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Polot
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 4:37 pm

enzo011 wrote:

Polot wrote:
The 783 was cancelled not because the 787 was too expensive to build but rather because it wasn’t a particularly great aircraft


Seems like this is not what was thought in 2010. Maybe some revisionist history?

Boeing raises aircraft prices 5.2%, cancels short-haul 787

The 787-3 was designed to carry up to 330 passengers as far as 3,500 miles, compared with the 787-8’s top capacity of 250 people and 9,400-mile range. Boeing has been reviewing the model’s future after All Nippon Airways swapped its 787-3 order for another variant in January.

All Nippon had been the last carrier to hold an order for the 787-3, which was designed specifically for the Japanese market.

Boeing diverted resources from the short-haul model in 2008 as it struggled to move the long-distance 787-8 toward production amid problems with parts shortages, redesigns and incomplete work by suppliers. The Dreamliner’s entry into service is running about three years behind schedule.


I struggle to accept that Boeing's engineers were not able to work out what the constraints of the wing was compared to the 788. I think much like why they decided to have the same wing across 3 models when the plans were different, the delays and increased cost meant that reasons had to be found why they made the decisions they did. Do we really think there wouldn't have been a 783 and different wing between the models had they executed the program as envisaged?

That is not “783 cancelled because 787 is too expensive to build”. That is “783 cancelled because current product (783) isn’t good enough (it never got any orders beyond the Japanese launch orders) and Boeing can’t justify the resources to make it work when they would rather focus on 788/789“, especially as the program had extensive delays. I’m not convinced that even in the absence of the 787’s development issues that the 783 would have ever seen the light of the day.

It’s the same reason that the A358 turned from an (somewhat) optimized aircraft to a straight shrink of the A359 to cancelled.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 4:54 pm

enzo011 wrote:
One of those challenges is the cost to buy a new aircraft and one of the factors is the money spent on the programs.

I just don't see how the historic rate of A330/A340 production enters into it. One can argue it has a positive influence because those facilities are paid for, but often the way it works is each program is billed a percentage of the cost of running a site based on footprint, so having a facility scaled up for large production rates ( https://www.airbus.com/newsroom/press-r ... rates.html suggests 8.5 per month and target for more, maybe someone else has better data on peak production rate ) that is not being supported by sales is actually a detriment.

Same can be said for 787, in fact Leeham recently made this same point. It gives more momentum to the idea that the 787 program might be better off moving all production to KCHS which would also give the program lower labor and transport costs.
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VV
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 4:56 pm

enzo011 wrote:
VV wrote:
As why there was this discussion about A330/A340 production cost vs 787 production cost, it is a mystery.


You guys don't know why we are discussing the production cost for aircraft on a topic about future prospects? Unless we think the 787 will have no influence on future sales of the A330neo, impossible, then the different challenges both programs will face comes into the discussion. One of those challenges is the cost to buy a new aircraft and one of the factors is the money spent on the programs. Maybe the information being given isn't what you would like to read, but it doesn't make it off topic.


That is exactly what was discussed in one comment above.

Nowadays Boeing only produce very few 787-8.

The 787-9 and 787-10 capability and economics are much better than A330neo that the only real competition is against the A350-900.
I have very serious doubt Airbus would put the A330neo against the 787-9 or 787-10.
The A330neo could win only with extreme concession in many aspects including engine servicing.

Therefore it become logical to think the threat against the A330neo is mostly second hand A330 CEO and second hand 787-8.

I am sorry to disappoint you, but that 's what I think.
Last edited by VV on Wed Aug 19, 2020 4:59 pm, edited 1 time in total.
 
Scotron12
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 4:56 pm

I think all airlines are praying that recovery is faster than it looks. Even I am, but Im stuck here in UK with no where to go.

Sure, I can go some places..but not Asia without massive restrictions, and certainly not USA. On the EK A380 thread they are restricted to less than 50pax into Australia....50 pax??

I do not know why Leehman singled out the A330neo as an aircraft on life support. If any aircraft that needs life support it's the 777X. We are mid August 2020, Boeing delayed the 777X EIS until 2022. They will reduce the 777 production in 2021 to 2 per month..for all the the 777 models.

At least the A330neo is flying.
 
VV
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:06 pm

Scotron12 wrote:
...
I do not know why Leehman singled out the A330neo as an aircraft on life support. If any aircraft that needs life support it's the 777X. We are mid August 2020, Boeing delayed the 777X EIS until 2022. They will reduce the 777 production in 2021 to 2 per month..for all the the 777 models.

At least the A330neo is flying.


I think that is exactly the point. You need a life support only if you are alive.

The 777-9/-8 are still in development. We still do not know if it would need life support once it is born in 2022 or so.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:11 pm

VV wrote:
enzo011 wrote:
VV wrote:
As why there was this discussion about A330/A340 production cost vs 787 production cost, it is a mystery.


You guys don't know why we are discussing the production cost for aircraft on a topic about future prospects? Unless we think the 787 will have no influence on future sales of the A330neo, impossible, then the different challenges both programs will face comes into the discussion. One of those challenges is the cost to buy a new aircraft and one of the factors is the money spent on the programs. Maybe the information being given isn't what you would like to read, but it doesn't make it off topic.


That is exactly what was discussed in one comment above.

Nowadays Boeing only produce very few 787-8.

The 787-9 and 787-10 capability and economics are much better than A330neo that the only real competition is against the A350-900.
I have very serious doubt Airbus would put the A330neo against the 787-9 or 787-10.
The A330neo could win only with extreme concession in many aspects including engine servicing.

