risk that we might see the trend reverse and have to increase our restrictions again. In that case, we could see the last 3 months repeat itself, and this fall we might be back where we are now, but 3 months or so wiser about what it takes to keep the basic reproduction rate below 1.

Spinotter's post traces back to one of my earlier comments where I suggested, based on the IATA forecast, itself based on what health and public officials are saying about the expected course of the pandemic, that by the end of 2022, the passengers volumes might be back where they were in 2019. If we have a 3 month setback to a 3 year timeline, one which is already being treated with a great deal of uncertainty, that is unfortunate, but not something that messes up the currently cautious planning.

The poster spinotter responded to seemed to assert that a 3 year recovery was wildly optimistic, for multiple reasons. Despite the fact that multiple vaccine candidates have had promising initial test results that could cut a few months off the common estimate that a vaccine would likely take about 18 months to develop (starting roughly this February), he contended a vaccine is years away. While that can't be ruled out, I'm not aware of any concrete signs that the 18 month time frame is no longer credible.

He also indicated that businesses have discovered a different way of doing business, which on the balance is false. Businesses have adapted to remote work as a lower impact to productivity than simply not working. That's far different from embracing it as a revolution. Most big businesses, my employer included, already were penny-pinching accounting machines that, with limited exceptions, only allowed business travel when it is necessary. Virtual meetings have been the norm for years, and travel the exception. There may be some decreased credibility on the part of managers whether some functions require travel, but overall, there is still a lot that is easier to do onsite, and quite a bit that simply can not be done without being onsite. I'm speaking in part from personal experience on this.
 
Bricktop
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Re: Airbus threatens to sue airlines

Mon Jun 08, 2020 11:39 pm

VSMUT wrote:
Jomar777 wrote:
On a more direct note, I think Airbus will see themselves becoming very unpopular soon if they go ahead with this given that Boeing (because of their own issues) would most certainly not do the same and subsequently relish these potential new orders...


You are naive if you don't think Boeing isn't pursuing the same actions as Airbus. A and B exist to make profits, not to "sweet deal" thousands of aircraft into the fleets of the world airlines without making money.

If anything, Boeing has been "spared" because they couldn't deliver their best selling product for over a year. That doesn't put Boeing in a better position, customers are still going to be pissed, just for a different reason.

Correct. This is a duopoly which can't be stressed enough. They both know all the airlines intimately. There are no secrets. Yes, you can play one against the other when you are a good customer with excellent financing, but otherwise not so much. "Oh, you screwed Airbus on that deal where you busted both our [email protected]? Yeah, sure I will give you a sweet deal." I don't think so.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 8:34 am

VSMUT wrote:
Jomar777 wrote:
On a more direct note, I think Airbus will see themselves becoming very unpopular soon if they go ahead with this given that Boeing (because of their own issues) would most certainly not do the same and subsequently relish these potential new orders...


You are naive if you don't think Boeing isn't pursuing the same actions as Airbus. A and B exist to make profits, not to "sweet deal" thousands of aircraft into the fleets of the world airlines without making money.

If anything, Boeing has been "spared" because they couldn't deliver their best selling product for over a year. That doesn't put Boeing in a better position, customers are still going to be pissed, just for a different reason.


As I said, I was clearly stating on the PUBLIC perception. Boeing is certainly pulling strings around - every single company in the world is - but you have not seen anything in the media, has you? Denotes the kind of desperation one is exposed to.

It is basic to tell that both A en B are there to make money (every single entity in the world is there for this one way or another - even charity ones...). As for your "sweet deal on thousands of aircraft", you might be naive to believe that this are not part of the game. Maybe Airbus has made more sweet deals than Boeing to the extent to go public on their actions and/or intentions.

For example, I wonder what would it happen if Stelios has his way at Easyjet and they decide to pull the plug on their Airbus order...
 
StTim
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 8:54 am

This is a public statement from Airbus that they are not going to be patsies and just roll over when the airlines want reduced prices/deferrals.

Now this is out in the open the sales people who get those calls will be able to be firmer.

This will also without doubt be happening in Seattle/Chicago as well.

It is not in A and B's interest for many airlines to go bankrupt. Likewise they need to ensure they and their supply chains survive.
 
VSMUT
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 11:08 am

jeffrey0032j wrote:
Airbus has more in its hands in weak and ailing airlines, most of the airlines that folded in 2019 before this coronavirus crisis had majority or even full Airbus fleets. Only Jet Airways had a majority Boeing fleet. And Airbus had resorted to quite widespread (ie global) bribes to get its orders.


