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Flying-Tiger
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A380 Will Crush Rivals: Predicts Expert II

Tue Jan 02, 2007 10:09 pm

Quoting Leelaw (Reply 47):
SQ are not purchasing the A330s, they're leasing them directly from Airbus on what appear to be extraordinary terms indeed, at least vis-a-vis the duration of the leases.

Guess this is a situation where you both are correct. SQ is not directly ordering these A330-300s, however these 19 A330-300 will be specifically manufactured for SQ´s lease with the clear (??) intention of placing them with other carriers afterwards - if SQ is not keeping them. That basically means that SQ is ordering them, however on very creative "ordering terms".

Quoting Stitch (Reply 45):
The next five to ten years will probably be the most critical for each plane to garner as many orders as it can as the "wonder twins" - the 787 and A350X - prepare to enter service.

Guess this is one of the best quotes here. IMO both the B787 and A350 are over-hyped. They just reflect the next generation of wide-body twins, but are certainly no revolution. As with basicaly all previous designs of whatever size they are likely to open up some new business opportunities, but that´s it. Don´t know where the "wonder" is supposed to be.

Quoting Planemaker (Reply 43):
CFRP VLA's, they won't be around for a long time. Perhaps the best one can expect in the interim is an increase in CFRP use on the exisiting designs with improved engines.

Absolutely correct. One shouldn´t forget in this entire discussion that even our supposed "wonder twins" will be nowhere near 100% CFRP, but will both hang around the 50-60% of "advanced materials".

Quoting Zvezda (Reply 46):
Those already sold would saturate that tiny niche.

Capacity-wise: probably yes. Adjusting for constrains such as time differences and airport slots: no.

1. There is no real chance to replace two current B747-400 flights operating from SIN to FRA within minutes (23:55 and 23:59 AFAIK) with 4 B787 or A350. Slot availability simply puts limits on it.

2. Consider crew availability and costs. While it might be less of an issue in South-East Asia, crew costs certainly come into play in US and Europe. Whilst you would need a set of 3 pilots (one counted as back up) and a cabin crew of say 20 for one A380 flight, you would need for a similar operation with B787/A350 2 sets of pilots (=6) and 2 set of cabin crews (=20). 3 additional pilots doesn´t sound much, but now multiply this with 4 sets of crew for each plane, and a fleet of 20 planes. That makes 240 additional pilots - and THAT´s clearly a cost factor, at least in high-salary countries.
Flown: A319/320/321,A332/3,A343/346, A359, A380,AT4,AT7,B712, B732/3/4/5/7/8/9,B742/4,B752/3, B762/763,B772/77W,CR2/7/9/K,ER3/4,E70/75/90/95, F50/70/100,M11,L15,SF3,S20, AR8/1, 142/143,... 330.860 miles and counting.
 
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Stitch
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Tue Jan 02, 2007 10:14 pm

Quoting Leelaw (Reply 47):
SQ are not purchasing the A330s, they're leasing them directly from Airbus on what appear to be extraordinary terms indeed, at least vis-a-vis the duration of the leases.

Yeah. Yeah. But my point still stands that SQ would not take these planes unless they needed them. And if building and leasing those birds to SQ was going to be more expensive then whatever compensation they owed SQ for the missed delivery targets on the A380, Airbus would have just written them a check.

Quoting Flying-Tiger (Reply 50):
Guess this is one of the best quotes here. IMO both the B787 and A350 are over-hyped. They just reflect the next generation of wide-body twins, but are certainly no revolution.

At least in the case of the 787, I believe her construction materials and construction methods are both revolutionary, even if it will take many years for that to become clear...
 
zvezda
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Tue Jan 02, 2007 10:18 pm

Quoting Zvezda (Reply 1):
The only crushing going on is in the net sales during the time both have been available: 747-8 SuperJumbo 74, WhaleJet 7.

I forgot to count the four VIP sales, so the correct count is: 747-8 SuperJumbo 78, WhaleJet 7.
 
baroque
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Tue Jan 02, 2007 10:37 pm

Quoting Zeke (Reply 15):
QF buys aircraft for the QF group, not just to fly in QF colors. The latest pilot agreement for JQ was to include the 380 as well.

Interesting possibilities spring from that little gem Zeke!

Quoting PM (Reply 24):
Does that suggest that later, improved versions of the A380 will sell better? And that Airbus will make its money on a version launched in 2020?! Oops!

Fascinating listing PM, it will be interesting to look back on similar data for the A380.

Quoting GBan (Reply 34):
Might be interesting as well: LH expects 3.5 litres per passenger and 100 kilometres for the 747-8 in LH configuration (see press release) and expects 3.3 litres per passenger and 100 km for the A380 in LH configuration (http://a380.lufthansa.com/en/html/ueberblick/index.php). Economical advantage per passenger is 6% in favour of the A380.

If expected Teutonic precision applies, that seems to answer a few questions, but then again

Quoting Zvezda (Reply 44):
Quoting Astuteman (Reply 42):
Do you consider that they wrote this as part of a "justification" for ordering both?...............

Applying Occam's Razor, yes, that is the obvious reason.

And straddling Occam's Razor will do even more serious damage than being crushed by an errant A380!  alert 
 
leelaw
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Tue Jan 02, 2007 10:37 pm

Quoting Stitch (Reply 51):
my point still stands that SQ would not take these planes unless they needed them.

They're needed because the A350 won't be available until at least 2013. BTW, if the 748I isn't "cutting-edge" enough for Mr. Seng's consideration, it seems unlikely he would consider "purchasing" A330s as well.