Therefore it become logical to think the threat against the A330neo is mostly second hand A330 CEO and second hand 787-8.

I am sorry to disappoint you, but that 's what I think.


I have no doubt Boeing will compete the 788 and 789 versus the A330NEO. As most future competitions will be versus the 789/78X, that is what the future of the A339's competition will entail.

For used, yes, the A339 competes versus A333 or used 788. But for any competition involving the A330NEO, Boeing will also offer new. This will continue until used prices are too low, for some orders, to compete against.

For airlines with the ability to expand, the offers will be brutal. Any new aircraft that can only compete against used, e.g. the MD-11 at the end, it is only a question of when a line sized for 8.5x per month cannot pay its share of expenses.

The only question is how much footprint reduction Boeing does. In my opinion, Boeing doesn't save much cost leaving Everett until the economy expands again and then they will need more 787 production.

As to the 777x, we have enough doomsayers on other threads. I think a freight model could allow the type to limp to recovery.

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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:15 pm

Scotron12 wrote:
I do not know why Leehman singled out the A330neo as an aircraft on life support. If any aircraft that needs life support it's the 777X. We are mid August 2020, Boeing delayed the 777X EIS until 2022. They will reduce the 777 production in 2021 to 2 per month..for all the the 777 models.

Leeham isn't. Go to the web site, you'll see plenty of bleakness being applied to other aircraft.

Scotron12 wrote:
At least the A330neo is flying.

777x is flying, we've seen three in the air at a time with a fourth already rolled out of the factory in its flight test livery. Unfortunately for Boeing they won't be able to deliver them any time soon.
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:18 pm

VV wrote:
Therefore it become logical to think the threat against the A330neo is mostly second hand A330 CEO and second hand 787-8.

I am sorry to disappoint you, but that 's what I think.

I, OTOH, am glad you think that brand-new 787-8s are a minimal threat to the A330N. :bigthumbsup:
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:31 pm

Revelation wrote:
I just don't see how the historic rate of A330/A340 production enters into it. One can argue it has a positive influence because those facilities are paid for, but often the way it works is each program is billed a percentage of the cost of running a site based on footprint, so having a facility scaled up for large production rates ( https://www.airbus.com/newsroom/press-r ... rates.html suggests 8.5 per month and target for more, maybe someone else has better data on peak production rate ) that is not being supported by sales is actually a detriment.

Same can be said for 787, in fact Leeham recently made this same point. It gives more momentum to the idea that the 787 program might be better off moving all production to KCHS which would also give the program lower labor and transport costs.


I must have missed the discussion about past production rates. What I do see is a discussion about Airbus having paid off the production facilities for the A330 that they are still using now with the 1900 delivered A330/A340 to date. The discussion was about the 787 having 2 lines and less than half the projected deliveries at both lines. As you point out this makes it more viable to have only one line for the 787, but it will mean extra cost as Boeing would have factored in the high production rate at both lines into their cost analysis as well. If Airbus has a problem, you can be sure Boeing has the same and vice versa most likely.

Polot wrote:
That is not “783 cancelled because 787 is too expensive to build”. That is “783 cancelled because current product (783) isn’t good enough (it never got any orders beyond the Japanese launch orders) and Boeing can’t justify the resources to make it work when they would rather focus on 788/789“, especially as the program had extensive delays. I’m not convinced that even in the absence of the 787’s development issues that the 783 would have ever seen the light of the day.

It’s the same reason that the A358 turned from an (somewhat) optimized aircraft to a straight shrink of the A359 to cancelled.


I will quote the article again,

All Nippon had been the last carrier to hold an order for the 787-3, which was designed specifically for the Japanese market.


That is why there was only those customers, it wasn't meant for other markets.

Boeing diverted resources from the short-haul model in 2008 as it struggled to move the long-distance 787-8 toward production amid problems with parts shortages, redesigns and incomplete work by suppliers. The Dreamliner’s entry into service is running about three years behind schedule.


Please highlight to me where in that article it says the current proposed product wasn't good enough. I see a late 788 having all resources dedicated to it and the 783 falling away as a result. I am open to articles confirming what you have said.

VV wrote:
That is exactly what was discussed in one comment above.

Nowadays Boeing only produce very few 787-8.

The 787-9 and 787-10 capability and economics are much better than A330neo that the only real competition is against the A350-900.
I have very serious doubt Airbus would put the A330neo against the 787-9 or 787-10.
The A330neo could win only with extreme concession in many aspects including engine servicing.

Therefore it become logical to think the threat against the A330neo is mostly second hand A330 CEO and second hand 787-8.

I am sorry to disappoint you, but that 's what I think.


It's fine if that is what you think. it doesn't mean you are right though. All aircraft are going to suffer right now and will need to be nursed until the good times come back. The A330neo faces more challenges than the 787 and A350, but at the same time it has advantages that the other 2 programs don't have or the 777X has. Each program has specific challenges.

But going for the A330neo is that facilities has been paid off and with the 787 having cut production the time where Boeing could offer cheap prices are gone in the short term. So the one advantage the A330neo seemed to lose is back again. Also, if Airbus cancels the A330neo it will only have the A350 and I don't think they will be happy with that.

So in summary, challenges remain for the A330, but this is not unique. However it has some advantages over the other programs that will hopefully mean it will stay in production for a long time yet. Let us not forget this is not the first time the A330 has been declared dead.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:32 pm

Antaras wrote:
TC957 wrote:
Jetstar and TUI aren't legacy carriers and have 787's.

