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calags
Posts: 47
Joined: Sat Jun 04, 2005 11:07 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:08 pm

Quoting Boeing767-300 (Reply 36):
hmm.....MD11??? Just because Airbus say it does not mean it is factual. Remember it was a 555 three class and now its 480 seats... go figure!!!!

Granted, Airbus isn't off the hook yet. They'd better deliver on the performance numbers or else the airlines would really stick it to them. We already know that Singapore isn't shy about canceling orders for unsatisfactory planes.

I just want to opine that both Singapore and Qantas must, at this point in time, consider having more A380s in their fleets still worthwhile. If either airline has already written off the A380 as a total turkey then I don't think they would order more planes even if Airbus pays them for the privilege.
 
osiris30
Posts: 2681
Joined: Sat Sep 30, 2006 10:16 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:09 pm

Quoting Mariner (Reply 47):
So I suggest - only suggest - there has to be something in it for Airbus as well, else why do it?

Even if Airbus broke even and nothing better on that deal it's a good deal for them. They need to show some strength right now. Selling the frames at cost would be a good move (not saying they went that low, just saying)
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
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keesje
Posts: 13582
Joined: Thu Apr 12, 2001 2:08 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:10 pm

Quoting Osiris30 (Reply 44):
In fairness I never said it was impossible, but I certainly wouldn't bet my life (or any sizeable amount of money) on it. Let me (for the sake of devil's advocate) throw this at you: In the last 2 years of that same forecast Airbus has sold 8 new 380s, and 0 380s that weren't conversions of previous options. Again I'm not saying they won't, but just pointing something out.

 rotfl 

I wouldn´t be surprised if QF is projecting different seatcounts for their A380 then the initial ones (480 seats) A rational 560-600 seat lay out doesn´t seem unlikely. 20 aircaft will mean we´ll see the A380 all over the QF network. Also on FRA, CDG, FCO, LAX, SFO, NRT, KUL, HKG, DFW?
"Never mistake motion for action." Ernest Hemingway
 
antares
Posts: 1367
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Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:12 pm

Qantas also cut a helluva deal on the 787s.

And it cut a helluva deal on the 747-400ERs.

And it sliced Boeing to the bone over the 65 initial order of 737s (firm plus options).

All we are seeing guys is a sharp management doing sharp deals.

The same rigorous analysis was applied to the A380 as was applied to the 787s. Both got the tick of approval. It wasn't right about one and wrong about the other but right about both. (At least I sure hope so...)

About a year ago Qantas said Melbourne-Los Angeles would be the first A380 route. Not to carry 555 passengers nor the 480 or 501 odd seats it is actually fitting, but to uplift 150 MORE passengers than it can on the return leg in the usual crappy route conditions with the 747-400ER. Apparently that means around 400-420 passengers.

Qantas has never attained the full loads the simpleton range payload charts claim across the Pacific with the 744s, and it doesn't expect to with an A380 either. What it does expect is superior uplift and operational results from using the A380, plus better hot weather performance departing Melbourne.

I'm hoping with a few years to have the choice of flying to Los Angeles either non-stop from Brisbane on a QF 787-9 or from Melbourne on a QF A380. Then I can make a comparison of the creature comforts of both, since if I'm actually leaving from near Canberra, I will do almost anything to avoid the absurdly inconvenient business of connecting in Sydney.

And I shouldn't overlook the choice of flying from either city on a long haul Virgin Blue 773ER or an A346. Last I heard that decision had gone back into play.

Antares
 
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Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:15 pm

Quoting Keesje (Reply 52):
DFW?

IMO the B787 would more likly be seen at DFW then the A380
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osiris30
Posts: 2681
Joined: Sat Sep 30, 2006 10:16 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:20 pm

Quoting Keesje (Reply 52):
[rotfl]

Out of curiousity, what was so funny about my statement of fact?
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
 
VHVXB
Posts: 5322
Joined: Tue Apr 25, 2006 7:54 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:27 pm

Quoting Antares (Reply 53):
Melbourne on a QF A380

won't this be QF's first route with the A380
 
art
Posts: 3125
Joined: Tue Feb 08, 2005 11:46 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:37 pm

Quoting Keesje (Reply 42):
Is there any information on the price or are we simply downplaying a remarkable signal to the market? We neither do have info on what price Boeing asked for QF to order 747-8s (free?)..

I think that Boeing took a commercial risk on the 747ADV, believing that the freighter would sell well for decades and justify the launch in its own right. To me there is bound to be replacement demand for the passenger aircraft from 747 operators in the future. I don't see pressure on Boeing to offer supersweet deals on the 748-I to get it launched ASAP.
 
