dhefty
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Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 3:47 am

Many a.netters have questioned the rosy sales forecasts for the A380, but this is the first I've seen by a former Airbus executive:

http://leeham.net/filelib/A380V6.pdf

Notice he is not criticizing the plane itself, just the business case for it. Thanks to Scott Hamilton for providing the link.
 
MD-90
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:16 am

Hey, that's a really good article. He puts it succinctly: market fragmentation is a very real phenomenon. If you can replace a 747 with a 777 and enjoy a 10% cost saving with only a 1% loss of revenue, why not?

[Edited 2006-03-14 20:23:26]
 
TheSonntag
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:20 am

Quoting MD-90 (Reply 3):
Hey, that's a really good article. He puts it succinctly: market fragmentation is a very real phenomenon.

Maybe, but FRA remains FRA, and the market for LON-SYD is not open to fragmentation.

Maybe it could have made more sense to build the A380 somewhat smaller, so that it would be a direct replacement to the 747s. But Germany still only has less than 5 airports which really make sense as long-range airports, and I doubt that we will see too much fragmentation here. Inside Europe, yes. Between the US and Europe, as well. But despite all changes, there are routes which cannot be replaced, like FRA-SFO, and these require larger planes as the current slot-situation in FRA is not to change in the foreseeable future.
 
aeropiggot
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:21 am

I respect the guys opinion, however I beleive the true test will come, after Airbus delivers the first 10 or so airplanes. Then if these guys are not lining up for additional orders, then the airplane's faith is sad indeed. A lot of Boeing folkes are saying I told you so, another telling indicator could also be 747-8 orders.  worried 
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BestWestern
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:21 am

Before we take this as gospel - look at the premise of his belief - in para 2.


Para 2

In a world free from bi-lateral restrictions and market protection, hub
economics don't work efficiently.


Tell that to:

DL
NW
UA
CO
AA
BA
AF
KL
IB
LH
JL
QF

Hubs are still the future.


hub environments have essentially lost their appeal and more importantly, their pricing power.

This is so untrue. Look at the yields of hub operations.


"American, Delta, Northwest, United, Alitalia, KLM, Olympic, Garuda and Malaysian all operate from major hub and spoke systems and they are all either in bankruptcy, financially distressed, struggling, merged or about to be merged."

Which are going to be merged? Since when were OA or Garuda a major hub carriers. Since when were they major carriers?
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ikramerica
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:23 am

I need a lawyer. It's like he just took all of my "bashing" posts regarding the fallacy of the A380 market and put them into one document, including purely political purchase decisions that some on these boards never want to admit.

Except he has 90 units for Japan. No way in heck. Try zero, unless airbus tailors a model specifically to their market, and then still not 90.
Of all the things to worry about... the Wookie has no pants.
 
BestWestern
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:26 am

So, as a weekly BOYD reader, this is the analyst he keeps moaning about. Very interesting.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
David_itl
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:28 am

Of course, having left Airbus in 1998, he'd know a lot that's happening currently with regards to the A380 and it's current progress. He appears to be partilcularly clueless if he thinks that Airbus will generate just 200 more orders for it over 20 years given that there are 160 orders and there are still 8 months before 1st delivery. He is thinking short-to-medium term - all long-term talk is of a trippling of passenger numbers in 20 years. If a route already supports a 777/A330, imagine what it would need in 15 years even after the 787/A350 has diluted away some of the passengers onto new routes.

I'd also love him to tell me which airlines are currently plying 125 seat 737s across the Atlantic with 125 passengers on board. I'm sure the Privatair fleet is only conifigured for 60 or fewer passengers, each paying a premium price!

David
 
Tom_EDDF
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:34 am

Well, it's a FORMER executive, and I think it's not a good habit for such people to talk about their former employers in a way that can negatively impact their sales successes. He should have spoken up earlier, but he probably waited till sales of the A380 slowed down a little bit to be more confident with raising his doubts. By that he can show his former fellow board members: "See, I always knew it will, you better would have listened to me!".