Oops, my bad. Sorry :D


And don't forget Westjet & Vistara.
 
Scotron12
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:35 pm

Revelation wrote:
Scotron12 wrote:
I do not know why Leehman singled out the A330neo as an aircraft on life support. If any aircraft that needs life support it's the 777X. We are mid August 2020, Boeing delayed the 777X EIS until 2022. They will reduce the 777 production in 2021 to 2 per month..for all the the 777 models.

Leeham isn't. Go to the web site, you'll see plenty of bleakness being applied to other aircraft.

Scotron12 wrote:
At least the A330neo is flying.

777x is flying, we've seen three in the air at a time with a fourth already rolled out of the factory in its flight test livery. Unfortunately for Boeing they won't be able to deliver them any time soon.


I should have said in service with airlines. My bad :white:
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:41 pm

Noshow wrote:
Maybe this is not adjusted by value for today's Dollars and mixing up amounts from tens of years ago with current budgets?


Maybe it doesn't include government funded launch aid.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 5:46 pm

Revelation wrote:
Yet you ignored that Airbus has been delivering their planes for 27 years and Boeing has been delivering theirs for 9 years, so you're comparing a ball park to an airport.

I'm wondering why we are discussing the past production rate of A340 and A330ceo when the topic is the future of the A330neo.


I don’t think anyone in this thread has forgotten the long successful production line that the A330neo comes from, and I don’t think anyone is suggesting that it has ever ramped up to a level the 787 has. The assertion made earlier in this thread was the 787 is cheaper to build going forward, and my counter to that is how can Boeing be producing 6 frames a month over two very young production sites that have yet to pay their way cheaper than Airbus can build two A330s on the same production line they have been rolling aircraft out of for 27 years that has been fully paid off.
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VV
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 6:31 pm

Devilfish wrote:
VV wrote:
Therefore it become logical to think the threat against the A330neo is mostly second hand A330 CEO and second hand 787-8.

I am sorry to disappoint you, but that 's what I think.

I, OTOH, am glad you think that brand-new 787-8s are a minimal threat to the A330N. :bigthumbsup:


No, brand new 787-8 is not a threat to the A330neo.

A330 CEO is the real threat and it will do the job perfectly.
 
JayinKitsap
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 6:37 pm

Past development and production cost comparisons seem irrelevant. Recent orders will tell more.
787 2017- 94 2018-109 2019-82 2020-25 310 orders in the period.
330 neo 2017-6 2018-18 2019-99 2020- -5 118 orders in the period.

The 330 primarily competes with the 787, noted above the recent campaigns are running at 2.6:1 for the 787. Yes, the 350 also competes against the 787, but this thread is about the A330neo future. Yes 118 orders in 3.5 years is not great, it covers an average production of 34 per year or around 3/month. Difficult to produce profitably.

Yes the 787 having 2 production lines increases costs substantially. That is a problem for Boeing to resolve and they need to boost orders from here on out, except the next 2 years will be difficult to get any orders.

Back to the A330neo, how to win profitable orders for the A330neo in this new marketplace. Yes, both the 787 and A330 new orders will be competing by the WB's that are already in service. Also, a big competition keeping the current backlogs, carriers in RED condition will likely not ever take delivery. What is the real backlogs.
Last edited by JayinKitsap on Wed Aug 19, 2020 6:42 pm, edited 1 time in total.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 6:37 pm

I actually don't think the future will be a problem for these new or re-engined platforms. First, this Corona thing won't last forever, a vacine is expected during 2021, second airplanes such as the A321 are very limited in payload/range and cargo volume so widebodies will still be in high demand, third when the market comes back and because of the cuts we are seeing in fleets especially older airframes being retired, there will be a need in the near future (3 to 4 years) for new airframes but maybe smaller airframes. We shall not forget that the A330neo is the cheapest widebodie aircraft in terms of acquisition/leasing costs and if aircraft usage is reduced in the next year there will be a shift of cost from the maintenance and operating cost to leasing costs. What I'm expecting to see is some A350 being deferred in favour of the A330neo, and the stall of new orders of the bigger capacity more expensive variants A350-1000, 777x. Also, noise and emission restrictions coming around the mid of the decade will dictate the need of these new aircraft.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 7:08 pm

enzo011 wrote:
...


“Designed for the Japanese domestic market” is the actual revisionist history. It was no doubt heavily designed to appeal to the Japanese to woo them so they would launch the 7E7 program, but Boeing was hoping others would take the plane too. I know they were pitching it to several US carriers (notably UA) for replacement of domestic/TATL wide bodies for example.

With 788 flight testing progressing with real data it became clear just how narrow the range window where the 783 was projected to be better than the 788 was going to be, and the writing was on the wall.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 7:46 pm

Noshow wrote:
The old A330/A340 line must be written off? So it should be cheap to build new A330neos compared to new high tech lines with expensive technologies and teething troubles.. Experienced final assembly staff is available as well that is far down the learning curve. It doesn't get much better than this.

You are right. But you assume NEO v A350 sales are on a level platform within Airbus, both promoted vigorously and impartially. They are not. Post-COVID, A330NEO may be closer to the right size than the A350.
 
smartplane
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 8:06 pm

zeke wrote:
jeffrey0032j wrote:
As explained above, the 787 has managed to erase the A330 cost advantage, the 787 is also a mature product with almost all the teething problems resolved for quite a few years now, plus production issues have been ironed out long ago - the 787 is more available than the A330 now if you ordered a brand new one now.