Quoting Stitch (Reply 51):
if building and leasing those birds to SQ was going to be more expensive then [sic] whatever compensation they owed SQ for the missed delivery targets on the A380, Airbus would have just written them a check.

Given the cash crunch Airbus' faces over the next 4-5 years, large amounts of cash compensation, though possibly a cheaper compensation alternative than "creative" lease deals, may not have been a viable option in terms of funding capital projects in coming years.

[Edited 2007-01-02 14:47:13]
Lex Ancilla Justitiae
 
planemaker
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Tue Jan 02, 2007 10:44 pm

Quoting Zvezda (Reply 49):
What agreement? I don't see any trend toward a reduction in the number of carriers.

That is not what you said in the VLJ thread...

Quoting Zvezda (Reply 6):
I doubt more than two of the legacy carriers will survive to 2012. Maybe not even two. If WN start code-sharing for foreign carriers, that will accelerate the inevitable.



Quoting Stitch (Reply 51):
At least in the case of the 787, I believe her construction materials and construction methods are both revolutionary, even if it will take many years for that to become clear...

Not to take anything away from the 787 but it is not revolutionary but evolutionary, and only in scale... not in practice. There is nothing really revolutionary in the 787 save that it is a first for pax airliners.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
zvezda
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Tue Jan 02, 2007 10:57 pm

Quoting Planemaker (Reply 55):
That is not what you said in the VLJ thread...

Legacy carriers are not the only carriers. If trends continue, the number of new entrants over the period under discussion (about 6 years) would more than exceed the number of legacy carriers flying today. So, even if all the legacy carriers were to fold, there probably would still be more carriers then than now.
 
planemaker
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Tue Jan 02, 2007 11:43 pm

Quoting Zvezda (Reply 57):
Legacy carriers are not the only carriers. If trends continue, the number of new entrants over the period under discussion (about 6 years) would more than exceed the number of legacy carriers flying today. So, even if all the legacy carriers were to fold, there probably would still be more carriers then than now.

As has been shown by "trends", new entrants have a very short life-span. Furthermore, the new entrants have been overwhelmingly regional LCCs flying 737s/A320s and not widebodies.

Quoting Stitch (Reply 58):
While I know CFRPs have been used in military programs and parts of the A388, I still think it's pretty revolutionary as employed in the 787, but hey, to each their own.

Again, not taking anything away from the 787 as a suberb airliner incorporating leading technology but Beech has been the "revolutionary" one with CFRP aircraft. FYI, Beech has wound CFRP around fuselage mandrels for over 5 years...




There really isn't a single "revolutionary" as opposed to "evolutionary" thing that Boeing has done other than integrate aerospace "state-of-the-art" in a large commercial airliner for the first time.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
Adria
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Wed Jan 03, 2007 12:12 am

Quoting Zvezda (Reply 39):
During the time both have been on sale (slightly more than a year), net sales are 74 to 7. You're free to doubt whether the one that sold 74 is a strong competitor to the one that sold 7, just as you're free believe the moon is made of cheese.

Sure sure, and the A320 family outsold the 777 family this year...comparing two different aircraft for two different markets is a big mistake (in case you don't get my point-you cannot compare the 747F with the A380pax) so I don't care if the moon is made of hot chocolate, you still are wrong (as many times before)...


Quoting Zvezda (Reply 39):
Quoting Adria (Reply 38):
Possibly true but because of the A380 Airbus booked some orders for other Airbus aircraft (an advantage Boeing had for decades with the 747). So despite A380 Airbus did manage to get something good of the crisis.

Pure speculation.

funny that the word "speculation" comes from someone who already has all the CASM data for all versions of 787 and A350 (and uses every possible chance to bash the A350 with this "reliable data")

Quoting Stitch (Reply 45):
True. While I believe a number of the recent A330 orders to airlines like SQ, QF and LH were discounted beyond the usual ~30% because of the A380 penalties being factored into the deals, none of those carriers would take planes they didn't need or felt could not be operated at a profit. So Airbus was able to save themselves hundreds of millions in cash penalty payments while adding a few billion to their order book.

...and fill the A330/A340 production line but despite the last A330 sales Airbus can make good package deals for airlines in the future just like Boeing did in the past with the 747 (combined with the 737-for example).
 
Dougloid
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A380 Will Crush Rivals: Predicts Expert II

Wed Jan 03, 2007 12:27 am

Quoting Dazeflight (Reply 11):
So I'm going to repeat my message, too: The net sales during the time both have been available in the passenger segement, the only segement where both kind of compete with each other, is 20 for the 747-8 vs. 17 for the A380. Until 1 month ago it was 0 vs. 17. That only shows the value of your repeated figures atm: nihil, nothing, zero.

The fact that you responded in kind suggests that you too have a sick and obsessive relationship to the whalejet.


 Wink  Wink  Wink
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
Dougloid
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Wed Jan 03, 2007 12:32 am

Quoting WingedMigrator (Reply 30):
While cash flow will be negative through 2010 due to the production snafu, all indications are that it will be rather positive thereafter. While the ROI indeed looks terrible, and the launch of the A380 program may turn out to have been a colossal mistake, any investor would tell you that it's useless to cry over spilled milk.