I agree with his final statement: "Only time will tell". Would be foolish to draw any conclusions from such paper coming from a guy who's not with Airbus for 8 years. He's probably in agreement with 50% of all analysts who second Boeing's market forecast, and in disagreement with the other 50% who believe in Airbus' prognosis. Not much reason for a 100+ replies thread  Smile
 
ikramerica
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:34 am

Quoting TheSonntag (Reply 5):
But Germany still only has less than 5 airports which really make sense as long-range airports, and I doubt that we will see too much fragmentation here.

Just like Japan, Germany's population is forecast to shrink by 2025. Not sure why you need to expand your available seats with a shrinking market...

Quoting Bestwestern (Reply 7):
Which are going to be merged? Since when were OA or Garuda a major hub carriers. Since when were they major carriers?

I question is choice of examples, too, but I think he was trying to find airlines that are falling apart in various regions. He also talks about BA, QF, SQ etc. in the article, so don't make it seem like he is ignoring those carriers.

BTW - your list of carriers that make hubs work effectively is not convincing, considering JL, DL, NW, CO, BA, AA and UA are all in a bad financial way, AF merged with KL to rescue it, etc.
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redflyer
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:43 am

Hi David_itl. I'm not picking on you; however, you encapsulated quite well a lot of the arguments that I suspected would follow this post. So, I'm just addressing each one. Please don't take offense.

Quoting David_itl (Reply 10):
Of course, having left Airbus in 1998, he'd know a lot that's happening currently with regards to the A380 and it's current progress.

That's true, but I'm also sure he's kept his contacts as well as ability to reach out to other resources, like any good sales person would.

Quoting David_itl (Reply 10):
He appears to be partilcularly clueless if he thinks that Airbus will generate just 200 more orders for it over 20 years given that there are 160 orders and there are still 8 months before 1st delivery

You realize the vast majority of those ~160 orders came withint the first 18 months after program launch in 2000? The orders have been a trickle ever since.

Quoting David_itl (Reply 10):
He is thinking short-to-medium term - all long-term talk is of a trippling of passenger numbers in 20 years.

That is great and, perhaps, true. But that doesn't help the 380's business case. You don't invest $12+ billion in something in the hopes that in 20 YEARS it will finally prove itself. That is what Boeing is banking on. If and when the market develops sufficiently, they will bring their own VLA to market and it will in all likelihood incorporate technologies that will leapfrog the 380, rendering it obsolete because it will incorporate technologies developed since the 380's launch.

Quoting David_itl (Reply 10):
I'd also love him to tell me which airlines are currently plying 125 seat 737s across the Atlantic with 125 passengers on board.

I don't think his point was to say "Look at all the airlines flying 125 pax a/c from the West Coast to Europe" but, rather, to say "Look at the direction that market forces (e.g., fragmentation) are leading a/c development"
A government big enough to take away a constitutionally guaranteed right is a government big enough to take away any guaranteed right. A government big enough to give you everything you need is a government big enough to take away everything you have.
 
DfwRevolution
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:44 am

I'm of the opinion that comparing WN's yield system to international long-hual hub systems proves little, if anything. Too much of WN's model is unique from the aspects of international opperations.

However, some excellent points are made:

- Airbus did lose focus on the mid-market segment allowing Boeing to effectivly shut-down the A330/A340 families.

- Airbus cannot garuntee all 747 replacement will default to the A380

- Future growth in airline traffic does not necessarily require airlines to build hubs and adopt greater units of capacity (artifical constraints)

Tollen delinates a point made by many industry analyst. The A388 is a niche product with most projections showing 300-400 sales in the next twenty years. Likely enough to amortize the RD cost and give Airbus a handsome profit, but not without toil.