This keeps being repeated as is if it fact, there is no evidence to support that the true cost of building a 787 is lower than the A330, especially now with all the investment that was made to have two lines producing high volumes and volumes now not even enough to support a single line.

All of the real estate, buildings, machinery, tooling and staff costs are being spread over way fewer airframes.

Performance and disclosed pricing have been eclipsed by the magnitude of below the line price support primarily in the form of conditional retrospective credits, including credit values compounding based on the retention of new aircraft by the first owner, and credits packaged with used aircraft to boost / stabilise used values.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 9:01 pm

Polot wrote:
“Designed for the Japanese domestic market” is the actual revisionist history. It was no doubt heavily designed to appeal to the Japanese to woo them so they would launch the 7E7 program, but Boeing was hoping others would take the plane too. I know they were pitching it to several US carriers (notably UA) for replacement of domestic/TATL wide bodies for example.

With 788 flight testing progressing with real data it became clear just how narrow the range window where the 783 was projected to be better than the 788 was going to be, and the writing was on the wall.



I guess the journalist didn't know what she was writing about. However she may have gotten her information from elsewhere,

Boeing will likely scrap 787-3

“It’s my guess that it won’t be part of our product offering in the future,” Boeing’s commercial aircraft marketing head Randy Tinseth said Tuesday in an interview at the Singapore Air Show. The plane was specifically designed for Japanese carriers, he said, declining to elaborate on the program costs.


Are you going to say that Randy Tinseth was engaged in some revisionist history in February 2010?

I am also not sure if the narrative that they discovered how close the 788 was to the 783 is a reason why they thought to abandon it. Unless you are telling me that they figured this out within 2 months of the first flight of a delayed project trying to catch up. I am calling BS on that narrative. The program was bleeding money because of the delays and they needed to focus their efforts on getting the 788 certified and delivered and on the 748,

Abandoning the 787-3 would enable Boeing to focus on introducing the more popular long-range -8 and -9 versions of the Dreamliner as well as the 747-8. The planemaker diverted resources from the short-haul 787-3 in 2008 as it struggled to move the long-haul types toward production.

“They’ve been wanting to consolidate on one model as much as possible,” said Peter Harbison, managing director at the Sydney-based industry consultant Centre for Asia Pacific Aviation.
 
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Polot
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 9:28 pm

enzo011 wrote:
Polot wrote:
“Designed for the Japanese domestic market” is the actual revisionist history. It was no doubt heavily designed to appeal to the Japanese to woo them so they would launch the 7E7 program, but Boeing was hoping others would take the plane too. I know they were pitching it to several US carriers (notably UA) for replacement of domestic/TATL wide bodies for example.

With 788 flight testing progressing with real data it became clear just how narrow the range window where the 783 was projected to be better than the 788 was going to be, and the writing was on the wall.



I guess the journalist didn't know what she was writing about. However she may have gotten her information from elsewhere,

Boeing will likely scrap 787-3

“It’s my guess that it won’t be part of our product offering in the future,” Boeing’s commercial aircraft marketing head Randy Tinseth said Tuesday in an interview at the Singapore Air Show. The plane was specifically designed for Japanese carriers, he said, declining to elaborate on the program costs.


Are you going to say that Randy Tinseth was engaged in some revisionist history in February 2010?

I am also not sure if the narrative that they discovered how close the 788 was to the 783 is a reason why they thought to abandon it. Unless you are telling me that they figured this out within 2 months of the first flight of a delayed project trying to catch up. I am calling BS on that narrative. The program was bleeding money because of the delays and they needed to focus their efforts on getting the 788 certified and delivered and on the 748,

Abandoning the 787-3 would enable Boeing to focus on introducing the more popular long-range -8 and -9 versions of the Dreamliner as well as the 747-8. The planemaker diverted resources from the short-haul 787-3 in 2008 as it struggled to move the long-haul types toward production.

“They’ve been wanting to consolidate on one model as much as possible,” said Peter Harbison, managing director at the Sydney-based industry consultant Centre for Asia Pacific Aviation.

Uhh yes. Company PR heads do revisionist history all the time to make their company and miss-steps look better. Their entire job is rooted in spinning everything to paint Boeing in as positive a light as possible. 783 only sold to 2 Japanese airlines (who placed their order at program launch) which makes it very easy to say that it was designed exclusively for their market and Boeing never expected any other sales.

None of what you are quoting proves that the 787 is too expensive to build (the original statement I responded to) which resulted in the 783 cancelation. Rather its lack of high sales meant that it got canned (you think if Boeing sold 500 783s by 2010 they would have cancelled it just to focus on the 788/789 and 748?) when the program encountered difficulties.

Like I said before (to kinda bring this back on topic) this is the exact same thing that happened with the A358 which resulted in the A330neo. Substandard product that wasn’t worth company resources when more important variants needed focus.
 
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 11:32 pm

Ncfc99 wrote:
SEPilot wrote:
And second, that Boeing would not be able to slash their costs so as to be able to sell the 787 for what they could sell the A330NEO.


Could you, or anyone, provide a link or document showing that production costs are comparible for both planes please? Not doubting it, would like to read more about it.

I doubt such figures are available, as Boeing guards them closely. We can only go by what insiders have said and the outcomes of sales campaigns. But it does appear that the A330NEO has not enjoyed a significant price advantage over the 787.
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Re: A330neo future bleak from COVID impact

Wed Aug 19, 2020 11:40 pm

zeke wrote:
Revelation wrote:
Yet you ignored that Airbus has been delivering their planes for 27 years and Boeing has been delivering theirs for 9 years, so you're comparing a ball park to an airport.