I've seen this myth several times before, and it never really holds water. Remember Arik Air? Green Africa Airways? They gave an operating loan to Monarch in return for a MAX order. The Eastern Airlines restart? Primera and Norwegian? Virgin Australia? Air Italy? Spicejet has been on the verge of going bust several times. They both have and have had weak customers.

Sure, we could look at 2019 specifically, but then I would point out that most of the airlines that went bust that year didn't have any outstanding Airbus orders. It isn't "Airbus having it's hands on weak and ailing airlines" if the planes were sold 15 years prior when the airline wasn't weak and ailing, nor if the aircraft were acquired second-hand.
I think Thomas Cook (UK) had a few outstanding, WOW air (even if they had been cancelled prior I'd count them) and Germania. Less than 50 orders total, versus the over 140 Boeing lost for Jet Airways.

And serious as it is, let's not delude ourselves into thinking that bribes are an unknown concept to American aerospace corporations, or a sign that the customer is on the verge of bankruptcy.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 11:42 am

iamlucky13 wrote:
He also indicated that businesses have discovered a different way of doing business, which on the balance is false. Businesses have adapted to remote work as a lower impact to productivity than simply not working. That's far different from embracing it as a revolution. Most big businesses, my employer included, already were penny-pinching accounting machines that, with limited exceptions, only allowed business travel when it is necessary. Virtual meetings have been the norm for years, and travel the exception. There may be some decreased credibility on the part of managers whether some functions require travel, but overall, there is still a lot that is easier to do onsite, and quite a bit that simply can not be done without being onsite. I'm speaking in part from personal experience on this.


We're going a bit off-topic here, but businesses will be happy to accept 10% reductions in productivity from work-at-home situations, long term. They get to avoid providing office space, which in major U.S. cities has been estimated at ~30% of wages. The business press - New York Times, Wall Street Journal, The Globe and Mail - is full of stories of firms looking for major reductions to their office footprints. Give up 10% to save 30%? DONE!

Narrow-minded execs and accountants couldn't imagine work-from-home. COVID forced a trial and they see that business gets done. Even elements of the U.S. military have embraced corporate video conference tools, and it's hard to find an organization more conservative and resistant to change than the military.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 12:25 pm

jeffrey0032j wrote:
The case regarding VDA's Boeing order is the exact opposite of Airbus threatening to sue their customers as it was the airline who sued Boeing, VDA tried to get away with its mistake by suing and making what could be a quiet affair public, and still lost it in the end.


No, it isn´t rreally. It was a client first reusing to take delivery and all of a sudden changing its minds and crying foul the moment Boeing held the to their contractual communication aka "we no longer are able to pay and don´t want the plane" as an alternative was down the line already. Boeing gave the very same signal Airbus is giving, and that apparently public as well: a signed contract stipulated rights for both ends, and either you adhere to them or not. If not: face the consequences.

Both manufacturers have made it pretty clear, one with a specific airline, the other more generic, that they will hold firm to their contracts. Which is absolutely fine.

Contracts can be changed, but you need to talk to each other to find solutions. Otherwise it´s going to end up in court, no matter what.
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 1:49 pm

StTim wrote:
This is a public statement from Airbus that they are not going to be patsies and just roll over when the airlines want reduced prices/deferrals.

Now this is out in the open the sales people who get those calls will be able to be firmer.

This will also without doubt be happening in Seattle/Chicago as well.

It is not in A and B's interest for many airlines to go bankrupt. Likewise they need to ensure they and their supply chains survive.

I'm not sure Airbus was being viewed as patsies.

The problem for them is they in effect portrayed their customers as deadbeats which is typically not a good move.

I'm sure Boeing is doing similar things but in quiet, and if they do go public it would be a mistake, IMO.

The VDA case is different in perception because it is highlighting that two parties want the Boeing product as opposed to none.
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Gremlinzzzz
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 2:07 pm

There are very many ways of communicating a message if partners are not willing to talk. This message from Airbus is not meant for public participation as some may think, but it is a call to airlines that are not picking up the phone that there are different ways of accomplishing business if there are hardships. There is a reason why they have not gone the distance when it comes to revealing who the airlines are.

You will see the same happen in all walks of life.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 4:03 pm

Revelation wrote:
I understand there is a need for posturing, but it seems there should be a better way to work through the current crisis.


I disagree.

Contract is contract. Customers have to take their planes.
Good moaning!
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 4:48 pm

PepeTheFrog wrote:
Revelation wrote:
I understand there is a need for posturing, but it seems there should be a better way to work through the current crisis.