Furthermore, Boeing has nailed the market with the 787. They hit with the right product and the right time. Along with the 777, they broadsided Airbus mid-market products and shut-down some of the best models Airbus has developed. This wasn't necessarily clear in 2002-2003, but it's crystal today. At this point, it's down to execution: as long as Boeing doesn't screw-up the 787 integration and performance, the 200-300 seat segement is now theirs.

The repercussions from that outcome are substantial. Boeing is in a position to charge more yield per aircraft while amortizing a greater number of sales over a lower program cost. With speculated variants like the -10X and 787F, Boeing can continue to broaden the 787's niche over the next decade. Two words: cash cow.

If Boeing doesn't get headstrong, the success of the 787 will put them in excellent position to continue offering new models. It's fair to say that BCA is back. It's also fair to say that Airbus will probably have some challenging years in the future if any additional shifts occur.
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JayinKitsap
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:48 am

I think for long distance travel flying thru one hub will still occur often. LHR, FRA, LAX, NRT, etc will still be hubs. But the fragmentation that is occurring such that the need for hub to hub flights is lessened and the number of pax on the hub to hubs is growing slower than the overall market.

WN actually uses a lot of their cities as hubs, or semi-hubs. You can't fly with them SEA-SAN direct, etc. But you can get most of the way across the country as a 1 stop.

F9 is using DIA as a hub and it is working well. Alaska uses Seattle as a hub and they are profitable.

Although not highlighted in the article, he implies that the VLA market is limited both for the 748 pax and the A380 pax. As freighters, it is another market and consideration.
 
leelaw
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:48 am

I've had lunch with Troy Tollen formerly of Pegasus Aviation a couple of times, he's the first person in the leasing industry/community who suggested I curb my initial enthusiasm for the A380. I'm glad to see he's summarized his views on the business case for the A380 in a non-proprietary document which is in the public domain.
Lex Ancilla Justitiae
 
DIA
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:49 am

Quoting Dhefty (Thread starter):
Notice he is not criticizing the plane itself, just the business case for it.

Exactly. This has been the point of many A.netters: questioning Airbuses forecast (and business model) for the A380, not the A380 itself. The forecast has always seemed ambitious to say the least...least of all conservative.
Ding! You are now free to keep supporting Frontier.
 
Ken777
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:54 am

It's going to take a long time to determine if the 380 is financially successful. I have no doubts that it is a huge engineering achievement, but there will be challenges turning that engineering success into a financial success.

The interesting part of the article for me was his feelings that Airbus got caught short on the basic twin aisle market when the 787 was released. I think he's probably right on that one and Airbus has a rather large challenge to make the 350 competitive with the 787.

We'll see over the next few years if Airbus has also neglected the single aisle future. While both A & B have limited technical resources A has focused theirs on the 380 while B was content to go with a minimal investment in the 748 - allowing it to go full speed with the 787 and, maybe Y1. If the 380 drains personnel and other resources to the point where B can get a jump start on Y1 in addition to the 787 then the 380 will indeed be a doubtful program, regardless of the sales levels it achieves over the next 10 - 20 years.
 
Lumberton
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 4:55 am

Quoting Ikramerica (Reply 8):
including purely political purchase decisions that some on these boards never want to admit.

Having an ex-Airbus Sales Executive allude to "political" orders is quite convincing, IMO. Why deny this happens? All manufacturers, including Bombardier and Embraer, will use political leverage if it secures a sale. No shame in using politics, as long as one can close the deal!
"When all is said and done, more will be said than done".
 
AeroWesty
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:04 am

"Who would have ever imagined flying from the US West Coast to Europe non-stop in a 125 seat aircraft?"

I guess he forgot that the 707 seated barely more than that in a 2-class layout, and it flew many years in that market.
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starrion
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:04 am

Well at least the flames can't be of the "He's a Boeing fan-boy" or "He doesn't know what he's talking about" variety.

Although the "Disgruntled ex-employee" might fit. Knowledgeable and angry has the potential to be embarassing.

