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fraport
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EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 4:11 pm

German newspaper Financial Times Deutschland states that the A350 program may be questioned due to the delays of the A380 and its financial consequences for Airbus. EADS-Boss Enders said if the A350 faces similiar problems as the A380 currently does, it could mean the possible end for Airbus. That is why Airbus has to carefully examine the decision to build the A350. Asked if Airbus could stop the A350 program, Enders responded: "I cannot rule that out".

Link in German:

http://www.ftd.de/unternehmen/industrie/119044.html

[Edited 2006-10-05 09:12:33]
 
bringiton
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 4:14 pm

Well that is hardly surprising , because they are looking at the posibilities so they could have alternatives on the table and are weighing them as we speek!!
 
astuteman
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 4:24 pm

Quoting Fraport (Thread starter):

That wording makes more sense than "Airbus are stopping the A350!"

Thanks Fraport.

As I said on an earlier thread, the crucial thing the A380 HAS to provide is a clear direction on the business processes that WILL work on the A350.

I actually see this as a bigger stumbling block for the A350 than the much-discussed cash squeeze.
You can bet your A** that nobody will throw money at the A350 until this is demonstrably sorted.
You can also bet your A** that once it is demonstrably sorted, the money for the A350 will be found.

Regards
 
notdownnlocked
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 4:24 pm

From what I have seen here at a.net, there can be never be an end to Airbus as the involved governments will merely strip the pockets of their respective taxpayers even more than before and those being stripped will only smile with pride even though their money is being sent down a black hole. Alas as I have family on both sides of the ocean in Germany, France and in the USA and there are many cultural differences.
 
NAV20
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 4:24 pm

Quoting Fraport (Thread starter):
EADS-Boss Enders said if the A350 faces similiar problems as the A380 currently does, it could mean the possible end for Airbus.

On the other hand, if they have no products to sell other than A380s and A320s, they will be leaving the most profitable 'sweet spot' of the market - mid-sized widebodies - to the tender mercies of Boeing. Which would surely be 'the possible end for Airbus' as well?

Can't help feeling that Enders, Streiff and the others are having to work with one hand tied behind their backs - because the political imperative is, "Whatever you do, don't even TALK about cancelling the A380."

I also wonder whether they're 'going quiet' on the A350XWB because the market reaction their salesmen are encountering is that most airlines expect to be happy for a long time with the 777/787 combination most of them already have on order?
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
Johnny
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 4:44 pm

@NAV20
"I also wonder whether they're 'going quiet' on the A350XWB because the market reaction their salesmen are encountering is that most airlines expect to be happy for a long time with the 777/787 combination most of them already have on order?"

Tell that SQ... Wink
 
kappel
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 5:16 pm

Quoting NAV20 (Reply 4):
Can't help feeling that Enders, Streiff and the others are having to work with one hand tied behind their backs - because the political imperative is, "Whatever you do, don't even TALK about cancelling the A380."

They are WAY past the point of no return on the a380 IMHO. Cancelling will result in over $10bln in money down the tube. Going forward with it is the only way to recoup some money. Granted, the project is now also beyond the point it can ever make any money for them, but at least they can reduce losses. And ceding the midsize market to Boeing would be very stupid. They would almost have to start from scratch like in the 1960's.
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astuteman
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 5:22 pm

Quoting Kappel (Reply 6):
They are WAY past the point of no return on the a380 IMHO. Cancelling will result in over $10bln in money down the tube. Going forward with it is the only way to recoup some money. Granted, the project is now also beyond the point it can ever make any money for them, but at least they can reduce losses. And ceding the midsize market to Boeing would be very stupid. They would almost have to start from scratch like in the 1960's.

Absolutely totally correct, Kappel - in every way  Smile
I think the penalty for cancelling is higher than $10Bn......there's an awful lot of company overhead cost cover built into that A380 sale price (profitable or otherwise) that the other programmes will HAVE to pick up if the A380's are cancelled.
People don't seem to see it somehow.

Regards
 
Beaucaire
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 6:38 pm

What Streiff is doing is called a shock-therapy,ending hidden delays,unstustained claims and exaggerated hopes,politically motivated split-manufacturing and prestigious programs .
Airbus has to go back to sound and reliable manufacturing practice coupled with kept delivery promises.
The way will be painful but at the end the company will be much stronger than before.The last thing Boeing should do is jubilate,since nobody knows how much problems the 787 will encounter...
Please respect animals - don't eat them...
 
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autothrust
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 6:58 pm

Quoting Beaucaire (Reply 8):
What Streiff is doing is called a shock-therapy,ending hidden delays,unstustained claims and exaggerated hopes,politically motivated split-manufacturing and prestigious programs .
Airbus has to go back to sound and reliable manufacturing practice coupled with kept delivery promises.
The way will be painful but at the end the company will be much stronger than before.

Great post, i totally agree with you.
IMO Airbus needs the A350 urgently.