PlaneHunter
Posts: 6537
Joined: Tue Mar 14, 2006 3:17 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:37 pm

Quoting Stitch (Reply 1):
I imagine EK's comments about it are just smoke to try and get some better terms from Airbus on their A346 cancellation. I expect 773ERs will be replacing those birds, not 748s.

 checkmark 

Quoting Cloudyapple (Reply 8):
Glad airline executives think longterm unlike some A388 bashers.

Indeed interesting - while certain people here continue to talk about upcoming "almost certain" cancellations, certain airlines order even more frames...

Quoting Boeing767-300 (Reply 36):
hmm.....MD11??? Just because Airbus say it does not mean it is factual. Remember it was a 555 three class and now its 480 seats... go figure!!!!

The 555-seat argument has always been and will remain ridiculous - which premium airline actually installs the layout which is suggested by the manufacturers? Have QF and SQ ever announced they would operate 550+ seats on the A380?

Quoting DfwRevolution (Reply 37):
Airbus is being exploited for the A380 program delays, so there is little reason to celebrate...

It's still better than a cancellation...


PH
Nothing's worse than flying the same reg twice!
 
ikramerica
Posts: 15055
Joined: Mon May 23, 2005 9:33 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:41 pm

Quoting N31029 (Reply 4):
Even if the A380 achieves nothing more than niche status over its lifetime, it is certainly a niche that only it can fill

No truer words were ever written.

The question is not whether airlines like QF or SQ or EK need the plane, as they really do, but whether other customers are in need of the plane to amount to 750 orders over 20 years (the number that makes the project worth doing).

QF and SQ and AF and LH could triple their order, and yet it wouldn't bring the program even to break even...
Of all the things to worry about... the Wookie has no pants.
 
astuteman
Posts: 7071
Joined: Mon Jan 24, 2005 7:50 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 4:57 pm

Quoting Futurecaptain (Reply 10):
I bet Airbus offered such deep discounts the airline couldn't refuse. Qantas executives are probably laughing at how cheap they got these birds.



Quoting Futurecaptain (Reply 14):
We all know airlines are now getting these aircraft very cheaply, by very large new aircraft standards.



Quoting Osiris30 (Reply 29):
I'm guessing QF got them at a song



Quoting Boeing767-300 (Reply 36):
It will be great news for Airbus when new orders come in at a decent margin not just launch discounts or "options" discounts further dicounted because of the production fiasco.



Quoting DfwRevolution (Reply 37):
Let's not be naive people, both the SQ and QF add-on orders are being made under extremely favorable terms. Airbus is being exploited for the A380 program delays, so there is little reason to celebrate...

We've been hearing this message ever since the first A380 contract was let. Every frame that Airbus have sold should have been sold originally at a loss, according to A-net "wisdom" (and Gellman "wisdom" too  Yeah sure ).
And yet, even after penalties and delays, according to EADS regulatory filings, Airbus expect frames not affected by the production snarl-up (from fr. 85 onwards) to contribute E33m each to profit (or $40m each), STILL.
God only knows what the original figure would have been without the delays. Probably approaching $50m per frame.
These comments will be no different.

QF will have got a GREAT deal. No doubt. But Airbus WILL make good money on this deal, too.

Quoting WingedMigrator (Reply 48):
Another point of interest: the marginal cost to produce an A380 is $115M (per Morgan Stanley analysis). Between that and the list price of $300M, there's probably room for a comfortable margin, even after "buy one, get one free" sort of deals, and even if that margin is shared among Airbus, engine makers, and other big subcontractors on the program (e.g. SAFRAN, United Technologies, Goodrich, Honeywell)

Correct. Although I don't know exactly how accurate the marginal production figure is, it's certainly the right order of magnitude.
I would expect this deal to command at least the same margin for Airbus as the later delayed frames.

Quoting Osiris30 (Reply 51):
Even if Airbus broke even and nothing better on that deal it's a good deal for them.

Which makes $250m-$300m profit on it an excellent piece of business  checkmark .

Quoting Antares (Reply 53):
Qantas also cut a helluva deal on the 787s.

And it cut a helluva deal on the 747-400ERs.

And it sliced Boeing to the bone over the 65 initial order of 737s (firm plus options).

All true. And yet, to be even-handed, Boeing will make good profit on these deals too, in just the same way.  checkmark .

Regards
 
art
Posts: 3125
Joined: Tue Feb 08, 2005 11:46 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:03 pm

Quoting WingedMigrator (Reply 48):
Another point of interest: the marginal cost to produce an A380 is $115M (per Morgan Stanley analysis).

Something amiss here! According to Richard Aboulafia (via Gellmann rept), it costs more like $200 million. So who is right?

Oh! Richard Aboulafia is consulted in the Morgan Stanley report, I now see. Why consult someone who has put his name to costings that are 75%+ wide of the mark - always presuming that Morgan Stanley are confident that their figures have been correctly calculated?