I'm wondering why we are discussing the past production rate of A340 and A330ceo when the topic is the future of the A330neo.


I don’t think anyone in this thread has forgotten the long successful production line that the A330neo comes from, and I don’t think anyone is suggesting that it has ever ramped up to a level the 787 has. The assertion made earlier in this thread was the 787 is cheaper to build going forward, and my counter to that is how can Boeing be producing 6 frames a month over two very young production sites that have yet to pay their way cheaper than Airbus can build two A330s on the same production line they have been rolling aircraft out of for 27 years that has been fully paid off.


I agree with this. Airbus is in a position to make low-rate production of the A330NEO work better than Boeing is with the 787. It has been recently reported that Boeing is studying condensing the 787 lines from 2 to 1. Doing this will cost Boeing money and hurt Boeing's ability to build 787's rapidly should the market pick up again. Boeing was using high 787 production rates to compensate for the huge development costs they had to write off in the early days of the program.

The A330NEO program will survive, much like the B757 program survived a bad sales slump in the early-1980's. The B787 will also survive, but it won't have the economy of scale advantage it enjoyed pre-COVID.
 
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 3:51 am

It doesn’t matter how much the A330neo, the 787 or any other program took to develop once the development money is spent. All that matters going forward is can you make positive margin (essentially operating profit or EBITDA) on the aircraft you are building now and in the future. Accounting entries for money already spent are irrelevant. From what we know, it will be very difficult for Airbus to make positive margin going forward at 2 per month, especially since I don’t see them selling A330’s at 2 per month for many years. The 787 should have a much easier time generating positive margins with its higher production rate and superior performance, especially if Boeing consolidates to lower cost South Carolina. It is going to be very difficult for any wide body aircraft to have positive EBITDA for several years. It is quite apparent the A330neo will have the toughest time ever returning to positive EBITDA due to very low production/demand and a demonstrably superior direct competitor. If there is no realistic path to return to positive EBITDA, rational businesses pull the plug as happened with the A380 and then the 747. You only keep bleeding money in the present if there is a realistic future path to operating profitability.
 
Sokes
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 4:14 am

If customers avoid RR engines on the B787, why would they choose A330 Neo over B787?
What will be the more attractive aircraft once RR engines become reliable again?
Why can't the world be a little bit more autistic?
 
Sokes
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 4:23 am

Jetport wrote:
Accounting entries for money already spent are irrelevant.

I tried to explain this to my landlord, but he didn't want to listen. :D
Why can't the world be a little bit more autistic?
 
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JerseyFlyer
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 6:13 am

We established in earlier threads that there are two sweet spots where the 330neo has a good chance against the 787.

1. LCCs configured 9 abreast

2. Carriers trading on comfort in Y at 8 abreast such as DL and maybe VS.

Covid has not changed those in principle but may have changed the future demand for them
 
Scotron12
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 7:13 am

I don't know how many A330neos are already built and awaiting delivery, but Boeing has 787 delivery issues too.

According Bloomberg, Boeing has up to 50 x B787s built but not delivered.

https://www.fool.com/investing/2020/07/ ... ssues.aspx
 
VV
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 7:16 am

JerseyFlyer wrote:
We established in earlier threads that there are two sweet spots where the 330neo has a good chance against the 787.

1. LCCs configured 9 abreast

2. Carriers trading on comfort in Y at 8 abreast such as DL and maybe VS.

Covid has not changed those in principle but may have changed the future demand for them



Is 787 the real threat to A330neo?

Some previous comments mentioned relatively young A330 CEO that entered the second hand market or that come out from first lease term could become a significant threat to the A330neo.
It seems the aspects influencing the above opinion are:
  • many A330 CEO are offered in the market due to the current crisis
  • very low lease rate for A330 CEO due to the excess of offer
  • low fuel price.
 
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enzo011
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 9:46 am

Polot wrote:
Uhh yes. Company PR heads do revisionist history all the time to make their company and miss-steps look better. Their entire job is rooted in spinning everything to paint Boeing in as positive a light as possible. 783 only sold to 2 Japanese airlines (who placed their order at program launch) which makes it very easy to say that it was designed exclusively for their market and Boeing never expected any other sales.

None of what you are quoting proves that the 787 is too expensive to build (the original statement I responded to) which resulted in the 783 cancelation. Rather its lack of high sales meant that it got canned (you think if Boeing sold 500 783s by 2010 they would have cancelled it just to focus on the 788/789 and 748?) when the program encountered difficulties.

Like I said before (to kinda bring this back on topic) this is the exact same thing that happened with the A358 which resulted in the A330neo. Substandard product that wasn’t worth company resources when more important variants needed focus.



So the article was wrong and Boeing didn't divert resources to the 788 in 2008 and the reason the 783 was cancelled wasn't the delayed and costly 788 but the lack of sales. You do realize the lack of sales meant any extra cost spent on the 787 program as a whole was going to make the business case very difficult for the 783 and the few sales it had? We are both right, but you are wrong to say it wasn't the production cost of the 788 that led to its cancellation. The lack of sales made it easier but it doesn't change that fact, no matter how much you want to deny it.

As for the similarities between it and the A358, yes in that both were compromised designs. The reasons for cancellation may be different but both models were cancelled.
 
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enzo011
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 9:49 am

VV wrote:
Is 787 the real threat to A330neo?

Some previous comments mentioned relatively young A330 CEO that entered the second hand market or that come out from first lease term could become a significant threat to the A330neo.
It seems the aspects influencing the above opinion are:
  • many A330 CEO are offered in the market due to the current crisis
  • very low lease rate for A330 CEO due to the excess of offer
  • low fuel price.