True. The relevant question to any investor would be how much it's going to cost to clean up the mess. And it's more like spilled used motor oil...the mess will persist.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
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USAF336TFS
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Wed Jan 03, 2007 12:41 am

Of course all this "crushing" of A380 sales, assumes that UPS will not cancel it's orders. I for one, would not be shocked if they did.
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zvezda
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Wed Jan 03, 2007 1:05 am

Quoting Adria (Reply 58):
you cannot compare the 747F with the A380pax

Of course I can. At the end of the day, a sale is a sale. It makes little difference to the Boeing or EADS shareholders whether the aircraft carries self-loading or non-self-loading freight. One program looks set to makes billions of dollars and the other looks set to lose billions of euro.

Even some of the most rabid WhaleJet cheerleaders have conceded that the 747-8F will continue to outsell the A380F. As the 747-8I continues to outsell the SLF WhaleJet (so far, 24 (all to new 5 customers) to 17 (all to 2 existing customers), during the period both have been available for order), eventually that will be conceded too.

Hopefully, both VLAs will sell well during 2007, but I can find cause to be optimistic only for one of them.
 
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Stitch
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Wed Jan 03, 2007 1:12 am

My original post was deleted due to part of it referencing a now-deleted post in this thread, but Leelaw's post (#54) remains, so I am re-posting just my response to his post:

Quoting Leelaw (Reply 54):
They're needed because the A350 won't be available until at least 2013. BTW, if the 748I isn't "cutting-edge" enough for Mr. Seng's consideration, it seems unlikely he would consider "purchasing" A330s as well.

And if SQ hadn't futzed around waiting to see what the A350 would bring to the table and just bought the 787-9 at launch and if they hadn't stalled on taking their 77Ws to show-off the new premium cabin product on the A388 first, they wouldn't need to lease the A330s.

Quoting Leelaw (Reply 54):
Given the cash crunch Airbus' faces over the next 4-5 years, large amounts of cash compensation, though possibly a cheaper compensation alternative than "creative" lease deals, may not have been a viable option in terms of funding capital projects in coming years.

Yet how much cash are we talking about? QF said they're getting like $170 million, and there is huge debate whether that was actual cash owed to QF or if that is what QF negotiated "in goods and services". Even if the total was, say, $1 billion, such a "cash crunch" I would think would preclude Airbus from deciding to lose, say, $2 billion or more in cash by leasing A330s at a loss, since they still have to pay all those monies to the suppliers and workers to build those planes and they're all coming due starting next year...
 
zvezda
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Wed Jan 03, 2007 1:28 am

Quoting Stitch (Reply 63):
And if SQ hadn't futzed around waiting to see what the A350 would bring to the table and just bought the 787-9 at launch and if they hadn't stalled on taking their 77Ws to show-off the new premium cabin product on the A388 first, they wouldn't need to lease the A330s.

It's only for the former reason, not the latter. SQ have already taken delivery of 9V-SWG and I understand that they now have all the 777-300ERs that were deferred. SQ's big mistake was not ordering the 787-9 two years ago.
 
TeamAmerica
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Wed Jan 03, 2007 2:19 am

Quoting Flying-Tiger (Reply 50):
IMO both the B787 and A350 are over-hyped. They just reflect the next generation of wide-body twins, but are certainly no revolution. As with basicaly all previous designs of whatever size they are likely to open up some new business opportunities, but that´s it. Don´t know where the "wonder" is supposed to be.

 spit I'm guessing that you are not easily impressed. Application of a new material and new method of fabricating large fuselages is a milestone in aviation. A shame if we don't appreciate what we are witnessing.

Quoting Flying-Tiger (Reply 50):
Absolutely correct. One shouldn´t forget in this entire discussion that even our supposed "wonder twins" will be nowhere near 100% CFRP, but will both hang around the 50-60% of "advanced materials

Hold on there. It's 60% by weight. Imagine an aircraft built of nearly weightless Unobtainium alloy, which would be "only" 5% Un-alloy by weight. Would you be scoffing at that?

Quoting Planemaker (Reply 57):
There really isn't a single "revolutionary" as opposed to "evolutionary" thing that Boeing has done other than integrate aerospace "state-of-the-art" in a large commercial airliner for the first time.

Such a jaded observation could be made of virtually any commerical aircraft. The B707 was not the first 4-engine jetliner, the B747 was just bigger, and the Concorde was just pointy-shaped and really fast. We are talking about passenger jets here, not experimental aircraft. Virtually all technology applied to commercial jets will have been pioneered elsewhere, but that does not make the application any the less notable. airplane 
Failure is not an option; it's an outcome.
 
zvezda
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Wed Jan 03, 2007 2:27 am

Quoting Flying-Tiger (Reply 50):
IMO both the B787 and A350 are over-hyped. They just reflect the next generation of wide-body twins, but are certainly no revolution. As with basicaly all previous designs of whatever size they are likely to open up some new business opportunities, but that´s it. Don´t know where the "wonder" is supposed to be.

The change from wood and fabric construction to aluminium construction wasn't a big deal either, right?
 
planemaker
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Wed Jan 03, 2007 2:33 am

Quoting TeamAmerica (Reply 65):
not experimental aircraft.

FYI, the Premier and Horizon are production aircraft not experimental.  Smile

Quoting TeamAmerica (Reply 65):
Such a jaded observation could be made of virtually any commerical aircraft.

No, the 747 and the Concorde are indeed unique. Even a causual observer can see that.

Quoting TeamAmerica (Reply 65):
Virtually all technology applied to commercial jets will have been pioneered elsewhere, but that does not make the application any the less notable.

But it is evolutionary, not revolutionary. That is the point.  Smile
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
TeamAmerica
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Wed Jan 03, 2007 2:46 am

Quoting Planemaker (Reply 67):
No, the 747 and the Concorde are indeed unique. Even a causual observer can see that.