Quoting Astuteman (Reply 60):
Airbus expect frames not affected by the production snarl-up (from fr. 85 onwards) to contribute E33m each to profit (or $40m each),

Does that imply that Airbus expect to sell an A380 for marginal cost of production ($115 million) plus $40 million profit ie at a price of $155 million? Will that be the price that an airline will pay? That's near as dammit list price -45%

[Edited 2006-10-29 09:30:38]
 
mrcomet
Posts: 584
Joined: Mon Mar 28, 2005 5:53 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:10 pm

Quoting Antares (Reply 53):
All we are seeing guys is a sharp management doing sharp deals.



Quoting Antares (Reply 53):
The same rigorous analysis was applied to the A380 as was applied to the 787s. Both got the tick of approval. It wasn't right about one and wrong about the other but right about both.

I agree. While I still contend that the A380 is limited in sales long term by being a niche aircraft it is a legitimate niche and one that QF fits into nicely. The A380 fits better for them than the 748. Congrats to Airbus.

By knowing your system, reducing the number of models and ordering BIG numbers, you get the best deal and the best aircraft. I have to admire QF for their discipline. Meanwhile EK orders everything, takes nothing, blabs like school girls and doesn't look like they have a coherent plan going forward. QF has early slots on everything, good prices and a flexible fleet plan. Bravo.
The dude abides
 
astuteman
Posts: 7071
Joined: Mon Jan 24, 2005 7:50 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:17 pm

Quoting Art (Reply 61):
Something amiss here! According to Richard Aboulafia (via Gellmann rept), it costs more like $200 million. So who is right?

To be fair to RA, I have a feeling that he was responsible for the market analysis in the Gellman report, and not the (what should I call it?) "production cost estimate".

Whoever did the production cost estimate committed the twin crimes of a) flagrant disinformation, and b) making themselves look a complete prick.

I don't think it was RA.

Regards
 
PlaneHunter
Posts: 6537
Joined: Tue Mar 14, 2006 3:17 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:18 pm

Quoting MrComet (Reply 62):
Meanwhile EK orders everything, takes nothing, blabs like school girls and doesn't look like they have a coherent plan going forward.

I'm not sure which EK you mean in particular, but the one which is active in the airline business does not order everything, does indeed take something (actually large numbers of new aircraft), sometimes publicly criticizes the manufacturers and does have a plan for massive expansion (unlike other carriers)...


PH
Nothing's worse than flying the same reg twice!
 
leelaw
Posts: 4517
Joined: Sat May 29, 2004 4:13 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:22 pm

Quoting Art (Reply 32):
Current announced orders - ca 175
Production to end 2010 - ca 40

Production @ 40 frames per year from 2011 means the line is fully committed into 2013. Airbus would need to sell about another 70 to keep the line busy until 2015.

Can anyone foresee Airbus failing to sell another 70 A380's for delivery before 2015? To save some antipodean typing, I'll add "apart from Nav".

According to Mr. Sperl's (Airbus CFO) updated break-even analysis from last week: deliveries thru 2010 will total 84 units (1- '07, 13- '08, 25- '09, 45- '10) "vs 159 deliveries planned [thru 2010] in the original business plan [before the first major program delay announced in June 2005]," and "75 deliveries postponed beyond 2010."

[Edited 2006-10-29 09:30:12]
Lex Ancilla Justitiae
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:37 pm

Quoting UALMMFlyer (Reply 12):
The positive annocunements by SQ and QF on the performance of the A380 can not be over shadowed by numrous remarks about Airbus made deals on pricing that airlines couldn't refuse. At the end of the day, airlines still need to operate an efficient fleet with desired performance to make money. No one should sell A380 short with two creditable customers with more more orders.

Only QF is a firm order. SQ is only a LoI at this time. Still, this news is very positive for Airbus.

Quoting PanAm_DC10 (Reply 19):
With respect, please provide me with one link that states SQ would not take the 9 they have on LoI. I do not believe they have publicly stated that commitment is in question.

With respect, I question the commitment of every LoI, Airbus or Boeing, until a firm order has been signed.

Quoting PanAm_DC10 (Reply 19):
Options conversions are still sales, right?

Absolutely!  Smile

Quoting PanAm_DC10 (Reply 19):
Accept the fact, that despite it's problems, the A380 can still sell.

Fact accepted.  Smile This is proof positive that the WhaleJet can still sell.

Quoting Jacobin777 (Reply 25):
Two top-tiered customers indeed..it didn't seem as if QF might pull the trigger on their options, but they did....

The customers with the highest chances of exercising options were LH, QF, and SQ.