Yes the 787 is the real threat to the A330neo. There are other threats but the 787 is where the A330neo is vying for sales. The secondhand A330s and 787s that will come to market will be a threat to both programs though.

Also, fuel price will not stay low forever and while it may never reach the peaks of a few years ago, it will not stay at the low levels either.
 
VV
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 10:23 am

enzo011 wrote:
...
The secondhand A330s and 787s that will come to market will be a threat to both programs though.

Also, fuel price will not stay low forever and while it may never reach the peaks of a few years ago, it will not stay at the low levels either.


Boeing do not deliver many 787-8 anylore. Most of their backlog is 787-9 and 787-10.
Future sales will also be mostly 787-9 and 787-10 that are more a contender to the A350-900.

Let us not forget the 787-9 entered into service only in 2014.

"Fuel price will not stay low forever". It may stay long enough, say three or four years.
 
olle
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 10:37 am

Polot wrote:
enzo011 wrote:

Polot wrote:
The 783 was cancelled not because the 787 was too expensive to build but rather because it wasn’t a particularly great aircraft


Seems like this is not what was thought in 2010. Maybe some revisionist history?

Boeing raises aircraft prices 5.2%, cancels short-haul 787

The 787-3 was designed to carry up to 330 passengers as far as 3,500 miles, compared with the 787-8’s top capacity of 250 people and 9,400-mile range. Boeing has been reviewing the model’s future after All Nippon Airways swapped its 787-3 order for another variant in January.

All Nippon had been the last carrier to hold an order for the 787-3, which was designed specifically for the Japanese market.

Boeing diverted resources from the short-haul model in 2008 as it struggled to move the long-distance 787-8 toward production amid problems with parts shortages, redesigns and incomplete work by suppliers. The Dreamliner’s entry into service is running about three years behind schedule.


I struggle to accept that Boeing's engineers were not able to work out what the constraints of the wing was compared to the 788. I think much like why they decided to have the same wing across 3 models when the plans were different, the delays and increased cost meant that reasons had to be found why they made the decisions they did. Do we really think there wouldn't have been a 783 and different wing between the models had they executed the program as envisaged?

That is not “783 cancelled because 787 is too expensive to build”. That is “783 cancelled because current product (783) isn’t good enough (it never got any orders beyond the Japanese launch orders) and Boeing can’t justify the resources to make it work when they would rather focus on 788/789“, especially as the program had extensive delays. I’m not convinced that even in the absence of the 787’s development issues that the 783 would have ever seen the light of the day.

It’s the same reason that the A358 turned from an (somewhat) optimized aircraft to a straight shrink of the A359 to cancelled.


As I remember it A358 was going to have similar number as A330Neo as it was defined as a A359 schrink.

But as a optimized A358 and not only A359 scrink is showed better numbers then the A330Neo. Airbus was very sceptical until AirAsia pushed them.

For Airbus I can see advantages to have a filler A350 production line then 2 productions lines A330 and A350 one on life support and one half full.

I believe that part of the decision of keeping A330 line was to gain close 50% market share in WB against Boeing.

Now in order to get back to black numbers I think an optimized A350 line with 3 family member with close 8 frames per month can be better then keping A330 alive on 1-2 frames per month and A350 with 6.

By the way Boeing sits on a similar situation with 777 2 frames per month and 787 3 frames per line. I can see some dramatic decisions there as well if demand do not come back.
 
JonesNL
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 1:05 pm

VV wrote:
enzo011 wrote:
...
The secondhand A330s and 787s that will come to market will be a threat to both programs though.

Also, fuel price will not stay low forever and while it may never reach the peaks of a few years ago, it will not stay at the low levels either.


Boeing do not deliver many 787-8 anylore. Most of their backlog is 787-9 and 787-10.
Future sales will also be mostly 787-9 and 787-10 that are more a contender to the A350-900.

Let us not forget the 787-9 entered into service only in 2014.

"Fuel price will not stay low forever". It may stay long enough, say three or four years.


The biggest problem with selling the A330neo, 787-9/10, A350 or 777x is that the second hand market is full of options that can match or exceed some capabilies of the new birds at much lower CAPEX which destroys the CASM benefit that the newer birds have. Need the range and not the highest cargo and pax -> A330ceo is your plane. Need the range and high cargo and pax -> 777-300ER is your plane.

Another issue is that the second hand market is extremely flexible at the moment. You want to test the waters with reopening a new route; lease a plane for 3-4 months and get it delivered tomorrow.

The widebody market will be an bloodbath for both parties, with one doing maybe 5% less bad than the other, which in the bigger schemes of things, will have no bearing whatsoever.
 
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Revelation
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 1:42 pm

SEPilot wrote:
Ncfc99 wrote:
SEPilot wrote:
And second, that Boeing would not be able to slash their costs so as to be able to sell the 787 for what they could sell the A330NEO.

Could you, or anyone, provide a link or document showing that production costs are comparible for both planes please? Not doubting it, would like to read more about it.

I doubt such figures are available, as Boeing guards them closely. We can only go by what insiders have said and the outcomes of sales campaigns. But it does appear that the A330NEO has not enjoyed a significant price advantage over the 787.

