|Quoting BoeingBus (Reply 11):|
Boeing got sidetracked with this merger... Integrating the defense groups and closing down the MD11, layoffs, among others tasks.
Absolutely right, and it also had the additional effect of significantly increasing Boeing's cost base, just as the market went into decline - a very bad situation.
I don't think people should forget that Boeing are much deeper into the US market than Airbus as well, and despite a massive splurge of orders this year, how many are coming from the USA? When the US market does turn around, Boeing is likely to benefit enormously.
|Quoting DfwRevolution (Reply 13):|
In retrospect, Boeing has made a lot of smart moves that allowed them to rebound in a timely matter.
In fact for a company that saw deliveries drop from 600+ in 2001 to just 280 in 2003, they've done remarkably well - most companies in this situation would be racking up the losses now.....
|Quoting JetMaster (Reply 26):|
We shouldn't forget one of Airbus' main advantages was lower production costs
And it still is, by quite a large margin.
However, Boeing are working very hard on corporate costs (as recent actions show), and also at changing the construction cost paradigm with the 787 - watch this space....
|Quoting Zeke (Reply 28):|
they have discounted them 25% for SQ.
They'll still make a profit on those. People get too worked up about discounts on here. They're normal practice and have been for years. If you look at the sales and accounting data for both companies for the last few years, you'll see that TOTAL GROSS SALES for both have been at between 17% and 21% discount to list price overall.
Therefore if you're operating margin is 8% (as BCA is this year) of 12.5% (as Airbus is this year) as well, you can see there's lots of scope for discounting. BTW, these operating margins are set to increase for both companies as turnover increases - watch this space...
(For info, Indian Airlines 43 A320 family order lists on ave at c$64m a frame. Indian are chuffed to have got an ave. price of $54m/frame. This year's A320 family deliveries have averaged $41m in costs, plus another $3m on top for contribution to R+D - get the picture?)
Or possibly managed the situation well? $43Bn of hedging does not "luckily" appear.....