Quoting PITrules (Reply 30):
How are potential future 748i orders by SQ and QF being kept out? Both have large 744 fleets which are only getting older. The A380 will replace some, but I doubt all, 744s.

SQ have 19 B777-300ERs on firm order most of which will be replacing B747-400s. The remainder will be used for expansion. The new C class seats unveiled this month by SQ make clear that SQ will not be ordering any more JumboJets. The new seats just don't fit with reasonable aisle spacing anywhere but in the nose. On the maindeck, they would be spaced 1-2-1 with wastefully wide aisles. On the upperdeck, they would be spaced 1-1 with an extremely wasteful aisle. Even on the B777, the aisles are very wide with 1-2-1 spacing. They will fit nicely in an A340/B787 width cabin (or WhaleJet upperdeck).

Quoting Antares (Reply 53):
About a year ago Qantas said Melbourne-Los Angeles would be the first A380 route. Not to carry 555 passengers nor the 480 or 501 odd seats it is actually fitting, but to uplift 150 MORE passengers than it can on the return leg in the usual crappy route conditions with the 747-400ER. Apparently that means around 400-420 passengers.

Qantas has never attained the full loads the simpleton range payload charts claim across the Pacific with the 744s, and it doesn't expect to with an A380 either. What it does expect is superior uplift and operational results from using the A380, plus better hot weather performance departing Melbourne.

 checkmark 

Quoting Astuteman (Reply 60):
QF will have got a GREAT deal. No doubt. But Airbus WILL make good money on this deal, too.

 checkmark 
 
mauriceb
Posts: 2150
Joined: Tue Aug 10, 2004 2:50 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:40 pm

So in total they orderd

8 more A380's
4 More A330-300's?
5 more 737-800


they also stated that the 5 aditional 737-800's will replace the 747-300 on domestic routes while they will be phased out, converted or used for other things (maybe as spare aircraft if one of the 747-400/A330/767's break down?)
 
art
Posts: 3125
Joined: Tue Feb 08, 2005 11:46 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:45 pm

Quoting Leelaw (Reply 65):
Quoting Art (Reply 32):
Current announced orders - ca 175
Production to end 2010 - ca 40

Production @ 40 frames per year from 2011 means the line is fully committed into 2013. Airbus would need to sell about another 70 to keep the line busy until 2015.

Can anyone foresee Airbus failing to sell another 70 A380's for delivery before 2015? To save some antipodean typing, I'll add "apart from Nav".

According to Mr. Sperl's (Airbus CFO) updated break-even analysis from last week: deliveries thru 2010 will total 84 units (1- '07, 13- '08, 25- '09, 45- '10) "vs 159 deliveries planned [thru 2010] in the original business plan [before the first major program delay announced in June 2005]," and "75 deliveries postponed beyond 2010."

Thanks for the correction. Last figures I remember were 1,9,20 for 2007,2008,2009. I had not heard the figure of 45 pa before except last year when someone in Airbus mentioned that they were hoping to ramp production up to this number from the planned rate of 40 pa. If they can reach 45 pa, that will be a big help to the project's financial position.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 5:48 pm

Quoting Art (Reply 61):
Does that imply that Airbus expect to sell an A380 for marginal cost of production ($115 million) plus $40 million profit ie at a price of $155 million? Will that be the price that an airline will pay? That's near as dammit list price -45%

More or less, it implies that is about the average an airline will pay. The figure is unsurprising.
 
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mariner
Posts: 19473
Joined: Fri Nov 23, 2001 7:29 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:00 pm

Quoting Osiris30 (Reply 51):
Even if Airbus broke even and nothing better on that deal it's a good deal for them.

If you say so. But:

Quoting Osiris30 (Reply 44):
and there's 4 a330s in the mix you can bet that the 330s came at next to nothing cost wise (or the 380s were significantly reduced in price to the point where the 330s were almost free).

I am not an accountant, but I am not clear how any aircraft can achieve break-even if it is free.

mariner
aeternum nauta
 
ZK-NBT
Posts: 7163
Joined: Mon Oct 16, 2000 5:42 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:03 pm

Congrats to Airbus and QF on this one! Surprised me!



Quoting Planemanofnz (Reply 18):
Hopefully now this means we will see the 380 on selected Trans-Tasman flights to AKL and CHC and also maybe we will see the 380 on the MEL-AKL-LAX route.

Will be interesting, i'd imagine most if not all of them will be 3 class, they will still have about 9 744's then VH-OJS, T, U plus the ER's. Or they may go for a double daily 787 on AKL-LAX.

Quoting MauriceB (Reply 67):


they also stated that the 5 aditional 737-800's will replace the 747-300 on domestic routes while they will be phased out, converted or used for other things (maybe as spare aircraft if one of the 747-400/A330/767's break down?)

They did? They said the 738's would replace the 734's.