Knowledge Replaces Fear
 
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BlueSky1976
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:09 am

Quoting TheSonntag (Reply 5):
Maybe, but FRA remains FRA, and the market for LON-SYD is not open to fragmentation.

Let's be honest: the minute a 350-seat profitable SYD-LHR plane takes to the sky, anything with more than 500 seats will be history for a looooooooong time. 747-8i is not the A380 killer. Yellowstone-3 will be the one.

Quoting Ikramerica (Reply 8):
It's like he just took all of my "bashing" posts regarding the fallacy of the A380 market and put them into one document, including purely political purchase decisions that some on these boards never want to admit.

Oh yeah? Which ones? If you're talking about AF and LH, I got news for you: the 787 purchases by JL and NH have just as much politics involved in those contracts... not to mention Vietnam and all China purchases... Politics suck - that's why I don't watch the news anymore...
The queen of the skies is dead.
 
Poitin
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:11 am

Quoting Ikramerica (Reply 8):
I need a lawyer. It's like he just took all of my "bashing" posts regarding the fallacy of the A380 market and put them into one document, including purely political purchase decisions that some on these boards never want to admit.

Yes, I am sure he cribbed all those ideas from us! Sue the SOB! hissyfit 
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ikramerica
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:16 am

Quoting David_itl (Reply 10):
Of course, having left Airbus in 1998, he'd know a lot that's happening currently with regards to the A380 and it's current progress.

yeah, I'm sure his job as an executive in the operating lease industry has left him on the outside looking in when discussing the market...  sarcastic 

funny how he was smart enough to work for airbus for 5 years, but now he's ignorant because he no longer does, despite his 4 pages being spot on to every valid argument against the A380 business case you can outline.

typical losing argument to try to tear down the person making the argument when you can't refute the argument itself. happens in politics all the time. of course, the airline industry isn't political, is it?  Wink
Of all the things to worry about... the Wookie has no pants.
 
Poitin
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:32 am

Quoting Poitin (Reply 23):
typical losing argument to try to tear down the person making the argument when you can't refute the argument itself. happens in politics all the time. of course, the airline industry isn't political, is it? Wink

Your point about attacking the man and not the message is spot on. However, while the airline industry was very political, I suspect it is becoming more and more a business-decision industry. While we still have political pressure with regard to privatizing EI, it is happening. AF is buying B777s because they are a better solution to their needs.

True, in Asia particularly, politics still dominates the thinking, but I think you will see more and more business based decisions as the price of fuel continues to escalate. Right now oil is in the $60-70 (USD) per barrel range. What happens when it is $100, or $200?

This article is that sort of thinking. Those of you who feel it is not "Politically Correct", learn to get use to it. The guys running the airlines are going to look at the bottom line and tell the politicans to buzz off.
Now so, have ye time fer a pint?
 
A342
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:44 am

Quoting Ikramerica (Reply 12):
Just like Japan, Germany's population is forecast to shrink by 2025. Not sure why you need to expand your available seats with a shrinking market...

There´s some truth in this. As the population is lowering, there is less of a business case for direct flights, hence more pax will be routed through hubs.

Additionally, carriers like LH or AF don´t only focus on domestic connecting pax, but also on such ones from abroad.


However, if the population of Germany is declining, why do pax numbers rise ?

The answer: More flights done by the population, partly because of LCCs, and a good situation in economy sectors where air travel is required. Also, believe it or not, hubs are still growing.
Exceptions confirm the rule.
 
Concorde001
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:45 am

Quoting Ikramerica (Reply 12):
BTW - your list of carriers that make hubs work effectively is not convincing, considering JL, DL, NW, CO, BA, AA and UA are all in a bad financial way, AF merged with KL to rescue it, etc.

BA or JL are nowhere near the league of some US carriers went it comes to financial woes! In financial year 2004/2005 BA was ranked as the world's most profitable after reporting full year operating profits of near £540 million (US $937 million/€787 million) - and this was achieved with a 6% operating margin! Watch out when they hopefully reach 10% by 2008!