I disagree.

Contract is contract. Customers have to take their planes.

Sure, force them to take those planes and see a number of them fold while they pay their last cents to you. These are extraordinary times and a mentality where things should be as per normal and as rigid as contracts will do more harm to the customer relationship in the long run than good. Doing it quietly and being more flexible in terms accepting cancellations or deferrals will be more helpful to your customers. It is ironic that Boeing, which was seen as greedy before and during the Max crisis is now sending out friendlier signal to customers (at least publicly) and a more realistic outlook for investors while Airbus is trying to do the opposite by damaging customer relationships in a public way and being seen as less willing to accept the current realities.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:11 pm

jeffrey0032j wrote:
Sure, force them to take those planes and see a number of them fold while they pay their last cents to you.


They don't have to pay their last cents if they can get a loan.

But more importantly, most of the aircraft is already paid for when it is ready for delivery. Customers pay a large amount upfront. So if I was a customer, I would want to have my asset as quickly as possible.

These are extraordinary times and a mentality where things should be as per normal and as rigid as contracts will do more harm to the customer relationship in the long run than good. Doing it quietly and being more flexible in terms accepting cancellations or deferrals will be more helpful to your customers. It is ironic that Boeing, which was seen as greedy before and during the Max crisis is now sending out friendlier signal to customers (at least publicly) and a more realistic outlook for investors while Airbus is trying to do the opposite by damaging customer relationships in a public way and being seen as less willing to accept the current realities.


Ask Volga-Dnepr what they feel about the relationship with Boeing.
Good moaning!
 
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Polot
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:15 pm

PepeTheFrog wrote:
They don't have to pay their last cents if they can get a loan.

Have you seen the state of the industry recently?

PepeTheFrog wrote:
But more importantly, most of the aircraft is already paid for when it is ready for delivery. Customers pay a large amount upfront. So if I was a customer, I would want to have my asset as quickly as possible.


That is not true, a majority of the payment is due at time of delivery, not before. This is especially true in recent years with many of the big orders that airlines have been placing (with OEM encouragement) to boost OEM’s numbers in order race that have had very favorable (for the airline) predelivery payment terms (again, to encourage large orders).
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:23 pm

Polot wrote:
That is not true, a majority of the payment is due at time of delivery, not before. This is especially true in recent years with many of the big orders that airlines have been placing (with OEM encouragement) to boost OEM’s numbers in order race that have had very favorable (for the airline) predelivery payment terms (again, to encourage large orders).


I'm not talking about backlog aircraft. There are several assembly milestones the customer has to pay for. For example, A380 customers had to pay when the aircraft entered final assembly, and had to pay another amount when the aircraft got ferried to XFW for cabin installation.
Good moaning!
 
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Polot
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:25 pm

PepeTheFrog wrote:
Polot wrote:
That is not true, a majority of the payment is due at time of delivery, not before. This is especially true in recent years with many of the big orders that airlines have been placing (with OEM encouragement) to boost OEM’s numbers in order race that have had very favorable (for the airline) predelivery payment terms (again, to encourage large orders).


I'm not talking about backlog aircraft. There are several assembly milestones the customer has to pay for. For example, A380 customers had to pay when the aircraft entered final assembly, and had to pay another amount when the aircraft got ferried to XFW for cabin installation.

I’m aware. And all those predelivery payments may end up only being 30-40% of the total cost period. That still leaves 60-70% of the aircraft that the airline has to pay at delivery. The predelivery percentage is going to be lower for “lower risk” aircraft like the A320 (because no one really envisioned an event where even A320s will be hard to delivery in the short term).
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:27 pm

PepeTheFrog wrote:
Ask Volga-Dnepr what they feel about the relationship with Boeing.

VDA walked away from Boeing and now regrets it. No way to spin it as anything else.
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:31 pm

Revelation wrote:
PepeTheFrog wrote:
Ask Volga-Dnepr what they feel about the relationship with Boeing.

VDA walked away from Boeing and now regrets it. No way to spin it as anything else.


When the customer cannot take delivery of the aircraft, the norm is to put the aircraft in temporary storage until the customer is ready. Selling the aircraft barely 3 months after deferral is not how things normally go in the industry.
Good moaning!
 
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Polot
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:42 pm

PepeTheFrog wrote:
Revelation wrote:
PepeTheFrog wrote:
Ask Volga-Dnepr what they feel about the relationship with Boeing.

VDA walked away from Boeing and now regrets it. No way to spin it as anything else.