Quoting Keesje (Reply 52):
20 aircaft will mean we�ll see the A380 all over the QF network. Also on FRA, CDG, FCO, LAX, SFO, NRT, KUL, HKG, DFW?

KUL, I doubt it unless they make it a stopover enroute to Europe. CDG and FCO would i'd say be 787 routes if they returned. FRA would depend on the configuration but the 744's have a good load factor.

Add BKK and SIN, I agree with HKG and LAX, not sure on SFO and NRT though.
 
anax
Posts: 84
Joined: Sat Sep 23, 2006 3:20 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:09 pm

Well it seems that this order comes as an answer to those who believed the A380 and Airbus in the long run , were facing death.
Congrats to Qantas & Airbus.  bigthumbsup 
god is a spotter!!!
 
leelaw
Posts: 4517
Joined: Sat May 29, 2004 4:13 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:12 pm

Quoting Zvezda (Reply 66):
Quoting PanAm_DC10 (Reply 19):
Accept the fact, that despite it's problems, the A380 can still sell.

Fact accepted. This is proof positive that the WhaleJet can still sell.

The good news is QF has exercised eight of its twelve options, no doubt a boost for the A380 program.

The bad news is that even if all 167 firm orders hold, and all 62 remaining options are exercised (which assumes the unlikely scenario of zero order attrition in the coming years), Airbus still faces the daunting task of selling and delivering 191 additional A388s, without one additional dollar in cost overruns and/or investment in performance enhancing updates to spur sales, before the airframer will reach "break-even" (420 units) on the A388.

[Edited 2006-10-29 10:25:15]

[Edited 2006-10-29 10:31:09]
Lex Ancilla Justitiae
 
Ken777
Posts: 9994
Joined: Thu Mar 11, 2004 5:39 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:20 pm

Some ramblings:

Congrats to both QF and Airbus. It's always exciting to see a nice order for any plane announced and particularly good to see orders for a plane having some problems.

Now we know where Leahy has been recently. Away from the line of fire and bringing in some orders. I have to hand it to Leahy - he was given a rather difficult task at QF and made things work out.

It would be hard to argue that QF didn't get a very good deal on their new order. Airbus went in to talk with an airline that was not happy with them and left with a nice order in terms of units. It wasn't having the best wine that got that deal - it was making a deal that says "we're sorry for the delays" in a way a company like QF can appreciate.

Quoting Art (Reply 57):
I don't see pressure on Boeing to offer supersweet deals on the 748-I to get it launched ASAP.

i tend to agree with you in terms of airlines like QF that have compensation due for late 380 deliveries. I seriously doubt that airlines like BA or CX would get the same pricing as QF just did.

I believe that the 748i will do OK going head to head in new sales campaigns against the 380. Any sweeteners given to SQ and QF will impact the ability to discount future 380 sales when going against the 748i unless Airbus is willing to push out the break even point.

All in all it's good news and I'm glad to see it. I'm stuck in Houston after having cancer surgery and Airliners.net has been the best therapy I could get, especially with some exciting news like this breaking.  Smile
 
Rheinbote
Posts: 1103
Joined: Sun May 21, 2006 9:30 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:25 pm

If you are cash-strapped, providing compensation in the form of bargains in the mid/long-term probably is much more viable than providing near-term cash compensation. Just a thought...

By the way, if Power8 succeeds, there may be a 'beneficial fall-out' from the delays in so far as unit cost may come down by quite a margin wihtin a few years.
 
astuteman
Posts: 7071
Joined: Mon Jan 24, 2005 7:50 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:27 pm

Quoting Zvezda (Reply 69):
Quoting Art (Reply 61):
Does that imply that Airbus expect to sell an A380 for marginal cost of production ($115 million) plus $40 million profit ie at a price of $155 million? Will that be the price that an airline will pay? That's near as dammit list price -45%

More or less, it implies that is about the average an airline will pay. The figure is unsurprising.

Art, I've a suspicion that the $115m (or whatever the real number is) is an "Airframe only" figure, i.e. the price of the engines will have to be added in.
I've also a suspicion, but will happily be corrected, that "list price" includes typical prices for the engine options.
Thus we (I suspect) see "huge" discounts quoted that aren't quite as "huge" as they would otherwise appear to be.
(Suspicious, aren't I?  Smile )

Bear in mind also the expression "marginal" cost.
I infer from that phrase that this is the cost of adding an additional frame into the production process, thus spreading already committed overhead costs over more frames.
(higher turnover always reduces unit cost up to a the capacity limit)

The "average" cost will be higher, and from memory, the MS document WM quoted puts the "average" at c. $140m-$145m, after related overheads and depreciation are added.