Quoting Bestwestern (Reply 7):
Tell that to:

DL
NW
UA
CO
AA
BA
AF
KL
IB
LH
JL
QF

Hubs are still the future.

On the whole, I agree. Though removal of bilateral restrictions will mean hubs will have to change in certain ways - for example the recent open skies agreement between India and the US will have an impact in years to come on some European carriers. If more US majors begin to take advantage of the agreement and start direct services like AA's ORD-DEL and CO's EWR-DEL European carriers will see a reduction in US-India connecting traffic.
 
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PM
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:45 am

Quoting Ikramerica (Reply 12):
Just like Japan, Germany's population is forecast to shrink by 2025. Not sure why you need to expand your available seats with a shrinking market...

Surely this is a bit simplistic. The important figure is the number of flights the population is anticipated to make. In both Germany and Japan that is predicted to keep rising. There may be fewer people but they will be better off and will travel farther and more often.

Quoting Ikramerica (Reply 12):
BTW - your list of carriers that make hubs work effectively is not convincing, considering JL, DL, NW, CO, BA, AA and UA are all in a bad financial way, AF merged with KL to rescue it, etc.

You have to be consistent. If AF "rescued" KL then you have to acknowledge that it is very much a hub-based airline too.

Moreover, what is EK if not a "hub" airline? Do they have ANY flights that don't start or finish in Dubai? Are they struggling? Might the same not be said of SQ?

For what it's worth, I'm not denying that the number of hubs "out there" may be quite finite and that the A380 market may be similarly limited. But I object to people selectively taking examples to 'prove' their own bias.
 
leelaw
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:47 am

Quoting A342 (Reply 26):
Also, believe it or not, hubs are still growing.

So does cancer if you don't cut it out of the host.  Smile
Lex Ancilla Justitiae
 
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PM
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 5:57 am

Quoting Leelaw (Reply 29):
So does cancer if you don't cut it out of the host.

Er, so hubs are a "bad thing"???
 
PlaneHunter
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:05 am

Though I agree with a number of Mr. Tollen's points I'm wondering about the examples he gives for failed hub carriers. Picking Alitalia, Garuda, Malaysia, Olympic or certain US carriers doesn't prove much. There have always been a number of reasons which caused financial trouble for these airlines. The hub&spoke model alone is not the key aspect. We know well how many airlines successfully operate from large hubs.

Quoting TheSonntag (Reply 5):
Maybe it could have made more sense to build the A380 somewhat smaller, so that it would be a direct replacement to the 747s. But Germany still only has less than 5 airports which really make sense as long-range airports, and I doubt that we will see too much fragmentation here.

Ironically, the airline which has been rapidly starting new thin long-haul flights to Germany's smaller gateways is the world's largest A380 customer...

Quoting TheSonntag (Reply 5):
But despite all changes, there are routes which cannot be replaced, like FRA-SFO, and these require larger planes as the current slot-situation in FRA is not to change in the foreseeable future.

And FRA is not alone on that list. People sometimes forget that it's not an easy task to build new airports when these are required.


PH
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PM
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:10 am

@ PlaneHunter

Excellent post. Thanks.
 
Concorde001
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:15 am

Quoting PlaneHunter (Reply 31):
And FRA is not alone on that list. People sometimes forget that it's not an easy task to build new airports when these are required.

An excellent point. Why is it that LHR is planning to see such a large amount of A380s flying in? - QF, SQ, EK, MH, VS are just some that come to mind.
Also aviation analysts are all predicting massive growth in air travel. Europe has seen massive growth in air travel and the way China, India and the East in general are growing this century, perhaps the A380 is exactly what is needed?
I'm sure once the A380 comes into operation we will all found out - just sit tight and wait.
 
Poitin
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:17 am

Quoting PM (Reply 28):
Moreover, what is EK if not a "hub" airline? Do they have ANY flights that don't start or finish in Dubai? Are they struggling? Might the same not be said of SQ?