They need products to concurr against the 787 and 777. The A350 would do both wich is a smart solution.
Cancelling it would be a big mistake. Sure there are maybe not a lot resources however they cant just remain on the A320 and A330.
Good this and next year Airbus will deliver more then 430 planes wich will generate a good cash.
That situation reminds me when Boeing did the 747 wich almost ended with same financial problems.

[Edited 2006-10-05 12:01:57]
Flown on: DC-9, MD-80, Fokker 100, Bae 146 Avro, Boeing 737-300, 737-400, 747-200, 747-300,747-400, 787-9, Airbus A310, A319, A320, A321, A330-200,A330-300, A340-313, A380, Bombardier CSeries 100/300, CRJ700ER/CRJ900, Embraer 190.
 
Lumberton
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RE: EADS-Enders: Stop Of A350 Program Not Impossib

Thu Oct 05, 2006 7:12 pm

Quoting Beaucaire (Reply 8):
What Streiff is doing is called a shock-therapy

Could it be that the company is attempting to portray this in crisis in very stark terms so as to get support for the painful cuts ahead? The initial reception to the restructuring plans from the politicians and union officials wasn't positive.
"When all is said and done, more will be said than done".
 
co7772wuh
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 7:23 pm

Quoting NAV20 (Reply 4):
Quoting Fraport (Thread starter):
EADS-Boss Enders said if the A350 faces similiar problems as the A380 currently does, it could mean the possible end for Airbus.

On the other hand, if they have no products to sell other than A380s and A320s, they will be leaving the most profitable 'sweet spot' of the market - mid-sized widebodies - to the tender mercies of Boeing. Which would surely be 'the possible end for Airbus' as well?

Can't help feeling that Enders, Streiff and the others are having to work with one hand tied behind their backs - because the political imperative is, "Whatever you do, don't even TALK about cancelling the A380."

Simply put ,
They're screwed either way !

Airbus may not have a the mid-size market due to the a38o delays & no or late EIS for the a32o replacement because of lack of revenue .

But at least Airbus will have to world's largest airline .
 
PlaneHunter
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 7:37 pm

Quoting Co7772wuh (Reply 11):
But at least Airbus will have to world's largest airline .

What?


PH
Nothing's worse than flying the same reg twice!
 
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keesje
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 7:59 pm

Read between the lines

- Boss of Airbus (french) suggests to close a Hamburg A380 factory
- EADS boss (german) suggests to stop A350 development (threatens Toulouse WB line)

the elephants are dancing..
"Never mistake motion for action." Ernest Hemingway
 
Aither
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:06 pm

Quoting Notdownnlocked (Reply 3):
From what I have seen here at a.net, there can be never be an end to Airbus as the involved governments will merely strip the pockets of their respective taxpayers even more than before and those being stripped will only smile with pride even though their money is being sent down a black hole. Alas as I have family on both sides of the ocean in Germany, France and in the USA and there are many cultural differences.

From what I have seen here at a.net, many Americans know nothing about Europe except what they watch on Fox News.

You have state owned companies managed like state runned companies and vice versa. In the end it's all about good or bad management.
And don't tell me Boeing never influence/is influences by politics.
Never trust the obvious
 
kellmark
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:32 pm

Quoting Aither (Reply 14):
From what I have seen here at a.net, many Americans know nothing about Europe except what they watch on Fox News.

Seems like you only get your info about America from the BBC.

Quoting Aither (Reply 14):
You have state owned companies managed like state runned companies and vice versa. In the end it's all about good or bad management.
And don't tell me Boeing never influence/is influences by politics.

Yes Boeing gets into politics, but it gets absoulutely no free handouts or guarantees against risky decisions and is not run by a couple of governments as a jobs program like Airbus is. When Boeing comes up on hard times, they lay off tens of thousands.

If Airbus is not allowed to restructure, these kinds of problems will happen again and again. It needs to act like a real private company with no government interference. But won't be able to under the present situation. But it appears that the new management has recognized the problem, but nobody wants to bite the bullet to make it happen.
 
wjcandee
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:36 pm

Quoting Beaucaire (Reply 8):
The last thing Boeing should do is jubilate,since nobody knows how much problems the 787 will encounter...

Boeing isn't jubilating. They're just saying, in effect, "Airbus are a great company; they'll get past this."

That's because, in politics, "losers spin, winners grin".
 
ebbuk
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:49 pm

Quoting NAV20 (Reply 4):
On the other hand, if they have no products to sell other than A380s and A320s, they will be leaving the most profitable 'sweet spot' of the market - mid-sized widebodies - to the tender mercies of Boeing. Which would surely be 'the possible end for Airbus' as well?

Yes possibly

Quoting NAV20 (Reply 4):
Can't help feeling that Enders, Streiff and the others are having to work with one hand tied behind their backs - because the political imperative is, "Whatever you do, don't even TALK about cancelling the A380."