I, along with others, am guilty of using "fixed" numbers in terms of cost and profit, to describe a situation where, in reality, the cost, and profit in fact vary somewhat almost week by week, as certain dependencies/influencing factors change.

e.g because of overhead cost recovery, and similar variables, adding, for example, A330's at "cost" into a particular year's production, may well increase the "profit" on A380's and A320's sold in that year.
Conversely, the cancellation of some of that year's A380's would make that year's A320's and A330's "cost" more.

I would expect the manufacturers to base their negotiations with airlines, and thus their "walk-away" price, on forecasts of throughput for the year's in which deliveries are to be made.
This is one of the reasons why the A380 delays have such a big impact on Airbus cashflow and profit in the years 2007 - 2009.

Regards
 
vfw614
Posts: 3810
Joined: Mon Dec 10, 2001 12:34 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:31 pm

I think it is fair to assume that there two options on the table: Either Airbus will pay damages for the delay as agreed in the original contract and the airlines walks out with these damages. This money for Airbus is lost anyway and would have to be paid today or tomorrow. OR Airbus sells some more airframes. They give a discount as high as the damages would be that have to be paid and could be used by QF, SQ etc. to buy some shiny Boeing airplanes (it is Qantas' money anyway - but that makes the package especially attractive to the outside world). If Airbus takes a business-like approach to that situation, they will still be willing to give additional discounts like in any other order. To make sure that the money stays with them through these additional orders, they will probably give a further discount which will, however, partially be off-set by the fact that the contractual damages would have hurt them today or tomorrow while most of the discount is for products produced and sold in 10 years time.

I don't think that Airbus is selling the farm with this kind of deal. The real problem, if any, is the amount of damages they have agreed to pay in the case of A380s delays when this order was placed a couple of years ago.

I personally think that even if the airlines like QF or SQ are now in a fairly comfortable situation when it comes to negotiating a deal with Airbus. However, it should not be overlooked that Airbus has virtually a monopoly in the VLA market and if they feel that SQ or QF will need additional aircraft after 2015, they need not sell at all costs. It is either "buy A380s" or buy something else that is significantly smaller and would only be a, by far, second best solution.
 
manni
Posts: 4049
Joined: Thu Nov 08, 2001 1:48 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:39 pm

The comments made in regards to the QF order by some aren't really unexpected, but I have to give it to some... your creativity seams endless.
Boeing is leading the sales this year by a huge margin, why is it so difficult to see Airbus signing up orders?

I'm willing to bet that BOTH Airbus and Qantas are satisfied partys in this deal.
Interesting to see an additional 4 A330s going to QF. If I kept track well, that makes 8 new A330s, since they put in their mega 787 order. No peanuts.

Airbus has signed up no less than 247 orders and commitments this week (those we know of), including 32 widebodies. Curious to see their monthly update and to see what aircraft are indeed firm orders and if there are any additional orders and commitments besides the 300 or so announced this month.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:39 pm

Quoting Anax (Reply 72):
Well it seems that this order comes as an answer to those who believed the A380 and Airbus in the long run , were facing death.

Losing 6 and picking up 8 is good news for the WhaleJet program, but it doesn't get it off the critical condition list (if you'll pardon continuation of the medical analogy). Airbus, on the other hand, never faced death as a result of the WhaleJet fiasco. If Airbus were to screw up the A350 program as badly as they have the WhaleJet program, then Airbus would be at risk. However, I see very little chance Airbus will make the same mistake twice. I really don't see why some people keep suggesting the failure of the WhaleJet program portends the death of Airbus.

Quoting Leelaw (Reply 73):
The bad news is that even if all 167 firm orders hold, and all 61 remaining options are exercised (which assumes the unlikely circumstance of zero order attrition in the coming years), Airbus still faces the daunting task of selling and delivering 191 additional A388s, without one additional dollar in cost overruns and/or investment in performance enhancing updates to spur sales, before the airframer will reach "break-even" (420 units) on the A388.

The VS orders are as good as dead. The coffin hasn't been nailed shut yet, but the body is cold. MH and TG remain very much in doubt. On the positive side, SQ might firm their LoI and LH might exercise options. I expect the WhaleJet will continue to have mixed news through next year. Break-even remains a distant and receding hope.
 
Adria
Posts: 781
Joined: Wed Aug 09, 2000 7:53 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:43 pm

Great news but this is not a surprise. The market of the A380 is obviously there and the airlines want them coming to their fleet as soon as possible after production starts. It is also nice to see how the A380 has an effect on other Airbus aircraft like the A332 or A333. Not only does the A380 sell but also other aircraft from the A330/A340 family...

Quoting Leelaw (Reply 73):
The good news is QF has exercised eight of its twelve options.