For what it's worth, I'm not denying that the number of hubs "out there" may be quite finite and that the A380 market may be similarly limited. But I object to people selectively taking examples to 'prove' their own bias.

The question is "what is a hub?" Is HKG-LHR a hub or a very large route in which the A380 is an ideal aircraft? All a matter of opinion, really. And in fact, there will be hubs forever and forever. Some because they are well suited, like EK and Dubai. Others, for other reasons. For example you might actually see DUB become a hub to and from the USA, with EI and RE focusing on nearby small cities, flying people to DUB and then beyond.

On the other hand, the medium sized cities with a population of say 1 million or larger, will see more and more direct flights. Once upon a time I had to go from Sacramento (SMF) to SFO to go to LHR to fly to DUB. Now I can go SMF to ATL to DUB by DL. Soon, I am told I can go SFO to DUB on EI. Maybe, one day, I can go SMF to DUB or SNN direct, although I doubt that.

The point is as more and more long-ranged medium and small aircraft become available, the more and more point-to-point routing will occur, and with it less and less spoke-to-hub-to-hub-to-spoke as we have had for the last 20 years.

There is no question of there being hubs. The question is how many. I submit they will rapidly decrease in importance as the A350 and B 787 become available, following a trend started by the B757, B767 and B 777, along with the A330 and A340.

As for the A380, there is a market. It is just not the 2000 airplanes in 20 years predicted by some, or even 1200, or maybe 800. Based on Todd's paper, I believe 400. You should read Todd's article with an open mind and not defensively. He does have the business case nailed.
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leelaw
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:25 am

Quoting PM (Reply 30):
Quoting Leelaw (Reply 29):
So does cancer if you don't cut it out of the host.

Er, so hubs are a "bad thing"???

Most of the airlines operating hubs in North America are in some form of financial distress, or have recently emerged therefrom. The megahubs in Europe could be a bad thing as well, here's some food for thought:

"UK study comes out in favour of 'open and unrestricted' slot trading"

"UK regulators have come out in favour of legal trading of take-off and landing slots at congested European Union airports, but are recommending that such trading should be unrestricted and made transparent in order to prevent anti-competitive behaviour by airlines.

Present EU slot-allocation rules are considered by many to be inflexible and provide little incentive to carriers to surrender legacy, or "grandfathered", slots to competitors. Proposals to reform the system are expected to emerge later this year and the European Commission sees market-based secondary slot-trading as a potential way to make slot allocation more efficient..."

"...“If airlines are able to buy, sell and lease slots this will sharpen up the opportunity cost of holding on to slots,” says the study. “It will provide them with far greater incentives to sell slots to airlines that would use them more efficiently. This should reduce current rigidities in the system and increase the opportunities to obtain slots..."

http://www.flightglobal.com/Articles...'open+and+unrestricted'+slot.html

More efficient and equitable allocation of existing slots could significantly reduce the need for very expensive and less mission flexible VLA aircraft to boost capacity out of the slot restricted airports.
Lex Ancilla Justitiae
 
Glareskin
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:29 am

Quoting Ikramerica (Reply 12):
Just like Japan, Germany's population is forecast to shrink by 2025. Not sure why you need to expand your available seats with a shrinking market...

There is no direct connection (as a rule) between the German or Japanese population decrease and the market size. There is a more likely connection between the market and the economical prospects. And IMO both countries are looking good after some slow years.

Quoting DfwRevolution (Reply 14):
I'm of the opinion that comparing WN's yield system to international long-hual hub systems proves little, if anything. Too much of WN's model is unique from the aspects of international opperations.

 checkmark 

Quoting DfwRevolution (Reply 14):
- Airbus cannot garuntee all 747 replacement will default to the A380

True, but it is likely that they will get a fair share of it. IMO it is reasonable to expect they will reach the 250 - 300 aircraft in the next 7 years. This should allow Airbus to be above break-even. The A380 is partially a prestige project. Airbus wanted to prove the (aviation) world that it is a mature player by building the new queen of the skies....