Perhaps you're considering the shape more than the substance. The A350 and B787 are indeed conventional in appearance, but there's so much more to it than that.
Failure is not an option; it's an outcome.
 
planemaker
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Wed Jan 03, 2007 3:29 am

Quoting TeamAmerica (Reply 68):
Perhaps you're considering the shape more than the substance. The A350 and B787 are indeed conventional in appearance, but there's so much more to it than that.

No, I wasn't. However, the shape does reflect the "revolutionary" and not "evolutionary" design of both aircraft in effect and technology. Even more impressive in that a lot of both aircraft were designed with slide-rulers. Either of the 787 or A350 don't measure up as "revolutionary"... almost everything about them is an evolution or a refinement. However, that is in no way a negative observation of them... just an indication of the progress of civil aviation over time.  Smile
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
leelaw
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Wed Jan 03, 2007 3:50 am

Quoting Stitch (Reply 63):
Yet how much cash are we talking about? QF said they're getting like $170 million, and there is huge debate whether that was actual cash owed to QF or if that is what QF negotiated "in goods and services". Even if the total was, say, $1 billion, such a "cash crunch" I would think would preclude Airbus from deciding to lose, say, $2 billion or more in cash by leasing A330s at a loss, since they still have to pay all those monies to the suppliers and workers to build those planes and they're all coming due starting next year...

I'm not fathoming how potential losses could run into the billions from this particular transaction, especially if one is sanguine about the prospects of the A330 maintaining high residual values far into the next decade. It's true Airbus will have to expend a fair amount of cash to manufacture the requisite aircraft, but that seems to be the price extracted by SQ to lend their "blue chip" credibility to "relaunching" the A350XWB once the "old all-new A350" was dead in the water. Although a firm order for the A350 is apparently not a condition precedent for concluding the "lease deal," there's got to be a quid pro quo in the larger scheme of things.
Lex Ancilla Justitiae
 
zvezda
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Wed Jan 03, 2007 3:57 am

Quoting Leelaw (Reply 70):
I'm not fathoming how potential losses could run into the billions from this particular transaction, especially if one is sanguine about the prospects of the A330 maintaining high residual values far into the next decade.

I don't expect A330s to have high residual value once A350s are in service.
 
leelaw
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Wed Jan 03, 2007 4:16 am

Quoting Zvezda (Reply 71):
I don't expect A330s to have high residual value once A350s are in service.

You and I don't, but most Airbusiers do; however, my impression is that Stitch, though not a "dye in the wool" Airbus aficionado, is quite sanguine about the prospects of the A330 in the secondary/after market.
Lex Ancilla Justitiae
 
astuteman
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Wed Jan 03, 2007 5:01 am

Quoting Zvezda (Reply 44):
Quoting Astuteman (Reply 42):
Do you consider that they wrote this as part of a "justification" for ordering both?...............

Applying Occam's Razor, yes, that is the obvious reason.

The danger with razors of course is that the success of the result is in the way that you apply them  Smile

Quoting Baroque (Reply 53):
And straddling Occam's Razor will do even more serious damage than being crushed by an errant A380!

Quite so.  Wink

Regards
 
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Stitch
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Wed Jan 03, 2007 5:05 am

Quoting Leelaw (Reply 72):
You and I don't, but most Airbusiers do; however, my impression is that Stitch, though not a "dye in the wool" Airbus aficionado, is quite sanguine about the prospects of the A330 in the secondary/after market.

My argument is essentially that I do not believe Airbus was "bent over the table" by the airlines when it came to signing these A330 lease deals and that if that is what the airlines had demanded, Airbus wouldn't have done the deal.

I also believe these airlines, for whatever reasons, need these planes and are not just taking them because Airbus made them so cheap even if they fly at low loads, they'll still make money doing so.

I do agree that Airbus is the one taking on the risk, at least in the deals framed like SQ's, where they are the Lessor of Record. But I do believe Airbus feels that risk is low enough to justify being the Lessor of Record in those deals.

Now, Airbus may be wrong, and they're going to take a bath on these planes because the lease payments they are charging will end up not being profitable and the re-sale value will be far lower then they thought so they will be "upside down" financially during the entire life of the transaction, but that is not a question I can answer, so I am going to give them the benefit of the doubt until presented evidence that shows they are, indeed, wrong.
 
andessmf
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Wed Jan 03, 2007 5:29 am

Quoting Zvezda (Reply 71):
I don't expect A330s to have high residual value once A350s are in service.

In the history of transportation, there have been many 'revolutionary' machines that so absolutely changed the economics of transportation, that it immediately made obsolete the previous generation.

1. Jet engines. The economics of the jet age were so much better, that even newer propeller driven aircraft soon disappeared from mainline service.
2. Once diesel-electric trains came of age, the steam powered era came to a close rather quickly.

There might be other economic benefits to composite fuselages unknown to us at this time. If there are plenty of other benefits, like less maintenance required, we might find that airlines will clamor for the economic advantages that composite fuselages provide, thereby making the previous generation of aircraft obsolete and less desirable than before.
 
NAV20
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Wed Jan 03, 2007 8:50 am

Quoting Stitch (Reply 63):
Even if the total was, say, $1 billion, such a "cash crunch" I would think would preclude Airbus from deciding to lose, say, $2 billion or more in cash by leasing A330s at a loss, since they still have to pay all those monies to the suppliers and workers to build those planes and they're all coming due starting next year...