When the customer cannot take delivery of the aircraft, the norm is to put the aircraft in temporary storage until the customer is ready. Selling the aircraft barely 3 months after deferral is not how things normally go in the industry.

VDA told Boeing to remarket the aircraft. They had no intention of every taking the aircraft until Covid occurred and freighter demand skyrocketed. They were planning on cancelling at beginning of year, they were not trying to defer the order.
 
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PepeTheFrog
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 6:53 pm

flee wrote:
Airbus had better get used to the new normal - aircraft demand will not recover for at least another 5 years (unless oil prices rocket) as airlines will now prefer to use existing equipment longer. One thing will be for sure in future - Airbus will definitely tighten contract terms on future sales.


New normal or not, they will still have go through the contracts.

One of the issues, according to Faury, is that some customers are not picking up the phone.

Without naming them, Faury said some airlines wouldn’t answer the phone at the height the of crisis. “They did not want to pick up the call, they didn’t know what to say.”

He hoped to find a compromise now that many airlines have been rescued and the worst of the crisis is over. “We are hoping with many customers, trying to adjust what is tough for them but not killing them and tough for us but not killing us.”

https://www.politico.eu/article/airbus- ... cheme/amp/

See, Airbus still intends to find a solution with their customers. But if you don't answer the phone, you might get sued.
Good moaning!
 
smartplane
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 7:03 pm

Polot wrote:
PepeTheFrog wrote:
Polot wrote:
That is not true, a majority of the payment is due at time of delivery, not before. This is especially true in recent years with many of the big orders that airlines have been placing (with OEM encouragement) to boost OEM’s numbers in order race that have had very favorable (for the airline) predelivery payment terms (again, to encourage large orders).


I'm not talking about backlog aircraft. There are several assembly milestones the customer has to pay for. For example, A380 customers had to pay when the aircraft entered final assembly, and had to pay another amount when the aircraft got ferried to XFW for cabin installation.

I’m aware. And all those predelivery payments may end up only being 30-40% of the total cost period. That still leaves 60-70% of the aircraft that the airline has to pay at delivery. The predelivery percentage is going to be lower for “lower risk” aircraft like the A320 (because no one really envisioned an event where even A320s will be hard to delivery in the short term).

Small / medium sized airlines use OEM contract template and milestone payments.

Large airlines use their own template approved by the OEM, and milestone payments are subject to negotiation. For these customers, milestone payments are skewed more to CA (back), rather than consistently throughout the construction period. Where engines are purchased direct from the OEM, rather than through the air frame OEM, these are subject to separate milestone payments.

By the time an aircraft is performing CAF, there are two payments remaining - contractural delivery and a payment for warranty, etc.

The CA payment is smaller percentage wise for small / medium sized customers (they have paid more earlier).

In a 10 aircraft order tranche, the last two (or more) units could usually involve no payments, with the customer instead applying accrued OEM credits to meet milestone payments due.

Retrospective credits accrue faster on later deliveries (not a straight line), so unusual for customers to defer or cancel later aircraft in a tranche. If they do, a good indicator they have already taken earlier credits as cash.

Where an OEM takes a tougher credit stance on a customer, more likely to be a turnkey order, with the engines and air frames ordered through A / B. This means A / B are making engine milestone payments, rather than the customer direct (fewer engine milestone payments for air frame OEM's compared to customer direct), so greater financial exposure to these orders (includes engines), but partly offset because progress payments skewed more front than back.
 
strfyr51
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 7:18 pm

xwb777 wrote:
Airlines has placed orders when the economic conditions were right and they want to deffer and cancel them when the economic cinditions are bad. If they (the airlines) are not allowed to cancel and deffer, how can they afford to pay for the airplanes.

This must be a tactical move by Airbus, so the airlines won't cancel and just deffer orders.

the question is? Why was Airbus building Airplanes on Spec? And? Without the progress payments to offset their expenditures like Boeing requires? Or are the just building airplanes to say they're building airplanes Like cars are built without buyers?
 
smartplane
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 7:32 pm

strfyr51 wrote:
xwb777 wrote:
Airlines has placed orders when the economic conditions were right and they want to deffer and cancel them when the economic cinditions are bad. If they (the airlines) are not allowed to cancel and deffer, how can they afford to pay for the airplanes.

This must be a tactical move by Airbus, so the airlines won't cancel and just deffer orders.

the question is? Why was Airbus building Airplanes on Spec? And? Without the progress payments to offset their expenditures like Boeing requires? Or are the just building airplanes to say they're building airplanes Like cars are built without buyers?