Either that, or Airbus does not price the A330neo aggressively to protect the A350.
Wake up to find out that you are the eyes of the world
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cledaybuck
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 2:06 pm

Jetport wrote:
It doesn’t matter how much the A330neo, the 787 or any other program took to develop once the development money is spent. All that matters going forward is can you make positive margin (essentially operating profit or EBITDA) on the aircraft you are building now and in the future. Accounting entries for money already spent are irrelevant. From what we know, it will be very difficult for Airbus to make positive margin going forward at 2 per month, especially since I don’t see them selling A330’s at 2 per month for many years. The 787 should have a much easier time generating positive margins with its higher production rate and superior performance, especially if Boeing consolidates to lower cost South Carolina. It is going to be very difficult for any wide body aircraft to have positive EBITDA for several years. It is quite apparent the A330neo will have the toughest time ever returning to positive EBITDA due to very low production/demand and a demonstrably superior direct competitor. If there is no realistic path to return to positive EBITDA, rational businesses pull the plug as happened with the A380 and then the 747. You only keep bleeding money in the present if there is a realistic future path to operating profitability.

Right. Those are sunk costs.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
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Ncfc99
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 2:24 pm

SEPilot wrote:
Ncfc99 wrote:
SEPilot wrote:
And second, that Boeing would not be able to slash their costs so as to be able to sell the 787 for what they could sell the A330NEO.


Could you, or anyone, provide a link or document showing that production costs are comparible for both planes please? Not doubting it, would like to read more about it.

I doubt such figures are available, as Boeing guards them closely. We can only go by what insiders have said and the outcomes of sales campaigns. But it does appear that the A330NEO has not enjoyed a significant price advantage over the 787.


Hmmmm, so there is no firm concrete evidence that the 787 is cheaper to produce than a 330 but it has become 'anet fact', which is then repeated over and over.........

Again, if anyone has anything that shows its not an 'anet fact', but an actual 'fact', id love to see it.
 
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Devilfish
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 2:59 pm

VV wrote:
A330 CEO is the real threat and it will do the job perfectly.

Not if an airline wants it to do what the more expensive A359 is doing.

And as if to add insult to injury..... :stirthepot:

https://www.flightglobal.com/x-doesnt-m ... 17.article
"Everyone is entitled to my opinion." - Garfield
 
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frigatebird
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 3:01 pm

JerseyFlyer wrote:
We established in earlier threads that there are two sweet spots where the 330neo has a good chance against the 787.

1. LCCs configured 9 abreast

2. Carriers trading on comfort in Y at 8 abreast such as DL and maybe VS.

Covid has not changed those in principle but may have changed the future demand for them


1: absolutely.
2: I believe DL is one of the few airlines that really has made this an important argument. IIRC the VS order for the A330neo was strongly influenced by DL, who wanted a comparable seat comfort on their TransAtlantic JV. Maybe AF will decide for the A330neo for the same reason, shifting their small 787 fleet to KL.

IMO there is a 3rd good oppurtunity for the A330neo, it's with airlines which have the A330ceo in their fleet but haven't ordered the 787 yet.

olle wrote:
Now in order to get back to black numbers I think an optimized A350 line with 3 family member with close 8 frames per month can be better then keping A330 alive on 1-2 frames per month and A350 with 6.

By the way Boeing sits on a similar situation with 777 2 frames per month and 787 3 frames per line. I can see some dramatic decisions there as well if demand do not come back.


Interesting points, especially about reviving an optimised A358. Could coincide with an A350neo. Most of us thought the A350 would be expanded with a larger variant, but maybe now a shorter variant would via more viable.

As for Boeing, I think the 777 line will survive, at the end of last century the 777 line didn't have such high outputs either. For the 787, closing the Everett line is very much a possibility :sigh:
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VV
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 3:27 pm

Devilfish wrote:
VV wrote:
A330 CEO is the real threat and it will do the job perfectly.

Not if an airline wants it to do what the more expensive A359 is doing.

And as if to add insult to injury..... :stirthepot:

https://www.flightglobal.com/x-doesnt-m ... 17.article


Wait! Now you are saying that A330neo eats into A350-900 market? Is that what you meant?

as for EurAsia X, Tony can say whatever he wants but he has a history of cancelling "firm" orders.
 
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Revelation
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Re: A330neo future bleak from COVID impact

Thu Aug 20, 2020 3:29 pm

Devilfish wrote:
And as if to add insult to injury..... :stirthepot:

https://www.flightglobal.com/x-doesnt-m ... 17.article

Yes, pretty "bleak" outlooks in that article.

Let's look at the most optimistic part, the blurb from Airbus's marketing team:

Airbus, for its part, stresses that its production rate of two A330neos per month fits the new environment, and that it is capable of adjusting rates depending on market demand. It also notes that there nearly 600 A330s are operating in the Asia-Pacific, the biggest fleet of the type globally, and the A330neo is ideally positioned to replace these jets.

“Coming out of the crisis both passenger demand and yields are likely to remain depressed and airlines will seek to control their financial exposure,” says Airbus.

“The A330neo supports airlines with a winning combination of new generation economics, commonality, flexibility, industry leading reliability and lower fixed capital costs than competition aircraft. With these powerful levers, the A330neo is the right aircraft for Asia-Pacific airlines looking for financial stability during these uncertain times.”

How does one get financial stability by buying new A330neo when passenger demand and yields are likely to remain depressed?

Maybe if one goes through bankruptcy and dumps all its own aircraft and someone like Airbus back stops some loans to get a new fleet?

This is kinda what happened in the various 00s era consolidation bankruptcies in the US, but now the big players like Airbus are themselves struggling.

I guess the A330neo market depends on how long it takes for airlines to decide they can't keep flying A330ceo (both their own and cheap ones they can get from the 2nd hand market) and need to buy a replacement. I think it could be many years before this happens.