Again possibly. No one's ever asked Streiff if he would have given the go-ahead for the 380 if he was in power, have they? What do you think he would say? (Hold-ups notwithstanding)

Quoting NAV20 (Reply 4):
I also wonder whether they're 'going quiet' on the A350XWB because the market reaction their salesmen are encountering is that most airlines expect to be happy for a long time with the 777/787 combination most of them already have on order?

Well again could be. So do they go for it or stay out? What about the customers saying we need more than just a CG plane before we even let you in the door?

Quoting Keesje (Reply 13):
Read between the lines

- Boss of Airbus (french) suggests to close a Hamburg A380 factory
- EADS boss (german) suggests to stop A350 development (threatens Toulouse WB line)

the elephants are dancing..

It's going to take some time for the message to get through to thick elephants heads, me thinks. Disheartening.
 
wingman
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:56 pm

Neither EADS nor Boeing are going to dissolve due to bankruptcy in the next 20 years. If the US government is willing to save a third rate automobile company, you can bet your house they'd save the country's number one exporter.
 
parapente
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:57 pm

The problems for Airbus are simply the differences between their marketing abilities and their manufacturing abilities. The A340-600 sized market was exactly right.Indeed their timing was exactly right. The end product was not. (compared to the 777-300er) It has been a disaster of enormous proportions.Enough in itself to sink any normal company. The A380 is (I believe) again exactly the right product at exactly the right time. Great order book with Boeing revising their forcasts and stretching the old Jumbo as far as they dare. However it looks like the engineers have shot Airbus in the foot again! ( a second one they will not survive-they have to get this right). All the while the 800 just gets quiretly better. Its not what the airlines want (look at sales) but if it turns out to be better (again) then that it folks!
 
Aither
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 8:58 pm

Quoting Kellmark (Reply 15):
Yes Boeing gets into politics, but it gets absoulutely no free handouts or guarantees against risky decisions and is not run by a couple of governments as a jobs program like Airbus is. When Boeing comes up on hard times, they lay off tens of thousands.

If Airbus is not allowed to restructure, these kinds of problems will happen again and again. It needs to act like a real private company with no government interference. But won't be able to under the present situation. But it appears that the new management has recognized the problem, but nobody wants to bite the bullet to make it happen.

Do you know Airbus history ? how it was founded ? from which companies ?
Do you know the size of Airbus ? its industrial capacity ?
What tells you Airbus is not allowed to restructure ? do you have any evidence of that ?
The fact that some parts of a single program are made in different countries is quite comme common nowadays. The success or failure or such organisation has more to do with management abilities than politics.
Never trust the obvious
 
astuteman
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 9:16 pm

Quoting Kellmark (Reply 15):
and is not run by a couple of governments as a jobs program like Airbus is

In response to that, I'd just like to say that when I've interacted with the operational engineers and builders that work for Airbus, they've come across as highly motivated, highly professional, high quality engineers, and in that respect every bit the same as their Boeing counterparts.

Characterising Airbus as a "Government-run Jobs Programme" just because there is some government input does those fine individuals a great disservice IMO.
It's too glib, easy, and in no way represents the work ethic, culture, or achievements of the Airbus people that I've met.

Quoting Kellmark (Reply 15):
If Airbus is not allowed to restructure, these kinds of problems will happen again and again. It needs to act like a real private company with no government interference

That said, to balance things out, I totally and unreservedly agree with this statement. Government interference is quite capable of taking the efforts of those fine individuals and turning it into dust.

Which would be a great shame, and must not be allowed to happen.

Fair?  Smile

Regards
 
Lumberton
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 9:32 pm

One can't help wondering what the A350 customers are thinking when they read all this? QR has at least hedge their bets with their large 777 order, and a possible purchase of 20 more. What about the likes of Air Europa (2004?), TAM, TAP, US Airways, et al, who placed their confidence in Airbus? I keep hearing the word "compensation" now being associated with the A350 program, but this isn't the way forward.

Any bets on A350 defections?
"When all is said and done, more will be said than done".
 
travelin man
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 9:37 pm

According to today's European edition of the Wall Street Journal, Airbus could be facing around 500 million Euros penalties for the delay of the A350 program (sorry, I don't have a link to the article). It stated some analysts said the penalties could go as high as 2 Billion.
 
spartanmjf
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 9:38 pm

Quoting Wingman (Reply 18):
Neither EADS nor Boeing are going to dissolve due to bankruptcy in the next 20 years. If the US government is willing to save a third rate automobile company, you can bet your house they'd save the country's number one exporter.

I am not sure that is the case. Chrysler was a different entity at a different time in a different economy, and Boeing does not employ as many as Chrysler and its suppliers did in 1979. Having said that however, Boeing and Airbus are in unusual positions because of their respective roles and competitors.

No true investor-owned company is guaranteed survival - Barings and Rover in the UK are prime examples.