Nevertheless I do agree that Airbus appears to have neglected the medium size long-haul market. But the situation would have been different with still reasonable fuel prices. And the A350 still has good chances.
There's still a long way to go before all the alliances deserve a star...
 
scoljet
Posts: 29
Joined: Sun Feb 26, 2006 1:10 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:35 am

The A380 is firmly entrenched in aviation history and has yet to fly one revenue mile. Having said that, it is not going to achieve the sales projections that Airbus has projected. Why? It is a "niche" airplane that is going to have a hard time finding a home. The cost of preparing an existing airport must be passed on to everyone except Airbus. It's going to take an unnacceptable amount of time to deplane, and lets face it, the airplane is flat out UGLY. Who designed this thing? The nose is horrible and does not fit the rest of the plane. It is what it is and that is a double decker A330 with 2 outboard engines added for good measure. I agrree it is a tribute to Airbus that this thing does fly but come on, its the Spruce Goose of the 21st century.
 
NYC777
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:41 am

Right now the saving grace for most airlines (especially US legacies) are international routes. The only way that carriers can efficiently profit from international flying, it seems to me is more point to point flying instead of hub to point or hub to hub. This in turn will increase demand (as we have already seen) for mid capacity long range aircraft. The article is not far off the mark.
That which does not kill me makes me stronger.
 
PlaneHunter
Posts: 6537
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:44 am

Quoting Scoljet (Reply 37):
It's going to take an unnacceptable amount of time to deplane

Not if airports are equipped with appropriate gates and jetways.

Quoting Scoljet (Reply 37):
and lets face it, the airplane is flat out UGLY.

Which is totally irrelevant for airlines and passengers - well, expect for some people on this board, of course.  Wink

Quoting Scoljet (Reply 37):
Who designed this thing?

Design engineers who know a lot about aerodynamics...


PH
Nothing's worse than flying the same reg twice!
 
Poitin
Posts: 2651
Joined: Wed Jan 25, 2006 6:32 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:47 am

Quoting Scoljet (Reply 37):
t's going to take an unnacceptable amount of time to deplane, and lets face it, the airplane is flat out UGLY.

Now it is not svelte but UGLY? Come now, it is all a matter of taste! Some men like Twiggy and others like Rubenesque women.

http://www.abcgallery.com/R/rubens/rubens88.html

[Edited 2006-03-14 22:54:06]
Now so, have ye time fer a pint?
 
User avatar
yellowtail
Posts: 3938
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:49 am

Quoting BigB (Reply 1):
his one is gonna be a 100 threader by the end of the night........

Only 62 posts to go....looks like we are well on our way.....are the A.netters back with their tar and feathers yet?
When in doubt, hold on to your altitude. No-one has ever collided with the sky.
 
HS748
Posts: 621
Joined: Tue Oct 11, 2005 3:01 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:53 am

Perhaps his views can be attributed to the fact that he is the EX Airbus sales chief!
 
Poitin
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RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 6:58 am

Quoting Yellowtail (Reply 40):
Only 62 posts to go....looks like we are well on our way.....are the A.netters back with their tar and feathers yet?

To answer your question:

Quoting HS748 (Reply 42):
Perhaps his views can be attributed to the fact that he is the EX Airbus sales chief!

I think so!  Big grin
Now so, have ye time fer a pint?
 
TheSonntag
Posts: 4439
Joined: Wed Jun 15, 2005 7:23 pm

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:00 am

And don't forget, while Germany's population might decrease (a fall from today's 80 million towards 60 million in 2050 if I remember it right), there will be many more people to come here to do business, especially from China, and this will go both ways.