Who says Boeing wasn't doing the same with MAX? Who says Boeing isn't doing the same with the 787? Both are deferring / staggering payments, including customer acceptance milestones for certain customers. Both are bringing forward credit accruals for certain customers. Both are using capital vehicles to fund and / or guarantee milestones, rather than relying on external financiers. The capacity of both to do this has it's limits.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 7:32 pm

strfyr51 wrote:
xwb777 wrote:
Airlines has placed orders when the economic conditions were right and they want to deffer and cancel them when the economic cinditions are bad. If they (the airlines) are not allowed to cancel and deffer, how can they afford to pay for the airplanes.

This must be a tactical move by Airbus, so the airlines won't cancel and just deffer orders.

the question is? Why was Airbus building Airplanes on Spec? And? Without the progress payments to offset their expenditures like Boeing requires? Or are the just building airplanes to say they're building airplanes Like cars are built without buyers?

It's clear Airbus has large backlogs of orders on the main products and nothing is being built speculatively. All that is being shown on public facing web sites. What is unknown is how big the progress payments are. That information is not publicly shared. Clearly the deposits were strong enough to keep customers committed under normal economic circumstances. Now we face very unusual economic circumstances and are learning the OEMs have genuine concerns about their customers staying committed.
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mxaxai
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 9:07 pm

strfyr51 wrote:
the question is? Why was Airbus building Airplanes on Spec? And? Without the progress payments to offset their expenditures like Boeing requires? Or are the just building airplanes to say they're building airplanes Like cars are built without buyers?

Airbus is _not_ building airplanes on spec, except for the A380. Aircraft can easily be reallocated to other airlines.

The problem is that not a single airline (well okay, maybe one or two...) wants any new aircraft currently and demand will be reduced for several years in any case. So Airbus has the issue that suppliers need their money right now but airlines would rather wait a bit and pay next year, or maybe in 2025, or never. They're running into a cashflow problem. Boeing found themselves in the same situation with the MAX, albeit in an overall better economy.
 
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 10:59 pm

All of these record years of orders... in the end... the actual deliveries will just be like any other year... big correction.

Okay, I'll take off my Captain Obvious hat now... It's tough... A & B invested allot to scale manufacturing to cut the prices of their jets... now they won't get the benefit of those investments. Well at least Airbus didn't squander a ton of money of stock buybacks.... they have that to their credit.
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FiscAutTecGarte
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 11:02 pm

Revelation wrote:

As for some data, I found the following US TSA passenger data:

Image
Ref: https://twitter.com/firstadopter/status ... 2581897216


just crazy.... and I've flown more the first 6 months of this year than in many years... it's just shocking how no one is flying. I have literally laid accross all 3 seats on every 737 flight I've taken since end of January... no lie.
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WayexTDI
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Re: Airbus threatens to sue airlines

Tue Jun 09, 2020 11:12 pm

jbs2886 wrote:
Breathe wrote:
It wouldn't surprise me if Airbus and Boeing are talking to each other behind closed doors, as essential they are duopoly when it comes to passenger aircraft in the models the manufacture. So it would be in both their interests to make sure airlines didn't go to far "out of line" for their liking regarding payments, deferrals, cancellations etc.


That would be illegal under antitrust laws. Companies are incredibly cautious when it comes to antitrust.

How does that relate to antitrust? What's illegal about 2 companies having similar sales conditions to ensure the market isn't skewed?
Antitrust applies when companies collude to fix pricing; nothing of the sort here.
 
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Re: Airbus threatens to sue airlines

Wed Jun 10, 2020 1:34 am

WayexTDI wrote:
jbs2886 wrote:
Breathe wrote:
It wouldn't surprise me if Airbus and Boeing are talking to each other behind closed doors, as essential they are duopoly when it comes to passenger aircraft in the models the manufacture. So it would be in both their interests to make sure airlines didn't go to far "out of line" for their liking regarding payments, deferrals, cancellations etc.


That would be illegal under antitrust laws. Companies are incredibly cautious when it comes to antitrust.

How does that relate to antitrust? What's illegal about 2 companies having similar sales conditions to ensure the market isn't skewed?
Antitrust applies when companies collude to fix pricing; nothing of the sort here.


Antitrust applies to more than just price fixing - it relates to restraints on trade. For example, if antitrust was more price fixing, all the airlines could coordinate their schedules. Boeing and Airbus coordinating how to deal with airlines would certainly constitute an antitrust violation.

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