It seems the APAC market was doing well earlier in the 10s but by the end we were seeing a lot of signs that there was too much capacity on the market and some weak players were really struggling. Now with COVID19, everyone is struggling.

One would think China is the strongest market in the area, The problem for A330neo is that market seems to prefer 787 and A350.

It is interesting that the article referred to some orders from leasing firms as "speculative". That is pretty worrisome for the health of the backlog, I think.
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9Patch
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 5:07 am

Sokes wrote:
Jetport wrote:
Accounting entries for money already spent are irrelevant.

I tried to explain this to my landlord, but he didn't want to listen. :D

Your comment makes no sense.
Your landlord is the one with the sunk costs, not you.
 
Sokes
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 6:39 am

How are fuselage and wing of early B787 keeping up?
If there is no wear/ microcracks and life everlasting a much higher price may be worth it at low interest rates.
Why can't the world be a little bit more autistic?
 
Sokes
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 6:43 am

9Patch wrote:
Sokes wrote:
Jetport wrote:
Accounting entries for money already spent are irrelevant.

I tried to explain this to my landlord, but he didn't want to listen. :D

Your comment makes no sense.
Your landlord is the one with the sunk costs, not you.

Yes. The capital cost of the flat is a sunk cost.
So I tried to convince my landlord to charge me only for fire insurance, house tax and garbage disposal.
:bouncy:
Why can't the world be a little bit more autistic?
 
9Patch
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 2:11 pm

Sokes wrote:
9Patch wrote:
Sokes wrote:
I tried to explain this to my landlord, but he didn't want to listen. :D

Your comment makes no sense.
Your landlord is the one with the sunk costs, not you.

Yes. The capital cost of the flat is a sunk cost.
So I tried to convince my landlord to charge me only for fire insurance, house tax and garbage disposal.
:bouncy:

I assume he said NO, thus proving accounting entries for money already spent are irrelevant. :wave:
 
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Devilfish
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 2:51 pm

VV wrote:
Wait! Now you are saying that A330neo eats into A350-900 market? Is that what you meant?

It's the other way around. The A359 is preventing the A330N to come into its own!


Revelation wrote:
Maybe if one goes through bankruptcy and dumps all its own aircraft and someone like Airbus back stops some loans to get a new fleet?

That will be the day :!: Airbus: "Here, Airline...return your widebody planes to the lessors and we will arrange cheap financing on a brand-new fleet of A338s for you." :bigthumbsup:
"Everyone is entitled to my opinion." - Garfield
 
filipinoavgeek
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 4:40 pm

Devilfish wrote:
That will be the day :!: Airbus: "Here, Airline...return your widebody planes to the lessors and we will arrange cheap financing on a brand-new fleet of A338s for you." :bigthumbsup:

Sorry to burst your bubble but the A338 is all but dead especially with COVID. It is very unlikely to see many more orders if any and I can see it being discontinued very soon in favor of the A339/A350/A321XLR. And I really doubt that Airbus would want to have airlines exchange their old planes for such an unpopular type. If Airbus were to do that, they'd probably be giving away A350s instead. And in all honesty, your fondness for the A338 is bordering on unrealistic and I'm not even sure why you seem to like this specific type out of all the types in the world, when in reality the A338 (and perhaps even the A330neo as a whole) simply does not have a future. Not when the 787 (and to a lesser extent the A350 and soon the A321XLR) can already do its job and are much more capable and flexible.
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Devilfish
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 6:07 pm

You're not sorry at all...in fact you've made it your personal crusade to burst it all the time. Frankly, your obsession with what I like is itself bordering on the absurd. It's more irrational for Airbus to be giving away the more expensive and in demand A350. Your fixation on popularity makes you unable to grasp that the less CAPEX outlay model you deride is the right-size equipment for these depressed demand times which are foreseen to linger on for many years still. The A338 hasn't demonstrated its versatility in real airline service yet...but KU's first two frames would prove its mettle and give the 788 a very tight run for its money. Who knows...Airbus might even extend similar accommodation to first generation 788 operators who would switch to the A338! :lol:
"Everyone is entitled to my opinion." - Garfield
 
Sokes
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 6:10 pm

9Patch wrote:
Sokes wrote:
9Patch wrote:
Your comment makes no sense.
Your landlord is the one with the sunk costs, not you.

Yes. The capital cost of the flat is a sunk cost.
So I tried to convince my landlord to charge me only for fire insurance, house tax and garbage disposal.
:bouncy:

I assume he said NO, thus proving accounting entries for money already spent are irrelevant. :wave:

:white:
O. k., sunk costs are costs that can't be recovered. So strictly speaking it doesn't apply to a flat which is rented out.
But to say a company can just ignore past cost is a bit like a landlord not charging capital costs.

I believe the A380 was an example for sunk cost. If it can't be produced with operating profit it's better to write down whatever value is still shown in the books and cease production.
I hope same is not true for B787. As long as the B787 can generate operating profit the deferred costs are not sunk costs.

I believe strictly speaking we are both wrong, but then I just made a joke.
O. k., so did you.
Why can't the world be a little bit more autistic?
 
VV
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Re: A330neo future bleak from COVID impact

Fri Aug 21, 2020 6:21 pm

Devilfish wrote:
VV wrote:
Wait! Now you are saying that A330neo eats into A350-900 market? Is that what you meant?

It's the other way around. The A359 is preventing the A330N to come into its own!
...


Do you mean that A330neo is not good enough or cheap enough to compete with A350-900?

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