In the case of Boeing, we have the world's largest defense and aerospace company, and several players that used to be in the market are no longer there.

In the case of Airbus, we have seen that the French government is effectively willing to subsidize just about anything.

The really interesting scenario [for me] is the future of the Russian aerospace industry. There are at least two 'world class' players [Tupolev and Ilyushin] with a depth of experience - what they are lacking in technology they have some compensation for in talent. If one of these organizations teams up with a western comapny [BAE, Lockheed Martin, Northrop, etc] which can bring contemporary processes and capabilities to their passenger aircraft talent pool, then I think we could actually see a third highly competitive player in the industry.

The 787 and the latest variation of the proposed 350 are different aircraft that cover both ends of the mid-sized market. The potential of Airbus not pursuing this market should indicate that there is a depth of problem in the organization that goes beyond the issues with the 380.

Airbus/EADS needs to be a truly private company free of government control if it is to shake off all of this baggage and move forward. The market has shown that it can sustain at least to commercial manufacturers, and that same market will help guide Airbus/EADS to where it needs to be structurally and operationally.
"Nuts to the man in 21D!"
 
slz396
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 9:49 pm

Although we are quite far off from the original topic, allow me to continue a bit on what has been said so far...

Quoting Beaucaire (Reply 8):

What Mr. Streiff is doing is called a shock-therapy, ending hidden delays, unstustained claims and exaggerated hopes, politically motivated split-manufacturing and prestigious programs...

Mr. Streiff is doing exactly what is expected from him, notably clean out all the closets for once and for all. It is the best way for him to quickly gain confidence as CEO from all stakeholders and it will also allow for the fastest recovery of the company.

Quoting Beaucaire (Reply 8):

The way will be painful but at the end the company will be much stronger than before.



What Mr. Streiff is doing now is to complete the merger of the different civil aviation entities of EADS -which until now still pretty much existed as independent and separate national entities like before- into one unified company under the umbrella of Airbus SAS. Obviously this should have been done right after the creation of EADS, but as one sees often with such mega-mergers, it takes some sort of internal operating crisis first too fully set it through on all levels.

Apart from the cost savings this industrial restructuring will generate over time, the Power8 plan also plans considerable additional savings in the outsourced departments, notably the notorious wild-grow of very lucrative consultancy contracts Airbus SAS has always had (and which haven't protected nor helped much) as well as some logic efficiency improvements in production: concentration of production sites as well as less sub-contractors for instance.

Finally, with the Power8 plan also calling to boost production output to generate more cash flow, all jobs in production at Airbus are assured -dixit Mr Streiff- although staff could find themselves working on different models than they do now. (clear hint the A320 and A380 might indeed be relocated?)

Quoting Beaucaire (Reply 8):
The last thing Boeing should do is jubilate, since nobody knows how much problems the 787 will encounter....

Regardless of any 787 problems, I think the management at Boeing is more than aware it is NEVER good news when your nearest competitor embarks on an ambitious plan to completely overhaul the way it operates and plans to cut operating costs by not less than 30%, while productivity will be increased by 20%. Boeing is a well-run company too, so I don't expect them to be as naive as to jubilate over this, quite on the contrary. Expect them to keep a close eye on what exactly Airbus and EADS are going to change to their structures to be able to react to it asap.

Quoting Wjcandee (Reply 16):
Boeing isn't jubilating. They're just saying, in effect, "Airbus are a great company; they'll get past this."

Very business-like answer indeed.

Quoting Astuteman (Reply 21):
Government interference is quite capable of taking the efforts of those fine individuals and turning it into dust.

I know it is totally not done on this site, but government involvement in the restructuring of the company could also be a good thing as it will guarantee a soft landing for those employees affected by the Power8 plan through mechanisms of state-sponsored early retirement for instance, which will allow Airbus to reduce their workforce WITHOUT having to lay anybody off.
 
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Dalavia
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 9:51 pm

Quoting Spartanmjf (Reply 24):
If one of these organizations teams up with a western comapny [BAE, Lockheed Martin, Northrop, etc] which can bring contemporary processes and capabilities to their passenger aircraft talent pool, then I think we could actually see a third highly competitive player in the industry.

I agree - there is a huge opportunity waiting here for some entrepreneurial Russians, Chinese and Brazilians.
 
kappel
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:05 pm

Quoting Slz396 (Reply 25):
best way for him to quickly gain confidence as CEO from all stakeholders

And more important, the customers (airlines) who are fed up with Airbus not telling them the truth, or anything, until it is too late. They demand full disclosure, and are getting it, even though it's not pretty.

Quoting Slz396 (Reply 25):
I don't expect them to be as naive as to jubilate over this, quite on the contrary.

Indeed, they have been in trouble themselves for a while, so they know how painful the situation can be

Quoting EbbUK (Reply 17):
No one's ever asked Streiff if he would have given the go-ahead for the 380 if he was in power, have they? What do you think he would say?