There is little doubt that unless it can raise extra capital, EADS will be short of cash next year. It has been reported that EADS and its 'shareholders' - i.e. the various governments - reached agreement on a government-guaranteed Euro4.0 B. funding package before Christmas.

http://www.easybourse.com/Website/dy...D=8ea8119062f942151162be6d5934d0c7

"And, according to sources close to the discussions, some EUR6 billion of the A350's development costs will be funded by EADS and EUR4 billion more will come from financing backed by state guarantees from the four countries supporting Airbus: France, the U.K., Germany and Spain, the FT reported.'


The amount to be raised - say $US5.0B. - sounds about the right sort of amount required to cover the forecast A380 production losses, compensation payments, initial design expenditure on the A350 etc. over the next couple of years?

Of course, such government-backed assistance would be almost indistinguishable from 'launch aid,' and the US Government will certainly challenge any such proposals in the WTO. If nothing else, that will delay things for a long time.

So it is quite likely that EADS will not in fact receive the government-backed money in 2007. Which COULD leave them quite short of cash late in the year.

[Edited 2007-01-03 00:58:26]
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
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keesje
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Wed Jan 03, 2007 9:12 am

Quoting Flying-Tiger (Reply 50):
Guess this is one of the best quotes here. IMO both the B787 and A350 are over-hyped. They just reflect the next generation of wide-body twins, but are certainly no revolution. As with basicaly all previous designs of whatever size they are likely to open up some new business opportunities, but that´s it. Don´t know where the "wonder" is supposed to be.

 biggrin  No place & time to be down to earth Tiger, we are talking carefully cultivated market campaigns with true believers here. I did a similar topic a year ago telling a.net the 787 would probably be a great aircraft, but not a game changer. Explaining why in detail was oil on the fire. People still come back on it  Smile

https://www.airliners.net/discussions...general_aviation/read.main/2664716

Quoting Zvezda (Reply 71):
I don't expect A330s to have high residual value once A350s are in service.

I and many others (lessors) think it will make great freighters. I think all the airlines ordering them now take residual value into account.
"Never mistake motion for action." Ernest Hemingway
 
zvezda
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Wed Jan 03, 2007 9:23 am

Quoting Keesje (Reply 78):
I and many others (lessors) think it will make great freighters. I think all the airlines ordering them now take residual value into account.

I also think the A330 will make a great freighter. However, one doesn't pay a high price for a used passenger liner in order to convert it into a freighter. They will have some residual value, but it won't be high. A330s will still have some residual value after the last A340 has been parked in the desert.
 
andessmf
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Wed Jan 03, 2007 9:36 am

Quoting Keesje (Reply 78):
I did a similar topic a year ago telling a.net the 787 would probably be a great aircraft, but not a game changer.

Perhaps, but we won't know that for sure till years from now. The same could easily be said about the A380. Is not necessarily new technology that is a game changer, but the economics as well.

Quoting Keesje (Reply 78):
Quoting Zvezda (Reply 71):
I don't expect A330s to have high residual value once A350s are in service.

I and many others (lessors) think it will make great freighters. I think all the airlines ordering them now take residual value into account.

The residual value will be determined by how much of a game changer the 787 becomes.

Let me give you an example of game changing technology from our own vaults. In engineering, when large format drawings were produced, we used to send the drawing to a large printer, which would produce a print on translucent paper. You would then take the paper to a 'blueprint' machine and produce copies of it from this original.

In late 1999, we purchased a great printing machine from OCE. This expensive machine would take about 10 seconds to produce a print, as compared to 4 minutes and another 15 seconds from the previous way.

So, we had this great, expensive, almost new printer THAT WE NEVER USED AGAIN, and we couldn't give it away, because the OCE machine efficiency just killed it. And I calculated the costs, and between the two previous ways, the costs were very similar, but now you removed a significant amount of manpower required to procure engineering copies.

What has happened? In a very short time, the OCE machines took over the market, changing completely the way engineering prints were done. We no longer see any blueprints in our office.

And if you had told me when I purchased the OCE that this was going to happen, I wouldn't have believed you. After all, this was NOT new technology, this was a different application for existing technology.

This is what game changing is.
 
MD-90
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Wed Jan 03, 2007 9:50 am

Quoting GBan (Reply 34):
Might be interesting as well: LH expects 3.5 litres per passenger and 100 kilometres for the 747-8 in LH configuration (see press release) and expects 3.3 litres per passenger and 100 km for the A380 in LH configuration (http://a380.lufthansa.com/en/html/ueberblick/index.php). Economical advantage per passenger is 6% in favour of the A380.

That is interesting, but the pax aren't the only load aboard the aircraft. The 748 can carry substantially more revenue cargo than the A380 can. Does this offset the 6% per passenger fuel burn advantage? I think it might come out slightly in the 748's favor, as long as the airline could fill the hold with cargo.
 
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Stitch
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Wed Jan 03, 2007 9:58 am

Quoting NAV20 (Reply 77):
There is little doubt that unless it can raise extra capital, EADS will be short of cash next year. It has been reported that EADS and its 'shareholders' - i.e. the various governments - reached agreement on a government-guaranteed Euro4.0 B. funding package before Christmas...The amount to be raised - say $US5.0B. - sounds about the right sort of amount required to cover the forecast A380 production losses, compensation payments, initial design expenditure on the A350 etc. over the next couple of years?

I'm not familiar with Airbus' Accounts Payable and Accounts Receivable, but when factored in with monies received from A320 and A330 (and A340?) deliveries, I think it should be enough to tide them over until the A388 deliveries start to happen in earnest. And while I am aware that a number of those frames will be delivered at a loss, it's still going to be nine figures received per frame going into the coffers to help pay for expenses going out.
 