The bad news is that even if all 167 firm orders hold, and all 61 remaining options are exercised (which assumes the unlikely circumstance of zero order attrition in the coming years), Airbus still faces the daunting task of selling and delivering 191 additional A388s, without one additional dollar in cost overruns and/or investment in performance enhancing updates to spur sales, before the airframer will reach "break-even" (420 units) on the A388.

...in 20-30 years those 420 units are more than possible especially now where the A380 has no real competition...



I'm glad that the market thinks otherwise about the A380 than most of the a.net hobby A380 bashers do.
 
User avatar
mariner
Posts: 19473
Joined: Fri Nov 23, 2001 7:29 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:49 pm

Quoting Zvezda (Reply 79):
Break-even remains a distant and receding hope.

Is it only on a.net that something that is eight frames closer than it was yesterday is described as "receding"?

???

mariner
aeternum nauta
 
Adria
Posts: 781
Joined: Wed Aug 09, 2000 7:53 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:54 pm

Quoting Zvezda (Reply 79):
The VS orders are as good as dead.

pure speculation...

Quoting Zvezda (Reply 79):
Break-even remains a distant and receding hope.

...I guess you are talking about the 747-8I?
 
Rheinbote
Posts: 1103
Joined: Sun May 21, 2006 9:30 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:55 pm

It can be established by collating various public sources that single-aisle airplanes like 319 and 737-700 go for $25-27m each when bought in bulk. That means list prices get discounted by up to 60%. Of course, these are extremes and I doubt whether it's sustainable for the industry as a whole.

Quoting Astuteman (Reply 76):
I, along with others, am guilty of using "fixed" numbers in terms of cost and profit, to describe a situation where, in reality, the cost, and profit in fact vary somewhat almost week by week, as certain dependencies/influencing factors change.

Me too. Another factor is that airframe unit cost usually go down by 50% after say 5 years of production due to learning curve effects.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 6:57 pm

Quoting Manni (Reply 78):
I'm willing to bet that BOTH Airbus and Qantas are satisfied partys in this deal.

Of course. It's a good deal for both Airbus and QF. If it weren't they wouldn't have signed it.

Quoting Manni (Reply 78):
Airbus has signed up no less than 247 orders and commitments this week (those we know of), including 32 widebodies.

All in all a very good week for Airbus despite the effective VS cancellation.

Quoting Mariner (Reply 81):
Is it only on a.net that something that is eight frames closer than it was yesterday is described as "receding"?

The break-even number has been rising faster than the order count, so it's fair to say that hope of break-even is receding.
 
MRURUN
Posts: 147
Joined: Mon Aug 21, 2006 7:17 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:01 pm

Quoting Stitch (Reply 1):

Of course it has life and will blow all you nay-sayers socks off.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:01 pm

Quoting Rheinbote (Reply 83):
It can be established by collating various public sources that single-aisle airplanes like 319 and 737-700 go for $25-27m each when bought in bulk. That means list prices get discounted by up to 60%.

It looks like you're comparing actual prices without engines to list prices including engines.
 
Rheinbote
Posts: 1103
Joined: Sun May 21, 2006 9:30 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:06 pm

Quoting Zvezda (Reply 86):
It looks like you're comparing actual prices without engines to list prices including engines.

You may be right, I have to check back.
 
astuteman
Posts: 7071
Joined: Mon Jan 24, 2005 7:50 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:06 pm

Quoting Zvezda (Reply 86):
It looks like you're comparing actual prices without engines to list prices including engines

Is that the answer to my earlier question?  biggrin 

If so, thanks.  checkmark 

Regards
 
2wingtips
Posts: 487
Joined: Fri Jul 21, 2006 12:42 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:12 pm

Quoting Keesje (Reply 52):
I wouldn�t be surprised if QF is projecting different seatcounts for their A380 then the initial ones (480 seats) A rational 560-600 seat lay out doesn�t seem unlikely. 20 aircaft will mean we�ll see the A380 all over the QF network. Also on FRA, CDG, FCO, LAX, SFO, NRT, KUL, HKG, DFW?

FRA........................maybe.

CDG........................couldn't make money with 2/3 class 744s. If it comes back to the QF network, it will most likely be a QF/JQ 787 route

FCO.........................as per CDG

LAX...........................was always going to be a 380 route from MEL/SYD

SFO..........................Could be. Don't know.

NRT...........................maybe.


KUL.............................as per CDG


HKG.............................likely and onward to LHR

DFW............................not doable non-stop. 8,000nm ain't good enough for the westbound journey year-round. Can't be done with a viable payload with 748I/346/773ER either. Will most likely be a 789 sector.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:12 pm

Quoting Astuteman (Reply 88):
Is that the answer to my earlier question?