That's a moot point anyway. The a380 is here whether he likes it or not, and it needs to be put into service ASAP. Unfortunately ASAP means 2007/2008.

Quoting Parapente (Reply 19):
The problems for Airbus are simply the differences between their marketing abilities and their manufacturing abilities. The A340-600 sized market was exactly right.Indeed their timing was exactly right. The end product was not.

The product was fine at 2000 oil prices. It was selling great, because it was cheaper than the 773 and that offset the higher fuel burn. That disappeared with the rise in oil prices. Granted, they should have gone with a wider body and a twin back then, but they wanted to retain commonality with the a343 and a330, so settled on this low cost approach. Perhaps also because of the a380 program?

Quoting NAV20 (Reply 4):
I also wonder whether they're 'going quiet' on the A350XWB because the market reaction their salesmen are encountering is that most airlines expect to be happy for a long time with the 777/787 combination most of them already have on order?

Or maybe because all the announcements are being held with the industrial launch, hopefully still this month? You know how Airbus likes to come out with their big guns all at once.
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worldtraveler
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:07 pm

Quoting Parapente (Reply 19):
The A380 is (I believe) again exactly the right product at exactly the right time.

The 380 was a niche aircraft that had to be executed completely right in order to win in the market. Airbus is failing at the execution and the repercussions could be enormous.

It is absolutely a shame that Airbus has bet the company on a plane that may set the company back by decades. There was a book called "The Sporty Game" that was written decades about development of the 1st generation of widebodies. In the end, Lockheed got out of the commercial airplane business and McDonnell Douglas never developed an all-new airplane again. The 747 went on to become the queen of airlines around the world - and is still being built. The stakes for Airbus are enormous both now and for decades to come.

Quoting Slz396 (Reply 25):
Boeing is a well-run company too, so I don't expect them to be as naive as to jubilate over this, quite on the contrary. Expect them to keep a close eye on what exactly Airbus and EADS are going to change to their structures to be able to react to it asap

Boeing sure won't discount what Airbus is doing but remember Airbus is doing all of this in order to slow the flow of red ink and to keep the company from completely failing. In the meantime, Boeing will move on with developing new airplanes and set itself farther ahead of the competition.
 
jacobin777
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:14 pm

Everyone is sounding the alarm bells...I think Airbus/EADS Management are letting politicians know what the score is..

Airbus has a backlog of 2100 planes..they aren't going out of business anytime soon.. Smile
"Up the Irons!"
 
jush
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:19 pm

Were do they get any money from?
As the A380 is a grave for billions of Euros the only money comes from A320 and 330 sales. Won't count the A340s in.
So I think this is hardly enough money for problems Airbus is facing. Even though the A350 might be expensive to develop they gotta do it to overcome their crisis because at this point I don't think the 380 is turning into a cash cow ever.

Regds
jush
There is one problem with airbus. Though their products are engineering marvels they lack passion, completely.
 
NAV20
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:27 pm

Quoting Jacobin777 (Reply 29):
Airbus has a backlog of 2100 planes..they aren't going out of business anytime soon..

Agreed - and it's refreshing that their press releases are much more frank and informative now. But a' propos of that, there's one paragraph in the latest one that's worth noting:-

"Airbus will this year deliver around 430 aircraft, the highest ever, with a plan to deliver even more next year. It currently has an order-book of some 2,100 aircraft, filling the production lines for the next 4.5 years. The measures here-above should allow Airbus to even better satisfy its customers and be even more competitive."

Four-and-a-half years; say up to 2011. Airbus had better start getting in a better flow of orders for their existing model range pretty soon; otherwise there'll be a highly-uncomfortable gap between the backlog running out and the A350XWB starting production.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
sabenapilot
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:45 pm

Quoting NAV20 (Reply 32):
Four-and-a-half years; say up to 2011. Airbus had better start getting in a better flow of orders for their existing model range pretty soon; otherwise there'll be a highly-uncomfortable gap between the backlog running out and the A350XWB starting production.

Don't forget that as backlog decreases, so does the time between order and delivery.

As Boeing is demonstrating this year with their 737, being able to deliver more than one year sooner than the A320 DOES constitute an important advantage.

This shorter delivery period is what Airbus ment with 'to even better satisfy its customers'.
 
AirSpare
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 10:49 pm

Quoting Lumberton (Reply 22):
Any bets on A350 defections?

Interesting speculation. TAM has 6 (or 7?) 777s arriving with an existing order for the old all new A350 on order.

Could you imagine TAM with an all A fleet making a further 777 order? Now, with A speculating on a XWB becoming a non event, they may be thr first to go.

TAM has never mentioned their 350 order, then quietly leased the T7s.