NAV20
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Wed Jan 03, 2007 10:22 am

Quoting Stitch (Reply 82):
with monies received from A320 and A330 (and A340?) deliveries, I think it should be enough to tide them over until the A388 deliveries start to happen in earnest.

The evidence is above, in 'blue and white,' Stitch, that they're aiming to use government guarantees to raise no less the Euro4.0B. I don't think they'd do that (with all the problems it will raise at the WTO) if they didn't have to.

We'll know more about EADS' current financial situation in February or early March, when EADS announces its figures for the last quarter of 2006 and its profit for 2006.
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
baron95
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Wed Jan 03, 2007 10:35 am

Quoting Stitch (Reply 74):
Now, Airbus may be wrong, and they're going to take a bath on these planes because the lease payments they are charging will end up not being profitable and the re-sale value

Unfortunately Airbus has a documented history of doing just that. Searth the WSJ archives for the story behind the Iberia A340 win over the 777. Among other things, Airbus got that deal by guaranteeing resale prices on the A340s. Those prices, as you can imagine, are dropping steadily with the rise in oil prices and will take a discontinuity drop when the 787-10/11 and A350-900/1000 enter service.

How much will that cost Airbus - I don't know, but Iberia certainly was not willing to order those planes without shifting the risk to Airbus. There must have been a big reason for that. And since Iberia went public with those details on the deal (Causing J.L. to sqwak publicly), you can bet that other customers for A330/340 will ask for similar guarantees.

Oh, and for the reccord, building the planes (paying all the suppliers + labor) upfront and then direct leasing it out to SQ is a MUCH, MUCH bigger drain on immediate cash reserves than paying an additional US$10M/frame in compensation.
Killer Fleet: E190, 737-900ER, 777-300ER
 
EI321
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Wed Jan 03, 2007 11:10 am

Quoting Zvezda (Reply 52):
I forgot to count the four VIP sales, so the correct count is: 747-8 SuperJumbo 78, WhaleJet 7.

Im not sure why you alter the general opinion of the nicknames of these two aircraft. There is only one place where I have seen the A380 refered to as the Whalejet, a/net. There is only one place where I have seen the 748 refered to as the Superjumbo, a.net. A quick google might reveal to opinion of the world outside this site! The 748 is known as a Jumbo, The A380 is known as a Superjumbo.

Quoting Zvezda (Reply 71):
Quoting Leelaw (Reply 70):
I'm not fathoming how potential losses could run into the billions from this particular transaction, especially if one is sanguine about the prospects of the A330 maintaining high residual values far into the next decade.

I don't expect A330s to have high residual value once A350s are in service.

That ignores the notion of Demand and Supply. How many A330s, A340s or 777s are sitting in the dessert?
 
billreid
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Wed Jan 03, 2007 11:25 am

Quoting Grantcv (Reply 28):
So in order to make these numbers, Airbus would have to sell 900 of the current A388/A388F variants. (Additional investments on new variants aren't factored into Airbus' numbers.) What other single variant has ever done this well? B722, B732, B733, B73G, B738, B752, and the A320. So in essence, at some point the A380 will have to start selling like B737s or A320s in order to make the numbers. Yeah, right!

Great response. I don't think 250 will be reached.
AA, UA and DL will not order the three largest fleets in the world.
CO, NW, US, AC will not order.
KL, SAS and so on.

Here is the problem....
If the largest carrier orders 30 we need to have 60 airlines to order 15.. Where are they?

Yes I forgot Ryanair and Southwest and AirTran and Jet Blue.

The reality is there aren't enough airlines who can write a business plan for this albatross, nor can they afford it.

The only crush the the A380 will do is for the EU taxpayer!
Some people don't get it. Business is about making MONEY!
 
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PM
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Wed Jan 03, 2007 11:28 am

Quoting EI321 (Reply 85):
How many A330s, A340s or 777s are sitting in the dessert?

Only a trifle...  Wink
 
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Stitch
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Wed Jan 03, 2007 11:42 am

Quoting NAV20 (Reply 83):
The evidence is above, in 'blue and white,' Stitch, that they're aiming to use government guarantees to raise no less the Euro4.0B. I don't think they'd do that (with all the problems it will raise at the WTO) if they didn't have to.

I should note that my comment included the $4 billion EADS is trying to get the EU governments to pony up. I agree that EADS can't fund the A350X program in the amounts needed/desired from planned Airbus revenues through 2010.

Quoting Baron95 (Reply 84):
Oh, and for the record, building the planes (paying all the suppliers + labor) upfront and then direct leasing it out to SQ is a MUCH, MUCH bigger drain on immediate cash reserves than paying an additional US$10M/frame in compensation.

Which is why I believe Airbus didn't "give away" the A330s to SQ, QF and LH to get them to keep their existing A388 order and/or add-on to it. It would cost them far more in the near-term to do that then just write a check for $100 million or so to each airline and watch them go spend it at Boeing.

Quoting EI321 (Reply 85):
I'm not sure why you, (Zvezda), alter the general opinion of the nicknames of these two aircraft. There is only one place where I have seen the A380 referred to as the Whalejet, a/net.

The Seattle Times "Biz Quiz" for 2006 noted that "Whale" (though not, admittedly, "WhaleJet") is evidently a common moniker used to describe the A388 within the public and industry.
 
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PM
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Wed Jan 03, 2007 11:48 am

Quoting Stitch (Reply 88):
The Seattle Times "Biz Quiz" for 2006 noted that "Whale" (though not, admittedly, "WhaleJet") is evidently a common moniker used to describe the A388 within the public and industry.