Already today, we see more and more Chinese tourists since the visa requirements were lowered. There are a lot of Japanese tourists, as well, who have come here for decades. Many of these are flying via HKG, so the demand into this direction will increase. The same could apply for India, as well.

Don't forget, Airbus built the A380 with Asia in mind, so this is an interesting market.

While one could say that there is no difference on where you fly in "Schengen country", people fly where the infrastructure is best. The hubs have the best infrastructure, and it is not possible to expand them easily, as neither FRA, LHR or other airports are comparable to, lets say, Denver. The slot problems will remain for many years to come, so bigger planes will be needed.
 
IFEMaster
Posts: 4164
Joined: Tue Feb 21, 2006 5:17 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:03 am

Quoting HS748 (Reply 42):
Perhaps his views can be attributed to the fact that he is the EX Airbus sales chief!

Bingo. It's called axe grinding. Bridge burning.

As Bestwestern and David_itl and others have pointed out, his 'analysis' is wrong on so many levels. He comes across as nothing more than a bitter ex-chief.
Delivering Anecdotes of Dubious Relevance Since 1978
 
DAYflyer
Posts: 3546
Joined: Wed Sep 08, 2004 9:35 pm

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:03 am

Now that the Airbus pundits have spoken about how he is a former executive and all that, he has the proper perspective on this situation. I have to concur with his assesment since he:

-knows the aircraft market
-Knows the airlines
-understands the trends

Also, you do not need to be a rocket scientist to see that this airplane only makes sense in high density markets like FRA and Heathrow where slot restrictions are commonplace.

The 747, which the A-380 was meant to replace, may be the eventual profit-killer of the A-380 program......
One Nation Under God
 
BR076
Posts: 1032
Joined: Mon May 02, 2005 4:10 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:06 am

Quoting TheSonntag (Reply 44):
Don't forget, Airbus built the A380 with Asia in mind, so this is an interesting market.

excactly , the whole world isn't US

Population Clocks
U.S. 298,301,284
World 6,503,447,700
22:04 GMT (EST+5) Mar 14, 2006
ú
 
User avatar
yellowtail
Posts: 3938
Joined: Fri Jun 17, 2005 3:46 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:18 am

Quoting DAYflyer (Reply 46):
The 747, which the A-380 was meant to replace, may be the eventual profit-killer of the A-380 program......

Maybe not hte profit killer....but definitely the party spoiler.
When in doubt, hold on to your altitude. No-one has ever collided with the sky.
 
NYC777
Posts: 5103
Joined: Wed Jun 09, 2004 3:00 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:21 am

Quoting BR076 (Reply 47):
excactly , the whole world isn't US

Population Clocks
U.S. 298,301,284
World 6,503,447,700
22:04 GMT (EST+5) Mar 14, 2006

Whoever said on this thread that it is? The point of the article is that market fragmentation is gong to obviate the need for 1200 A380s, even in Asia.
That which does not kill me makes me stronger.
 
Kangar
Posts: 362
Joined: Fri Feb 04, 2000 8:11 pm

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:22 am

My god, an ex employee disagrees with his former colleagues about something - well I never....
 
andessmf
Posts: 5689
Joined: Wed Jan 25, 2006 8:53 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:47 am

Is he saying that the A380 will fail? No
Is he saying that the A380 is not a technolgical marvel? No
Is he saying that there is no need for an A380? No
Is he saying there wont be hub-to-hub flying? No

The only thing in dispute is the number of airplanes to be sold.

There is a need for the A380, I have not seen many dispute that. The only remaining question is how many will sell, and that no one here can know.
 
rolfen
Posts: 1539
Joined: Tue Jan 17, 2006 6:03 am

RE: Ex-Airbus Sales Chief Rips A380 Forecasts

Wed Mar 15, 2006 7:52 am

Market fragmentation is probably a true phenomenon, but do we know where it will stop? I personally dont believe that this will dramatically reshape the airline industry. There will always be a big flow of people wanting to move between 2 cities, like, say, Paris and New York.
rolf

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