787s for TAM on the horizon?
Get someone else for your hero worship fetish
 
F4N
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RE: EADS-Enders: Stop Of A350 Program Not Impossib

Thu Oct 05, 2006 11:25 pm

Quoting Kappel (Reply 6):
They are WAY past the point of no return on the a380 IMHO. Cancelling will result in over $10bln in money down the tube. Going forward with it is the only way to recoup some money. Granted, the project is now also beyond the point it can ever make any money for them, but at least they can reduce losses. And ceding the midsize market to Boeing would be very stupid. They would almost have to start from scratch like in the 1960's.

Kappel:

Excellent point. I've been away from the board here for some time now and am only catching up on the "A380 disaster" threads. While the lack of corporate governance & program management is incredible, do people not realize what is at stake for Airbus with A380? Cancelling it, even putting the billions invested aside for the moment, would essentially eliminate any credibility Airbus has as an organization in the business world. They may as well close up shop.

Quoting Astuteman (Reply 2):
As I said on an earlier thread, the crucial thing the A380 HAS to provide is a clear direction on the business processes that WILL work on the A350.

Astuteman:

Quite correct. Until such is demonstrably in place, it will be very difficult for Airbus to convince anyone about the viability of A350 as a program.

Quoting Sabenapilot (Reply 33):
This shorter delivery period is what Airbus ment with 'to even better satisfy its customers'.

Sabenapilot:

Unfortunately, Airbus does not have much else to offer at the moment. While improving delivery times , reducing costs and increasing value represent incremental improvements that all organizations should strive for to remain competitive, they are, in this instance IMO, PR sops intended to appear proactive. They really do not address the structural, technical, cultural and political problems Airbus has that have gotten them at this low ebb in the first place.

regards,

F4N
 
ebbuk
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 11:28 pm

Quoting Spartanmjf (Reply 24):
Airbus/EADS needs to be a truly private company free of government control if it is to shake off all of this baggage and move forward. The market has shown that it can sustain at least to commercial manufacturers, and that same market will help guide Airbus/EADS to where it needs to be structurally and operationally.

don't know. A did a great job getting to number one for the past 2 years without being private. It's not the be all and end all, as Airbus have demonstrated.

Quoting Sabenapilot (Reply 33):
Don't forget that as backlog decreases, so does the time between order and delivery.

As Boeing is demonstrating this year with their 737, being able to deliver more than one year sooner than the A320 DOES constitute an important advantage.

This shorter delivery period is what Airbus ment with 'to even better satisfy its customers'.

Great point Sabena. It's like the F1 Chinese Grand Prix last week, where the changing conditions favoured one tyre manufacturer then the other over the course of the race n'est pas? What a race!
 
windshear
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 11:48 pm

This looks to be a very very bad situation for Airbus...
Just thinking about Foregeard, he has always come across to me as arrogant, and the abrubt way of which he departed the firm, tells me that he left Airbus in a very poor condition.

The A350 was launched after Noel arrogantly told the press, that their A332 was a succesful and potent rival to the B787 program... Despite of that, Airbus launched the A350 program.

It is like Airbus' heart is not in the project, and I can understand why they'd want to at least considder focussing on their A380.

Best of luck to EADS- Airbus.

Boaz.
"If you believe breaking is possible, believe in fixing also"-Rebbe Nachman
 
halls120
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Thu Oct 05, 2006 11:55 pm

Quoting Astuteman (Reply 21):
In response to that, I'd just like to say that when I've interacted with the operational engineers and builders that work for Airbus, they've come across as highly motivated, highly professional, high quality engineers, and in that respect every bit the same as their Boeing counterparts.

Characterising Airbus as a "Government-run Jobs Programme" just because there is some government input does those fine individuals a great disservice IMO.
It's too glib, easy, and in no way represents the work ethic, culture, or achievements of the Airbus people that I've met.

Agree. I don't think it's fair to call Airbus a "jobs programme." You want to see what that really looks like, come take a look at the District of Colombia government and schools.  Smile

Airbus has produced excellent products over the years, and those products came from the talented engineers and designers whose jobs are at some risk now thanks to some boneheaded management decisions.

Quoting Astuteman (Reply 21):
Quoting Kellmark (Reply 15):
If Airbus is not allowed to restructure, these kinds of problems will happen again and again. It needs to act like a real private company with no government interference

That said, to balance things out, I totally and unreservedly agree with this statement. Government interference is quite capable of taking the efforts of those fine individuals and turning it into dust.

Which would be a great shame, and must not be allowed to happen.

Agree again. While government control may be the right choice for many services, when you talk about building something as complicated as aircraft, the last thing you want is management by government committee.
"Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself." Mark Twain, a Biography
 
jdevora
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RE: EADS-Enders: Stop Of A350 Program Not Impossib

Fri Oct 06, 2006 1:06 am

Quoting DAYflyer (Reply 31):
But all we know is what we hear from Fox news. Which by the way, is far superior to anything that the Communist News Network (CNN) puts out.