I've never seen it anywhere but here. Personally, I dislike it and I hope it doesn't catch on.
 
MD-90
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Wed Jan 03, 2007 1:20 pm

Oh I dunno, I think it's been pretty set that the A380 is the "superjumbo." Personally, I think of it as the Whalejet, because "superjumbo" sounds to me like it was invented by Euros with penis envy of the 747.
 
ikramerica
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Wed Jan 03, 2007 1:23 pm

Quoting PM (Reply 90):
I've never seen it anywhere but here. Personally, I dislike it and I hope it doesn't catch on.

Is it Zvezda's fault that some people can't do a web search? I've seen the term in the LA Times and other papers myself. But here are some websites, devoted to the A380 in positive ways, that use the term!!!

http://www.whalejet.net/
http://www.a380portal.com/

And on the first page of a Google search, the WhaleJet term is used all over the web, not just A.net. Blogs, news stories, message boards, parody websites.

Just because you dislike something doesn't mean it doesn't exist...

I dislike it too, and would like another name. But "SuperJumbo" is not a good name for it either, as it implies that it's just trying to be bigger than the 747. And now that Boeing has built a SuperJumbo version of their Jumbo, it really doesn't fit anymore.

Give the A380 a fresh name.

How about the UltraJet? SuperJet? MegaJet?

A380 MegaJet. I like it! Maybe Zvezda will too and start using it, since he's obviously the same person using it on all these other websites...
Of all the things to worry about... the Wookie has no pants.
 
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PM
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Wed Jan 03, 2007 1:31 pm

Quoting Ikramerica (Reply 93):
Is it Zvezda's fault that some people can't do a web search? I've seen the term in the LA Times and other papers myself. But here are some websites, devoted to the A380 in positive ways, that use the term!!!

http://www.whalejet.net/
http://www.a380portal.com/

And on the first page of a Google search, the WhaleJet term is used all over the web, not just A.net. Blogs, news stories, message boards, parody websites.

Just because you dislike something doesn't mean it doesn't exist...

Yet again you demonstrate that you are about the rudest poster on A.Net. Are you incapable of posting without getting nasty? Sheesh.

Quoting Ikramerica (Reply 93):
I've seen the term in the LA Times

...which is not terribly widely read in western Japan. The English-language Japan Times is more commonly found here and I haven't seen any reference to Whalejet.

Quoting Ikramerica (Reply 93):
Give the A380 a fresh name.

Why? What's wrong with A380?
 
NAV20
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Wed Jan 03, 2007 1:34 pm

Quoting Stitch (Reply 88):
should note that my comment included the $4 billion EADS is trying to get the EU governments to pony up. I agree that EADS can't fund the A350X program in the amounts needed/desired from planned Airbus revenues through 2010.

Fair enough, Stitch, didn't realise that you were taking the government-backed E4.0B. into account. I see the availability of that as still being 'in the balance' at this stage. The WTO is not due even to consider final submissions on the original 'launch aid' controversy until September 2007 - we can expect the US Government to add the question of government-backed bonds to their original submission - or alternatively raise a whole new complaint.

Interesting to speculate on what might happen if EADS don't actually GET the gocernment-guaranteed E4.0B. in 2007? I doubt that, on their present prospects, they'd be able to borrow that sort of money from the private sector?

I certainly won't be lending them any money, anyway. Oh, hang on, on second thoughts I've got a hundred bucks they're welcome to borrow if they like  Smile :-

http://www.banknotes.com/CSA45.JPG
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
 
zvezda
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Wed Jan 03, 2007 1:38 pm

Quoting NAV20 (Reply 95):
Interesting to speculate on what might happen if EADS don't actually GET the gocernment-guaranteed E4.0B. in 2007? I doubt that, on their present prospects, they'd be able to borrow that sort of money from the private sector?

Of course EADS can borrow money in a free market. They can sell bonds. They wouldn't even be junk bonds. There is no reason why they shouldn't have to pay market interest rates for money.
 
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Stitch
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Wed Jan 03, 2007 1:39 pm

Quoting NAV20 (Reply 95):
Interesting to speculate on what might happen if EADS don't actually GET the government-guaranteed E4.0B. in 2007? I doubt that, on their present prospects, they'd be able to borrow that sort of money from the private sector?

I think they could, but not at the rate the EU central banks will extend them.  Smile

Also, EADS could get it in stages - a billion or two a year - to match needs and incoming revenues.
 
ikramerica
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Wed Jan 03, 2007 1:47 pm

Quoting PM (Reply 94):
Yet again you demonstrate that you are about the rudest poster on A.Net. Are you incapable of posting without getting nasty? Sheesh.

Yes, I do it all the time.

People are constantly attacking Zvezda for using a term he likes and claiming he's wrong for using it. Even after repeatedly being shown that this is not the case, that it is used other places and is not seen as derogatory in many of those places, people still try to make this claim, to censor him and others.

When someone points this out, they are being "nasty." My point was valid. People on a.net, you included, have decided you don't like the term and therefor claim it doesn't exist anywhere but a.net. That's just reality, not nasty.

If you take that as nasty, fine. It wasn't intended that way. It's a disagreement, and a desire not to be censored. Even the moderators tried to expunge WhaleJet until they discovered it was used beyond a.net and not always derogatory.

I don't use it, since I don't like it. I say A380.