I'm not sure in that case. I've been in airliner negotiations. 45% off list is plausible. 60% off list is not plausible.
 
iwok
Posts: 979
Joined: Wed Jan 26, 2005 2:35 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:17 pm

Quoting Zvezda (Reply 79):
The VS orders are as good as dead. The coffin hasn't been nailed shut yet, but the body is cold. MH and TG remain very much in doubt. On the positive side, SQ might firm their LoI and LH might exercise options.

VS: just curious if you have other sources outside of a.net? From what I have read on the financial sites, these orders are in a sort of limbo.

MH: I agree with you; current financial performance is weak.

TG: Not sure why you think these are so weak.

SQ: These should probably go forward especially if there are a couple of cancellations. They might be pissed about another 350 delay, but they seem to be pretty committed to the 380.

LH: Looking good I'd say. Recent comments indicate a strong like for the 380 on LH's part.

Other than these slot trading excersizes going on now, are there any new and interesting orders that are on the horizon?

iwok
 
User avatar
mariner
Posts: 19473
Joined: Fri Nov 23, 2001 7:29 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:17 pm

Quoting Zvezda (Reply 84):
The break-even number has been rising faster than the order count, so it's fair to say that hope of break-even is receding.

"Receding" may have been the correct word yesterday. Bu something that came a little closer today is hardly "receding".

Just a week or so ago, someone here was sneering at the sales of the A320 thus year. Then China happened.

From ebb to flow in a heartbeat.

mariner
aeternum nauta
 
art
Posts: 3125
Joined: Tue Feb 08, 2005 11:46 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:21 pm

Quoting Astuteman (Reply 88):
Quoting Zvezda (Reply 86):
It looks like you're comparing actual prices without engines to list prices including engines

Is that the answer to my earlier question?

If so, thanks.

That would make the $155 million A380 price tag look more realistic. According to the Morgan Stanley report mentioned earlier, RR Trent 900's for an A380 cost $18 million. $173 million is still more than 40% off list, though. Why would Airbus need to sell at such a large discount if performance figures prove to be good after EIS?
 
sk736
Posts: 725
Joined: Tue Aug 08, 2006 4:47 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:32 pm

Quoting Futurecaptain (Reply 10):
I bet Airbus offered such deep discounts the airline couldn't refuse. Qantas executives are probably laughing at how cheap they got these birds.

There's a strong smell of sour grapes around here.
 
RichardPrice
Posts: 4474
Joined: Sat Apr 23, 2005 5:12 am

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:34 pm

Quoting Zvezda (Reply 79):
Losing 6 and picking up 8 is good news for the WhaleJet program

Ive been away for a day or so, who cancelled 6 A380 frames? VS only deferrred theirs as far as I know.
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:54 pm

Quoting Iwok (Reply 91):
just curious if you have other sources outside of a.net? From what I have read on the financial sites, these orders are in a sort of limbo.

Yes, I have other sources outside of a.net. The chances of VS taking delivery of their WhaleJets is about the same as the chances of PR taking delivery of their JumboJets. When an airliner order is deferred more than, say, two or three years, look at the airline's financial health. If they have cash flow problems, that's probably the reason for the deferal. If they don't have cash flow problems, count it as a cancellation that hasn't had the Is dotted and the Ts crossed yet.

Quoting Mariner (Reply 92):
"Receding" may have been the correct word yesterday. Bu something that came a little closer today is hardly "receding".

Just a week or so ago, someone here was sneering at the sales of the A320 thus year. Then China happened.

From ebb to flow in a heartbeat.

I try to take a longer-term view. I don't want to see threads like "Boeing outsold Airbus 160 to 0 this week. How can Airbus survive?"
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 7:58 pm

Quoting SK736 (Reply 94):
There's a strong smell of sour grapes around here.

Yes. There is likely to be a roughly equal amount of celebrating on both sides. If anything, Airbus execs might be even happier than QF execs right now.
 
VHVXB
Posts: 5322
Joined: Tue Apr 25, 2006 7:54 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 8:01 pm

Quoting 2wingtips (Reply 89):
CDG........................couldn't make money with 2/3 class 744s

I thought they couldn't make money because they were restricted to 3 services a week

Quoting 2wingtips (Reply 89):
FCO.........................as per CDG

this route was operated by the B743

Quoting 2wingtips (Reply 89):
SFO..........................Could be. Don't know.

SFO should go daily with the B744 once they start to getting their A380s
 
zvezda
Posts: 8886
Joined: Sat Aug 28, 2004 8:48 pm

Confirmed: Qantas Orders Additional A380 Aircraft

Sun Oct 29, 2006 8:09 pm

Quoting VHVXB (Reply 98):
I thought they couldn't make money because they were restricted to 3 services a week

It's almost impossible to get good yields on less frequent than daily service because business travellers generally avoid flights less frequent than daily.
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