Sorry for the off-topic, but it is funny, the CNN is considered part of the "hard core" US outside of the States, looks like everyhing depends of the point of view  Wink
 
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Stitch
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:19 am

I cannot believe Airbus will kill the A350XWB program, but I would not be surprised if they delayed it a few years to ensure the finances and processes are in place to ensure successful program execution.

The A330 is not going to stop selling in the face of the 787 no more then the 767 stopped selling in the face of the A330. Yes, the 787 will enjoy stronger sales (as the A332 did), but if the GEnx-1A72 and Trent 1700 programs can be brought to fruition, that would help keep the line going, as well as offer a re-engine program for existing A330s which may "tide over" those customers. Heck, if you could fit either under an A343, it might even keep those planes in the air.

Yes, the 777 program will get a breather, and if Airbus has to deeply discount A330s and A340s to sell them in the face of stronger Boeing offerings, that is going to hurt their cash-flow. But the A320E program should help and, heck, Airbus can keep the TLS line going even after Hamburg's second line is operational to increase availability and try and put the hurt on the 737NG program to keep the dollars coming in.
 
BoomBoom
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:21 am

Quoting Johnny (Reply 5):
Tell that SQ...

I'm sure they are reconsidering that commitment in light of the most recent developments.
Our eyes are open, our eyes are open--wide, wide, wide...
 
airfrnt
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:25 am

Quoting Fraport (Thread starter):
German newspaper Financial Times Deutschland states that the A350 program may be questioned due to the delays of the A380 and its financial consequences for Airbus. EADS-Boss Enders said if the A350 faces similiar problems as the A380 currently does, it could mean the possible end for Airbus. That is why Airbus has to carefully examine the decision to build the A350. Asked if Airbus could stop the A350 program, Enders responded: "I cannot rule that out".

This statement will effectively freeze Airbus's sales force on selling the A350 between now and whenever a new green light is issued. It's going to communicate to the A380 clients that they are serious, but to the A350 that they are not.

Quoting Astuteman (Reply 2):

As I said on an earlier thread, the crucial thing the A380 HAS to provide is a clear direction on the business processes that WILL work on the A350.

Absolutely. But that change is going to take two years to accomplish, and is extremely aggressive. Changing the management structures after the plane has started will have negative impacts on morale (as people are shuffled in and out of management), efficiency and cost structure.

Can Airbus afford to wait two years? Is the risk of loosing a generational change worth it?

I don't honestly know the answer to this.

Quoting Astuteman (Reply 2):
I actually see this as a bigger stumbling block for the A350 than the much-discussed cash squeeze.
You can bet your A** that nobody will throw money at the A350 until this is demonstrably sorted.
You can also bet your A** that once it is demonstrably sorted, the money for the A350 will be found.

Even if the 787 has 800 orders and the refreshment cycle is done by the time the A350 would enter service?
 
Lumberton
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:30 am

Quoting AirFrnt (Reply 45):
This statement will effectively freeze Airbus's sales force on selling the A350 between now and whenever a new green light is issued.

I agree that this could have a chilling effect on new A350 business, as well as cause existing "customers" to re-think the whole thing. As I asked earlier, who could be the first?
"When all is said and done, more will be said than done".
 
airfrnt
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:31 am

Quoting NAV20 (Reply 4):

On the other hand, if they have no products to sell other than A380s and A320s, they will be leaving the most profitable 'sweet spot' of the market - mid-sized widebodies - to the tender mercies of Boeing. Which would surely be 'the possible end for Airbus' as well?

Not really, but it would definitely put them at risk for a while. I could see them going back to the A330 lite program to try and jazz it up a bit as a stopgap as well.

I think it was mariner who first noted that the A330 as a stop gap may be much more effective, and cost much less then the A350. Airbus had better hope he is right if they go that route.

Quoting NAV20 (Reply 4):

Can't help feeling that Enders, Streiff and the others are having to work with one hand tied behind their backs - because the political imperative is, "Whatever you do, don't even TALK about cancelling the A380."

They don't have a choice. The A380 has become very quickly a "bet the company" decision after the fact. Airbus is on the hook right now for $19-21 billion dollars (depending on accounting). Canceling it outright would leave airbus with debts two or three times greater then their market capitalization. With that kind of risk, there is zero chance that Airbus would be able to raise money in the free market to develop new planes.

I know that there is a contingent of people who believe that the only response to the A380 programs is to cancel it outright, but Airbus made their bed. They have to sleep on it, or they will be out in the cold or renationalized. Period.

Quoting NAV20 (Reply 4):

I also wonder whether they're 'going quiet' on the A350XWB because the market reaction their salesmen are encountering is that most airlines expect to be happy for a long time with the 777/787 combination most of them already have on order?

Doubtful. Airlines will always listen to Airbus, if for no other reason then they want to keep Boeing honest now that McDonnell Douglas and Lockheed are gone.
 