Though I'm leaning towards MegaJet. Sounds really cool.
Of all the things to worry about... the Wookie has no pants.
 
baron95
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Wed Jan 03, 2007 1:50 pm

Quoting Stitch (Reply 88):
Which is why I believe Airbus didn't "give away" the A330s to SQ, QF and LH to get them to keep their existing A388 order and/or add-on to it. It would cost them far more in the near-term to do that then just write a check for $100 million or so to each airline and watch them go spend it at Boeing.

I agree with you that they didn't give it away. I do think that they provided attractive leasing term (primarily in how short the lease terms are or very low early termination fees if taking an A3xx from Airbus to replace it). I don't think Airbus is looking at the A330 leasing deals as an independent business transaction.

I know little about Airbus sales practices, but I know that Airbus has an overall long term account plan for each customer. They focus on the aggreagate amount of business they can get from that customer over a period of time. The A330 leasing deal is just another piece of the puzzle used to achieve the overall account plan for SQ. They will look at the overall profitability of the total account volume with SQ and fit the pieces needed to be competitive. It matters little if they discount an A330 by 50% and an A380 by 10% or an A330 by 30% and an A380 by 15%. If they achieve their overall plan $$$ volume and profitability targets, it matters little how it is done.
Killer Fleet: E190, 737-900ER, 777-300ER
 
WingedMigrator
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A380 Will Crush Rivals: Predicts Expert II

Wed Jan 03, 2007 1:56 pm

Quoting Astuteman (Reply 42):

Thanks for the kind words A'man.

Quoting Ikramerica (Reply 32):
Nope, a revision will not be a small investment. It'll likely cost $1 billion or more

A couple of billion is a small additional investment, as I stated, relative to the original development cost.

Quoting Ikramerica (Reply 32):
If it takes 900 frames to earn 19% on $16 billion, it means they'll have to sell at least 50 more, or 950, to make 19% on one cheap revision.

To make 19% on one cheap revision, they need to sell 50 more than they would otherwise have sold. They do not need to sell 50 more than 900. Any improvements or derivative versions will be judged on their incremental return, and may be offered well before the baseline version is in the black. It is a common fallacy that the A388 needs to make a strong ROI, or let alone break even, before derived variants may be funded.

Quoting AndesSMF (Reply 80):
This is what game changing is.

You're saying the old way of making blueprints took 4 minutes and 15 seconds, and the new way took 10 seconds. What you failed to describe is the analogy to the 787... does it turn a 4 hour 15 minute flight into a 10 minute flight? That would be game changing indeed.  biggrin 

Quoting Ikramerica (Reply 89):
The A380 can get it's own name. SOME people have called it SuperJumbo, but that is not some kind of industry standard term, nor do I think it will ever be.

Now who's not doing their internet searches? The term SuperJumbo is associated to the A380 by several orders of magnitude over the 747. But anyone should feel free to call it whatever they like, so don't let that stop you.

Quoting Ikramerica (Reply 93):
How about the UltraJet? SuperJet? MegaJet?

For what it's worth, AW&ST has started referring to it as the Megatransport.
 
Joni
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Wed Jan 03, 2007 6:51 pm

Quoting NAV20 (Reply 76):

So it is quite likely that EADS will not in fact receive the government-backed money in 2007. Which COULD leave them quite short of cash late in the year.

I don't think that any US complaints in WTO would prevent the guarantees from going forward, since it hasn't happened before. They'd go forward and in case the WTO ruled against them (and the EU chose to adopt the WTO ruling) then some compensation, amounting to the difference between market rate and the rate EADS pays with the guarantees, could be imposed. It's likely no money would move since the WTO is also likely to find against Boeing's tax breaks at the same juncture.

Quoting AndesSMF (Reply 79):
In late 1999, we purchased a great printing machine from OCE. This expensive machine would take about 10 seconds to produce a print, as compared to 4 minutes and another 15 seconds from the previous way.

Great to hear you have a new printer in your office.

Quoting MD-90 (Reply 80):
The 748 can carry substantially more revenue cargo than the A380 can. Does this offset the 6% per passenger fuel burn advantage?

I think the cargo in the 748 requires some fuel, too. If this wasn't the case, the 748 would be a perpetual-motion machine.

Quoting MD-90 (Reply 89):
Oh I dunno, I think it's been pretty set that the A380 is the "superjumbo." Personally, I think of it as the Whalejet, because "superjumbo" sounds to me like it was invented by Euros with penis envy of the 747.

Whales are mammals, and have enormous penises:

http://en.wikipedia.org/wiki/Whale_penis#Non-human_penises

The largest penis belongs to the blue whale estimated at over 2 m (more than 6½ feet)

Quoting Ikramerica (Reply 90):

A380 MegaJet. I like it! Maybe Zvezda will too and start using it, since he's obviously the same person using it on all these other websites...

MegaJet can be understood as something positive, therefore Z will never use it to describe the A380.
 
NAV20
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Wed Jan 03, 2007 7:29 pm

Quoting Joni (Reply 98):
in case the WTO ruled against them (and the EU chose to adopt the WTO ruling) then some compensation, amounting to the difference between market rate and the rate EADS pays with the guarantees, could be imposed.

No - the WTO's normal approach is to authorise the membership to impose tariffs etc. to block the exports of the offending party. Which, in this case, would be the whole of the EU. And the sanctions would not necessarily be limited to aircraft exports. I very much doubt that the EU would risk anything like that happening, just for Airbus.

Quoting Joni (Reply 98):
Whales are mammals, and have enormous penises:

Applied to a flying mammal, wouldn't that just lead to increased drag? To say nothing of landing difficulties?  Smile
"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci

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