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Stitch
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:37 am

Quoting AirFrnt (Reply 47):
I know that there is a contingent of people who believe that the only response to the A380 programs is to cancel it outright, but Airbus made their bed. They have to sleep on it, or they will be out in the cold or renationalized. Period.

Agreed. If Airbus cancels the A380 now, they've "killed" themselves, metaphorically. If they let the program run 20 years, it may very well end up "killing" them in the end, but if it succeeds...
 
Shenzhen
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:49 am

Unfortunately, Airlines read the same news that everyone else reads. The airlines that are considering the A350/787 will take this news into account, then add it to their latest experiences with Airbus' new product offerings, before making a decision ,which, to an extent, could either increase their (airlines) market share, or diminsh it in the years/decades to come.

Airbus may need to push out the A350 launch just to let time due its magic on short term memories and emotions. If they move forward with the A350 and lose high profile sales campaigns to the 787, for reasons other then the actual airplane itself, then this could hurt the program more then delaying it out further.

Just a thought...

Cheers
 
astuteman
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:52 am

Quoting AirFrnt (Reply 45):
Quoting Astuteman (Reply 2):
I actually see this as a bigger stumbling block for the A350 than the much-discussed cash squeeze.
You can bet your A** that nobody will throw money at the A350 until this is demonstrably sorted.
You can also bet your A** that once it is demonstrably sorted, the money for the A350 will be found.

Even if the 787 has 800 orders and the refreshment cycle is done by the time the A350 would enter service?

I wonder if they'll go back to the "existing" processes as used for the A340NG's as a lower risk option?

Is there that much of a "refreshment" cycle? - the 20 year market for planes of this size is supposed to be 4000 frames

Regards
 
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Stitch
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:55 am

Quoting Astuteman (Reply 50):
I wonder if they'll go back to the "existing" processes as used for the A340NG's as a lower risk option?

If it ensures the job gets done and can get it done with a delay of less then 12 months, that makes sense to me.
 
airfrnt
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 1:58 am

Quoting Astuteman (Reply 7):

Absolutely totally correct, Kappel - in every way
I think the penalty for cancelling is higher than $10Bn......there's an awful lot of company overhead cost cover built into that A380 sale price (profitable or otherwise) that the other programmes will HAVE to pick up if the A380's are cancelled.
People don't seem to see it somehow.

I am still not convienced that Airbus has (or should at this point) do the A350 with it's $10 billion cost (before overruns) but outside of that I agree with your statement.

Quoting Keesje (Reply 13):
Read between the lines
- Boss of Airbus (french) suggests to close a Hamburg A380 factory
- EADS boss (german) suggests to stop A350 development (threatens Toulouse WB line)
the elephants are dancing..

The German and French politicians are demanding a quid pro quo that everyone must suffer the same. (Talk about the ultimate extension of socialist ideas). The idea of moving the A320 to Hamburg and closing the A380 work in Hamburg apparently wasn't enough to hit that demand. The idea of canceling the A350 and the Hamburg A380 work may be that.

Quoting Aither (Reply 14):

You have state owned companies managed like state runned companies and vice versa. In the end it's all about good or bad management.

While there are state sponsored corporations (Mac and May, and the Fed) the corporate governance is traditionally split out from both the government (for example the heads of the banks at the Fed) and the company, so they act more like the board of a company. They also are financial in nature and exist to manage the overall economy, not compete with European companies in a particular niche.

Quoting Parapente (Reply 19):
The problems for Airbus are simply the differences between their marketing abilities and their manufacturing abilities. The A340-600 sized market was exactly right.Indeed their timing was exactly right. The end product was not. (compared to the 777-300er) It has been a disaster of enormous proportions.

I think "Disaster" might be a bit strong here.

Quoting Parapente (Reply 19):
The A380 is (I believe) again exactly the right product at exactly the right time



Quoting Parapente (Reply 19):
Its not what the airlines want (look at sales)

These two statements are contradictory.

Quoting Parapente (Reply 19):

However it looks like the engineers have shot Airbus in the foot again! ( a second one they will not survive-they have to get this right).

The problems with the A340 and the A346 in particular revolved around weight and design issues, with which responsibility lays with the engineers or the managers who authorized it. With the A380 the problem is with order sales and with the manufacturing process.
 
slz396
Posts: 1883
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RE: EADS-Enders: Stop Of A350 Program Not Impossible

Fri Oct 06, 2006 2:04 am

Back to topic:

http://today.reuters.com/news/articl...T-AIRBUS-A350.XML&rpc=66&type=qcna


As far as I read Mr Enders comments here on reuters, he has just said the EADS board will soon look at the A350XWB as well and that they will consider all options before they will decide.

No need to overly dramatize the fact a 'stop' is not completely ruled out yet as the link Fraport posted does.

What manager would not look at the cost aspect of a business decision first in the light of a revised profit outlook for the coming 3 years?

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